Exhibit 10(8)
                                                                   -------------

                              EMPLOYMENT AGREEMENT

     This Agreement,  made and dated as of January 2, 2002, by and between Union
Federal Savings and Loan  Association,  a federal  savings and loan  association
("Employer"),  and J. Lee  Walden,  a resident  of  Montgomery  County,  Indiana
("Employee").


                               W I T N E S S E T H

     WHEREAS,  Employee is employed by Employer as its Chief  Financial  Officer
and has made valuable  contributions to the profitability and financial strength
of Employer's predecessor;

     WHEREAS,  Employer  desires  to  encourage  Employee  to  continue  to make
valuable  contributions  to Employer's  business  operations  and not to seek or
accept employment elsewhere;

     WHEREAS,  Employee  desires to be assured of a secure minimum  compensation
from Employer for his services over a defined term;

     WHEREAS,  Employer desires to assure the continued  services of Employee on
behalf of Employer on an objective and impartial  basis and without  distraction
or  conflict  of  interest  in the event of an  attempt  by any person to obtain
control of Employer or Union  Community  Bancorp (the  "Holding  Company"),  the
Indiana  corporation which owns all of the issued and outstanding  capital stock
of Employer;

     WHEREAS,  Employer  recognizes that when faced with a proposal for a change
of control of Employer or the Holding Company,  Employee will have a significant
role in helping the Boards of  Directors  assess the options  and  advising  the
Boards of  Directors on what is in the best  interests of Employer,  the Holding
Company,  and its  shareholders,  and it is necessary for Employee to be able to
provide this advice and counsel without being influenced by the uncertainties of
his own situation;

     WHEREAS,  Employer  desires  to provide  fair and  reasonable  benefits  to
Employee on the terms and subject to the conditions set forth in this Agreement;

     WHEREAS,   Employer  desires  reasonable  protection  of  its  confidential
business  and  customer  information  which it has  developed  over the years at
substantial  expense and assurance  that Employee will not compete with Employer
for a  reasonable  period  of time  after  termination  of his  employment  with
Employer, except as otherwise provided herein.

     NOW,  THEREFORE,  in consideration of these premises,  the mutual covenants
and undertakings  herein  contained and the continued  employment of Employee by
Employer as its Chief Financial Officer,  Employer and Employee,  each intending
to be legally bound, covenant and agree as follows:

     1.  Upon  the  terms  and  subject  to the  conditions  set  forth  in this
Agreement,  Employer employs Employee as Employer's Chief Financial Officer, and
Employee accepts such employment.

     2. Employee agrees to serve as Employer's  Chief  Financial  Officer and to
perform  such  duties in that  office as may  reasonably  be  assigned to him by
Employer's  Board of  Directors;  provided,  however,  that such duties shall be
performed   in  or  from  the   offices  of   Employer   currently   located  at
Crawfordsville,  Indiana.  Employee  shall not be required to be absent from the
location of the  principal  executive  offices of  Employer on travel  status or
otherwise  more than 45 days in any calendar year.  Employer shall not,  without
the written  consent of  Employee,  relocate or transfer  Employee to a location
more than 30 miles from Employer's  primary office.  While employed by Employer,
Employee  shall  devote  substantially  all his  business  time and  efforts  to
Employer's  business  during regular  business hours and shall not engage in any
other related business.

     3.  The  term of  this  Agreement  shall  begin  on the  date  hereof  (the
"Effective  Date") and shall end on the date which is three years following such
date, subject to earlier termination as provided herein.  Beginning on the first
anniversary of the Effective Date, and on each anniversary thereafter,  the term
of this Agreement  shall be extended for a period of one year in addition to the
then-remaining  term  provided  that (1)  Employer  has not given  notice to the
Employee in writing at least 90 days prior to such  anniversary that the term of
this Agreement shall not be extended further, and (2) prior to such anniversary,
the Board of Directors of Employer explicitly reviews and approves the extension
(such term, including any extension thereof,  shall herein be referred to as the
"Term").

     4. Employee shall receive an annual salary of $90,000 ("Base Compensation")
payable at regular  intervals  in  accordance  with  Employer's  normal  payroll
practices  now or  hereafter  in effect.  Employer may consider and declare from
time to time  increases or decreases in the salary it pays  Employee and thereby
increases  or  decreases  in his Base  Compensation.  After a Change in Control,
Employer shall consider and declare  salary  increases  based upon the following
standards:


     Inflation;

     Adjustments to the salaries of other senior management personnel; and

     Past performance of Employee and the  contribution  which Employee makes to
     the business and profits of Employer during the Term.


