PEOPLES BANK CORPORATION OF INDIANAPOLIS
                        1996 DIRECTORS STOCK OPTION PLAN


          1.  Purpose.   The  purpose  of  the  Peoples  Bank   Corporation   of
Indianapolis  1996  Directors  Stock  Option Plan (the  "Plan") is to provide to
outside   directors   of  Peoples  Bank   Corporation   of   Indianapolis   (the
"Corporation")  the opportunity to acquire  Nonvoting Common Stock,  without par
value, of the Corporation  ("Nonvoting Common Shares"),  thereby better enabling
the Corporation to attract and retain capable directors.

          2.  Interpretation  of the  Plan.  The  Plan  shall be  construed  and
interpreted  by the members of the Board of  Directors of the  Corporation  (the
"Board") who are also employees of the  Corporation or employees of a subsidiary
of the Corporation.  (Such members shall be referred to as the "Committee"). The
decision of a majority  of the members of the  Committee  shall  constitute  the
decision of the Committee, and the Committee may act (a) at a meeting at which a
majority  of the  members  of the  Committee  is  present,  (b) by  simultaneous
telephonic  communication,  or (c) by a written consent signed by all members of
the Committee.  The Committee shall also have authority to prescribe,  amend and
rescind  rules  and  regulations  relating  to the  Plan,  and to make all other
determinations  necessary or advisable in the interpretation and construction of
the Plan.

         3. Option  Grant  Formula.  Directors  of the  Corporation  who are not
employed by the Corporation ("Outside Directors") shall be


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eligible for grants of  non-qualified  stock options  under this Plan.  Upon the
date on which  this Plan is  adopted,  the  Corporation  shall  provide  to each
Outside  Director still serving as a director of the  Corporation on such date a
non-qualified  option to purchase four hundred (400) shares of Nonvoting  Common
Shares.  On April 1, 1997 and on each April 1  thereafter  while there are still
shares  reserved  under the Plan for which  options  have not been  granted (the
initial date on which  non-qualified  stock  options are granted under this Plan
and each April 1 thereafter  shall each be referred to as a "Grant  Date"),  the
Corporation  shall grant to each Outside  Director  serving as a director of the
Corporation on each Grant Date on and after April 1, 1997 a non-qualified option
to purchase a number of shares of Nonvoting Common Shares with an aggregate fair
market  value  (as  determined  below at the  Grant  Date)  equal to the  amount
determined by multiplying:

                  (a)      15%, by

                  (b)      the sum of:

                           (i)      the Outside Director's annual retainer in
                                    effect on the Grant Date; and

                           (ii)     fourteen (14) times the Board's regular
                                    meeting fee in effect on the Grant Date,
rounded to the nearest whole share. The option price per share shall be equal to
the fair market  value of a share of the  Nonvoting  Common  Shares on the Grant
Date. For purposes of this Plan,  fair market value of a Nonvoting  Common Share
shall be  equal  to the mean  between  the  high  and low  sales  prices  of the
Nonvoting Common

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Shares as  reported in The Wall Street  Journal for the  applicable  Grant Date;
provided,  however, that notwithstanding  anything contained in this Plan to the
contrary,  if a Grant Date falls on a day on which  Nonvoting  Common Shares are
not traded,  such Grant Date shall instead be the first day following such Grant
Date on which shares of Nonvoting Common Shares are traded;  provided,  further,
that if on a Grant  Date the number of  remaining  shares  available  for option
grants is not large  enough to grant  each  Outside  Director  with an option to
acquire a number of Nonvoting Common Shares  determined under the formula above,
the number of shares covered by the final option for each Outside Director shall
be reduced  proportionately  to the  nearest  whole  share so that the number of
shares  granted  under the Plan does not exceed  the  number of shares  reserved
under Section 4 hereof.

          4. Stock  Subject to the Plan.  There shall be reserved  for  issuance
upon the exercise of options  granted under the Plan,  Ten Thousand  (10,000) of
the  Corporation's  Nonvoting Common Shares which may be authorized but unissued
shares of the  Corporation.  Subject to  Section 6 hereof,  the shares for which
options  may be  granted  under the Plan shall not exceed  that  number.  If any
option shall expire or terminate for any reason without having been exercised in
full, the  unpurchased  shares subject thereto shall (unless the Plan shall have
terminated) become available for other options under the Plan.