Any and all increases or decreases in Employee's salary pursuant to this section
shall cause the level of Base  Compensation  to be increased or decreased by the
amount of each such  increase or decrease  for purposes of this  Agreement.  The
increased or decreased  level of Base  Compensation  as provided in this section
shall  become the level of Base  Compensation  for the  remainder of the Term of
this  Agreement  until  there  is  a  further   increase  or  decrease  in  Base
Compensation as provided herein.

     5. So long as Employee is employed by Employer  pursuant to this Agreement,
he shall be eligible to participate in all present and future employee  benefit,
retirement, and compensation plans generally available to employees of Employer,
consistent with his performance, position, tenure and other relevant factors.

     6. So long as Employee is employed by Employer  pursuant to this Agreement,
Employee shall receive  reimbursement from Employer for all reasonable  business
expenses  incurred in the course of his employment by Employer,  upon submission
to Employer of written vouchers and statements for reimbursement. Employee shall
attend,  upon  the  prior  approval  of  Employer's  Board of  Directors,  those
professional meetings,  conventions, and/or similar functions that the President
of Employer or Employer's  Board of Directors  deems  appropriate and useful for
purposes  of keeping  abreast of current  developments  in the  industry  and/or
promoting the interests of Employer. So long as Employee is employed by Employer
pursuant to the terms of this  Agreement,  Employee  shall be  eligible  for the
number of vacation days permitted under Employer's vacation policies.

     7.  Subject  to the  respective  continuing  obligations  of  the  parties,
including but not limited to those set forth in subsections 9(A), 9(B), 9(C) and
9(D) hereof,  Employee's  employment by Employer may be terminated  prior to the
expiration of the Term of this Agreement as follows:

     (A)  Employer,  by action of its Board of Directors and upon written notice
          to  Employee,   may  terminate  Employee's  employment  with  Employer
          immediately for cause. For purposes of this subsection  7(A),  "cause"
          shall be defined as (i) personal dishonesty, (ii) incompetence,  (iii)
          willful  misconduct,  (iv) breach of fiduciary duty involving personal
          profit, (v) intentional failure to perform stated duties, (vi) willful
          violation  of  any  law,  rule,  or  regulation  (other  than  traffic
          violations or similar  offenses) or final  cease-and-desist  order, or
          (vii) any material breach of any provision of this Agreement.

     (B)  Employer, by action of its Board of Directors may terminate Employee's
          employment with Employer without cause at any time; provided, however,
          that the "date of  termination"  for purposes of determining  benefits
          payable to Employee  under  subsection  8(B) hereof  shall be the date
          which  is 60 days  after  Employee  receives  written  notice  of such
          termination.

     (C)  Following  a  Change  of  Control,  Employee,  by  written  notice  to
          Employer,  may terminate his employment with Employer  immediately for
          cause. For purposes of this subsection 7(C),  "cause" shall be defined
          as (i) any  action by  Employer's  Board of  Directors  to remove  the
          Employee as Chief  Financial  Officer of  Employer,  except  where the
          Employer's  Board of Directors  properly acts to remove  Employee from
          such office for "cause" as defined in subsection 7(A) hereof, (ii) any
          action by Employer's Board of Directors to materially limit, increase,
          or  modify  Employee's  duties  and/or  authority  as Chief  Financial
          Officer of  Employer,  or (iii) any  material  breach by Employer of a
          term, condition or covenant of this Agreement.

     (D)  Employee,  upon  sixty  (60)  days  written  notice to  Employer,  may
          terminate his employment with Employer without cause.

     (E)  Employee's  employment  with Employer shall  terminate in the event of
          Employee's  death or  disability.  For purposes  hereof,  "disability"
          shall be defined as Employee's inability by reason of illness or other
          physical or mental  incapacity  to perform the duties  required by his
          employment  for any  consecutive  One Hundred Eighty (180) day period,
          provided  that  notice  of any  termination  by  Employer  because  of
          Employee's "disability" shall have been given to Employee prior to the
          full resumption by him of the performance of such duties.

     8. In the event of  termination  of  Employee's  employment  with  Employer
pursuant to section 7 hereof, compensation shall continue to be paid by Employer
to Employee as follows:

     (A)  In the  event of  termination  pursuant  to  subsection  7(A) or 7(D),
          compensation  provided for herein (including Base Compensation)  shall
          continue to be paid, and Employee shall continue to participate in the
          employee  benefit,   retirement,  and  compensation  plans  and  other
          perquisites  as provided in sections 5 and 6 hereof,  through the date
          of termination  specified in the notice of  termination.  Any benefits
          payable  under  insurance,  health,  retirement  and bonus  plans as a
          result of  Employee's  participation  in such plans  through such date
          shall be paid  when due under  those  plans.  The date of  termination
          specified in any notice of  termination  pursuant to  subsection  7(A)
          shall be no later  than the last  business  day of the  month in which
          such notice is provided to Employee.

     (B)  In the  event of  termination  pursuant  to  subsection  7(B) or 7(C),
          compensation  provided for herein (including Base Compensation)  shall
          continue to be paid, and Employee shall continue to participate in the
          employee  benefit,   retirement,  and  compensation  plans  and  other
          perquisites  as provided in sections 5 and 6 hereof,  through the date
          of termination  specified in the notice of  termination.  Any benefits
          payable  under  insurance,  health,  retirement  and bonus  plans as a
          result of  Employee's  participation  in such plans  through such date
          shall be paid when due under those plans. In addition,  Employee shall
          be entitled to continue to receive from Employer his Base Compensation
          at the  rates in  effect  at the  time of  termination  (1) for  three
          additional  l2-month  periods if the  termination  follows a Change of
          Control  or  (2)  for  the  remaining  Term  of the  Agreement  if the
          termination does not follow a Change of Control.  In addition,  during
          such periods,  Employer will maintain in full force and effect for the
          continued  benefit of Employee each employee  welfare benefit plan and
          each employee  pension  benefit plan (as such terms are defined in the
          Employee  Retirement Income Security Act of 1974, as amended) in which
          Employee was entitled to participate  immediately prior to the date of
          his  termination,   unless  an  essentially  equivalent  and  no  less
          favorable benefit is provided by a subsequent employer of Employee. If
          the terms of any employee  welfare  benefit  plan or employee  pension
          benefit  plan of Employer  do not permit  continued  participation  by
          Employee,  Employer  will  arrange to  provide  to  Employee a benefit
          substantially  similar to, and no less favorable  than, the benefit he
          was  entitled  to receive  under such plan at the end of the period of
          coverage.  For purposes of this Agreement, a "Change of Control" shall
          mean an acquisition of "control" of the Holding Company or of Employer
          within the  meaning of 12  C.F.R.ss.574.4(a)  (other  than a change of
          control  resulting from a trustee or other fiduciary holding shares of
          Common Stock under an employee  benefit plan of the Holding Company or
          any of its subsidiaries).  Notwithstanding anything to the contrary in
          the foregoing,  any benefits  payable under this subsection 8(B) shall
          be subject  to the  limitations  on  severance  benefits  set forth in
          Regulatory  Bulletin  27a of the Office of Thrift  Supervision,  as in
          effect on the Effective Date.

     (C)  In the event of termination pursuant to subsection 7(E),  compensation
          provided for herein (including Base Compensation) shall continue to be
          paid,  and  Employee  shall  continue to  participate  in the employee
          benefit,  retirement,  and compensation plans and other perquisites as
          provided  in sections 5 and 6 hereof,  (i) in the event of  Employee's
          death,  through the date of death,  or (ii) in the event of Employee's
          disability,  through  the  date of  proper  notice  of  disability  as
          required by subsection  7(E).  Any benefits  payable under  insurance,
          health,   retirement  and  bonus  plans  as  a  result  of  Employer's
          participation  in such plans  through such date shall be paid when due
          under those plans.

     9. In order to  induce  Employer  to enter  into this  Agreement,  Employee
hereby agrees as follows:

     (A)  While Employee is employed by Employer and for a period of three years
          after  termination of such employment for reasons other than those set
          forth in subsections 7(B) or (C) of this Agreement, Employee shall not
          divulge or  furnish  any trade  secrets  (as  defined in IND.  CODEss.
          24-2-3-2) of Employer or any confidential  information acquired by him
          while employed by Employer concerning the policies,  plans, procedures
          or customers  of Employer to any person,  firm or  corporation,  other
          than  Employer  or upon its  written  request,  or use any such  trade
          secret  or  confidential   information   directly  or  indirectly  for
          Employee's  own  benefit  or for the  benefit of any  person,  firm or
          corporation  other  than  Employer,   since  such  trade  secrets  and
          confidential  information  are  confidential  and  shall at all  times
          remain the property of Employer.

     (B)  For a period of three years after termination of Employee's employment
          by Employer for reasons other than those set forth in subsections 7(B)
          or (C) of this  Agreement,  Employee  shall not directly or indirectly
          provide banking or bank-related  services to or solicit the banking or
          bank-related  business of any customer of Employer at the time of such
          provision of services or  solicitation  which  Employee  served either
          alone or with others  while  employed  by Employer in any city,  town,
          borough,  township, village or other place in which Employee performed
          services  for Employer  while  employed by it, or assist any actual or
          potential  competitor of Employer to provide  banking or  bank-related
          services to or solicit  any such  customer's  banking or  bank-related
          business in any such place.