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          5.      Terms of Option.  Each option granted under the Plan
shall be subject to the following terms and conditions.

                  (a) Period for  Exercise  of Option.  An option  shall only be
         exercisable  for the period  beginning on the Grant Date of the date of
         grant and ending on the day immediately following the tenth (10th) year
         anniversary  of the date of grant;  provided,  however,  that no option
         shall be exercisable prior to the six (6) month anniversary of the date
         on  which  the  Plan is  approved  by the  voting  shareholders  of the
         Corporation.

                  (b)  Exercise  of Options.  The option  price of each share of
         stock purchased upon exercise of an option shall be paid in full (1) in
         cash at the  time  of  such  exercise,  (2) if the  optionee  may do so
         without  violating ss. 16(b) of the 1934 Act and subject to approval by
         the  Committee,  by  delivering  a properly  executed  exercise  notice
         together with irrevocable  instructions to a broker to deliver promptly
         to the  Corporation the total option price in cash, or (3) by tendering
         to the Corporation whole shares of the Nonvoting Common Shares owned by
         him or any combination of whole shares of Nonvoting Common Shares owned
         by him and cash,  having a fair market value equal to the cash exercise
         price  of the  shares  with  respect  to  which  the  option  is  being
         exercised.  For this  purpose,  the  fair  market  value of the  shares
         tendered by the optionee shall be computed as of the exercise date in

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         the  same  manner  as  set  forth  in  Section  3 with  respect  to the
         determination  of the option  price.  An option may be exercised at any
         time or from time to time  during  the term of the  option as to any or
         all whole shares which have become subject to purchase  pursuant to the
         terms of the option.

                  (c)  Termination  of  Option.  If an  optionee  ceases to be a
         director of the  Corporation  for any reason other than the  optionee's
         death, and except as provided below, any option granted to the optionee
         may be  exercised  by him in  whole or in part at any  time  until  the
         expiration of the period  prescribed by subsection  (a) of this Section
         5. In the event of the death of an optionee  before the  expiration  of
         the term of any outstanding  options,  any unexpired  option granted to
         the optionee may be exercised in whole or in part at any time after the
         date of such death by the executor or administrator of his estate or by
         the person or persons  entitled to the option by will or by  applicable
         laws of descent and distribution until the expiration of a one (1) year
         period  immediately  following the date of his or her death,  but in no
         event may the option be exercised  after the  expiration  of the option
         term as prescribed by subsection (a) of this Section 5. An option shall
         terminate  if this  Plan is not  approved  by the  shareholders  of the
         Corporation  within  one (1)  year of the  date on  which  the  Plan is
         adopted.


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                  (d)  Nontransferability  of  Option.  An  option  may  not  be
         transferred  by the  optionee  otherwise  than by  will or the  laws of
         descent and distribution during his lifetime,  and shall be exercisable
         by the optionee only.

                  (e)      Agreement.  Each option grant shall be evidenced by
         an agreement between the optionee and the Corporation.

                  (f)  Certificates.  The  certificate or  certificates  for the
         shares  issuable  upon an  exercise  of an  option  shall be  issued as
         promptly as practicable after such exercise. An optionee shall not have
         any rights of a shareholder  in respect to the Nonvoting  Common Shares
         subject to an option until the date of issuance of a stock  certificate
         to him  for  such  shares.  In no case  may a  fraction  of a share  be
         purchased  or issued  under the Plan,  but if, upon the  exercise of an
         option, a fractional share would otherwise be issuable, the Corporation
         shall pay cash in lieu thereof.

                  (g) No Right to Continued Service.  Nothing in this Plan or in
         any agreement  entered into pursuant  hereto shall confer on any person
         any  right  to  continue  his  or  her  status  as a  director  of  the
         Corporation or affect any rights the  shareholders  of the  Corporation
         may have to terminate his status as a director at any time.


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          6.  Adjustment  of  Shares.  In the  event  of any  change  after  the
effective date of the Plan in the outstanding stock of the Corporation by reason
of  any   reorganization,   recapitalization,   stock  split,   stock  dividend,
combination of shares, exchange of shares, merger or consolidation, liquidation,
or any other  change after the  effective  date of the Plan in the nature of the
shares of stock of the Corporation,  the Committee shall determine what changes,
if any,  are  appropriate  in the number and kind of shares  reserved  under the
Plan, and in the option price under and the number and kind of shares covered by
outstanding  options  granted  under the  Plan.  Any such  determination  of the
Committee hereunder shall be conclusive.

         7.  Amendment.  The Board of Directors of the Corporation may amend the
Plan from time to time and,  with the  consent  of the  optionee,  the terms and
provisions  of  his  option,   except  that  without   approval  by  the  voting
shareholders of the Corporation:

                  (a) amendments  will not be made which would cause the Plan or
         transaction by directors  thereunder to cease to comply with Rule 16b-3
         promulgated under the 1934 Act, or any successor rule; and

                  (b) the  number of shares  subject to options to be granted to
         Outside  Directors or the date of grant or the exercise price and other
         terms thereof shall not be changed

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         except as provided in Section 6 hereof; provided,  further, that if and
         only to the extent  required  by Rule 16b-3  under the 1934 Act,  as in
         effect  from  time to  time,  under  no  circumstances  may the Plan be
         amended more than once every six (6) months.

         No  amendment  of the Plan,  however,  may,  without the consent of the
optionees, make any changes in any outstanding options theretofore granted under
the Plan which would adversely affect the rights of such optionees.

         8. Termination. The Board of Directors of the Corporation may terminate
the Plan at any time  and no  option  shall  be  granted  thereafter;  provided,
however,  that the Plan shall automatically  terminate when options covering all
shares  reserved under the Plan have been granted.  Such  termination,  however,
shall not affect the validity of any option theretofore granted under the Plan.

         9.  Successors.  The Plan  shall be  binding  upon the  successors  and
assigns of the Corporation.

         10.  Governing Law. The terms of any options granted  hereunder and the
rights and  obligations  hereunder of the  Corporation,  the optionees and their
successors in interest  shall,  except to the extent governed by federal law, be
governed by Indiana law.

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         11.   Government  and  Other   Regulations.   The  obligations  of  the
Corporation to issue or transfer and deliver shares under options  granted under
the Plan shall be subject to compliance with all applicable  laws,  governmental
rules and regulations, and administrative action.

         12. Investment Representations.  Unless the shares subject to an option
are registered under applicable federal and state securities laws, each Optionee
by  accepting  an option  shall be deemed  to agree  for  himself  and his legal
representatives  that any option granted to him and any and all Nonvoting Common
Shares  purchased  upon  the  exercise  of the  option  shall  be  acquired  for
investment  and  not  with a view  to,  or for  sale  in  connection  with,  any
distribution  thereof.  Unless  the shares  subject to an option are  registered
under applicable  federal and state securities laws, each notice of the exercise
of any portion of an option shall be accompanied by a representation in writing,
signed by the  Optionee or his legal  representatives,  as the case may be, that
the Nonvoting  Common Shares are being acquired in good faith for investment and
not with a view to, or for sale in connection  with,  any  distribution  thereof
(except in case of the Optionee's legal  representatives  for distribution,  but
not  for  sale,   to  his  legal   heirs,   legatees   and  other   testamentary
beneficiaries).  Any shares issued pursuant to an exercise of an option may bear
a legend evidencing such representations and restrictions.


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         13.  Effective Date. The Plan shall become effective when it shall have
been approved by the Corporation's Board;  provided,  however, that the granting
of any options  under the Plan is  conditional  upon the approval of the Plan by
the  holders  of at  least  a  majority  of  the  voting  common  shares  of the
Corporation  voting  in  person or by proxy at a duly  constituted  meeting,  or
adjournment  thereof,  held before the one (1) year  anniversary  of the date on
which this Plan is adopted by the Board, and the options granted pursuant to the
Plan may not be exercised  until the Board has been advised by counsel that such
approval has been obtained and all other applicable legal requirements have been
met; provided,  further, that if such shareholder approval does not occur before
the one (1) year  anniversary  of the date on which the Board approves the Plan,
the Plan and all outstanding options shall be deemed terminated.

         This Plan has been  approved by the Board of  Directors of Peoples Bank
Corporation of Indianapolis on this 20th day of June, 1996.

                                              PEOPLES BANK CORPORATION OF
                                              INDIANAPOLIS



                                              By: /s/ William E. McWhirter
                                                  -----------------------------
                                                       William E. McWhirter,
                                                       President and Chief
                                                       Executive Officer






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