     (C)  While  Employee is  employed by Employer  and for a period of one year
          after  termination  of  Employee's  employment by Employer for reasons
          other  than  those  set  forth  in  subsections  7(B)  or (C) of  this
          Agreement,  Employee shall not, directly or indirectly,  as principal,
          agent,  or  trustee,   or  through  the  agency  of  any  corporation,
          partnership, trade association, agent or agency, engage in any banking
          or bank-related  business which competes with the business of Employer
          as conducted during Employee's  employment by Employer within a radius
          of twenty-five (25) miles of Employer's main office.

     (D)  If Employee's  employment by Employer is terminated  for reasons other
          than  those set forth in  subsections  7(B) or (C) of this  Agreement,
          Employee  will  turn  over  immediately  thereafter  to  Employer  all
          business correspondence,  letters, papers, reports,  customers' lists,
          financial statements, credit reports or other confidential information
          or  documents  of  Employer or its  affiliates  in the  possession  or
          control of Employee, all of which writings are and will continue to be
          the sole and exclusive property of Employer or its affiliates.

If  Employee's  employment  by  Employer is  terminated  during the Term of this
Agreement for reasons set forth in  subsections  7(B) or (C) of this  Agreement,
Employee  shall have no  obligations  to Employer with respect to trade secrets,
confidential information or noncompetition under this section 9.

     10. Any termination of Employee's  employment with Employer as contemplated
by section 7 hereof,  except in the circumstances of Employee's death,  shall be
communicated by written "Notice of Termination" by the terminating  party to the
other party hereto.  Any "Notice of Termination"  pursuant to subsections  7(A),
7(C) or 7(E) shall  indicate the specific  provisions of this  Agreement  relied
upon and shall  set  forth in  reasonable  detail  the  facts and  circumstances
claimed to provide a basis for such termination.

     11.  If  Employee  is  suspended   and/or   temporarily   prohibited   from
participating  in the conduct of  Employer's  affairs by a notice  served  under
section  8(e)(3) or (g)(1) of the Federal Deposit  Insurance Act (12 U.S.C.  ss.
1818(e)(3) or (g)(1)),  Employer's  obligations  under this  Agreement  shall be
suspended as of the date of service,  unless stayed by appropriate  proceedings.
If the charges in the notice are dismissed,  Employer shall (i) pay Employee all
or part of the compensation  withheld while its obligations under this Agreement
were suspended and (ii)  reinstate (in whole or in part) any of its  obligations
which were suspended.

     12. If Employee is removed and/or permanently prohibited from participating
in the conduct of Employer's affairs by an order issued under section 8(e)(4) or
(g)(1) of the  Federal  Deposit  Insurance  Act (12  U.S.C.  ss.  1818(e)(4)  or
(g)(1)),  all obligations of Employer under this Agreement shall terminate as of
the  effective  date of the  order,  but  vested  rights of the  parties  to the
Agreement shall not be affected.

     13. If Employer is in default (as defined in section 3(x)(1) of the Federal
Deposit  Insurance Act), all obligations under this Agreement shall terminate as
of the date of default, but this provision shall not affect any vested rights of
Employer or Employee.

     14. All obligations  under this Agreement shall be terminated except to the
extent  determined  that the  continuation of the Agreement is necessary for the
continued  operation  of  Employer:  (i) by the Director of the Office of Thrift
Supervision  or his or her designee  (the  "Director"),  at the time the Federal
Deposit Insurance  Corporation enters into an agreement to provide assistance to
or on behalf of Employer  under the authority  contained in Section 13(c) of the
Federal Deposit  Insurance Act; or (ii) by the Director at the time the Director
approves a  supervisory  merger to resolve  problems  related  to  operation  of
Employer or when  Employer is  determined by the Director to be in an unsafe and
unsound condition.  Any rights of the parties that have already vested, however,
shall not be affected by such action.

     15.  Anything in this  Agreement  to the contrary  notwithstanding,  in the
event that the  Employer's  independent  public  accountants  determine that any
payment by the Employer to or for the benefit of the  Employee,  whether paid or
payable pursuant to the terms of this Agreement,  would be non-deductible by the
Employer for federal income tax purposes because of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), then the amount payable to or for
the benefit of the Employee pursuant to this Agreement shall be reduced (but not
below zero) to the Reduced Amount. For purposes of this section 15, the "Reduced
Amount" shall be the amount which  maximizes the amount payable  without causing
the payment to be  non-deductible by the Employer because of Section 280G of the
Code. Any payments made to Employee pursuant to this Agreement or otherwise, are
subject to and conditional upon their  compliance with 12 U.S.C.  ss.1828(k) and
any  regulations  promulgated  thereunder,  to the  extent  applicable  to  such
parties.

     16. Should  Employee die after  termination of his employment with Employer
while any amounts are payable to him hereunder,  this  Agreement  shall inure to
the  benefit of and be  enforceable  by  Employee's  executors,  administrators,
heirs,  distributees,  devisees and legatees and all amounts  payable  hereunder
shall be paid in  accordance  with the  terms of this  Agreement  to  Employee's
devisee,  legatee or other  designee  or, if there is no such  designee,  to his
estate.

     17. For purposes of this  Agreement,  notices and all other  communications
provided  for herein  shall be in writing and shall be deemed to have been given
when delivered or mailed by United States  registered or certified mail,  return
receipt requested, postage prepaid, addressed as follows:


         If to Employee:   J. Lee Walden

         If to Employer:   Union Federal Savings and Loan Association
                           221 E. Main Street
                           P.O. Box 151
                           Crawfordsville, Indiana   47933

or to such address as either party hereto may have  furnished to the other party
in writing in  accordance  herewith,  except  that  notices of change of address
shall be effective only upon receipt.

     18. The validity,  interpretation,  and performance of this Agreement shall
be governed by the laws of the State of Indiana, except as otherwise required by
mandatory operation of federal law.

     19. Employer shall require any successor  (whether  direct or indirect,  by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Employer, by agreement in form and substance  satisfactory
to Employee to expressly  assume and agree to perform this Agreement in the same
manner and same extent that Employer  would be required to perform it if no such
succession had taken place.  Failure of Employer to obtain such agreement  prior
to the  effectiveness  of any such  succession  shall be a material  intentional
breach of this Agreement and shall entitle  Employee to terminate his employment
with Employer  pursuant to subsection  7(C) hereof.  As used in this  Agreement,
"Employer" shall mean Employer as hereinbefore  defined and any successor to its
business or assets as aforesaid.

     20. No provision of this  Agreement  may be modified,  waived or discharged
unless such waiver,  modification or discharge is agreed to in writing signed by
Employee  and  Employer.  No waiver by  either  party  hereto at any time of any
breach by the other  party  hereto of, or  compliance  with,  any  condition  or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver  of  dissimilar  provisions  or  conditions  at the  same or any  prior
subsequent time. No agreements or representation,  oral or otherwise, express or
implied,  with  respect to the  subject  matter  hereof have been made by either
party which are not set forth expressly in this Agreement.

     21. The invalidity or  unenforceability of any provisions of this Agreement
shall not affect the validity or  enforceability of any other provisions of this
Agreement which shall remain in full force and effect.

     22. This  Agreement  may be executed in one or more  counterparts,  each of
which shall be deemed an original but all of which together shall constitute one
and the same agreement.

     23. This  Agreement is personal in nature and neither  party hereto  shall,
without consent of the other, assign or transfer this Agreement or any rights or
obligations  hereunder  except as  provided  in section 16 and section 19 above.
Without  limiting  the  foregoing,  Employee's  right  to  receive  compensation
hereunder shall not be assignable or transferable,  whether by pledge,  creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or  distribution  as set forth in section 16 hereof,  and in the
event of any  attempted  assignment  or  transfer  contrary  to this  paragraph,
Employer  shall have no liability to pay any amounts so attempted to be assigned
or transferred.

     IN WITNESS  WHEREOF,  the parties have caused the  Agreement to be executed
and delivered as of the day and year first above set forth.

                               UNION FEDERAL SAVINGS AND LOAN
                               ASSOCIATION


                               By: /s/ Joseph E. Timmons
                                   -------------------------------------------
                                   Joseph E. Timmons
                                   President

                                   "Employer"


                                   /s/ J. Lee Walden
                                   --------------------------------------------
                                   J. Lee Walden

                                   "Employee"

     The  undersigned,  Union Community  Bancorp,  sole shareholder of Employer,
agrees that if it shall be determined for any reason that any obligations on the
part of Employer to continue to make any  payments  due under this  Agreement to
Employee is unenforceable  for any reason,  Union Community  Bancorp,  agrees to
honor the terms of this  Agreement  and  continue to make any such  payments due
hereunder to Employee pursuant to the terms of this Agreement.

                               UNION COMMUNITY BANCORP


                               By: /s/ Joseph E. Timmons
                                   --------------------------------------------
                                   Joseph E. Timmons, President