EMPLOYMENT AGREEMENT


         This Agreement,  is made and dated as of April 17, 1997, by and between
PEOPLES BANK & TRUST  COMPANY,  an Indiana bank and trust company  ("Employer"),
and GERALD R. FRANCIS, a resident of Indiana ("Employee").

                               W I T N E S S E T H

         WHEREAS, Employee has been employed by Employer as an executive officer
and has made valuable  contributions to the profitability and financial strength
of Employer;

         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;

         WHEREAS,  Employer  recognizes  that when faced  with a proposal  for a
change of control of Employer,  Employee will have a significant role in helping
the Board of Directors assess the options and advising the Board of Directors on
what is in the  best  interests  of  Employer  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 President and Chief Operating 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 President and Chief Operating
Officer, and Employee accepts such employment.

         2. Employee agrees to serve as Employer's President and Chief Operating
Officer and to perform  such duties in that office as may be  prescribed  by the
Employer's Bylaws and as may

                                                        -1-

<PAGE>



reasonably be assigned to him by Employer's  Chief  Executive  Officer and those
generally associated with the office held by Employee as determined by the Chief
Executive  Officer from time to time.  Employer  shall not,  without the written
consent of Employee,  relocate or transfer  Employee to a location  more than 30
miles from his current employment location. While employed by Employer, Employee
shall  devote  substantially  all his  business  time and efforts to  Employer's
business and the business of its parent and subsidiaries.

          3. The term of this  Agreement  shall be for an initial  term of three
(3)  years  commencing  on the  April  17,  1997  (the  "Effective  Date"),  and
terminating April 17, 2000; provided,  however, that such term shall be extended
for an additional year on each annual  anniversary of the Effective Date, unless
either party thereto  gives  written  notice to the other party not to so extend
within the period of ninety (90) days prior to an anniversary,  in which case no
further extension shall occur and the term of this Agreement shall end two years
subsequent to the annual anniversary immediately following the date on which the
notice not to extend for an additional  year is given (such term,  including any
extension thereof shall herein be referred to as the "Term").

          4.  Employee  shall  receive  an  annual  salary  of  $185,000  ("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 in the salary it pays  Employee and thereby
increase his Base Compensation.

          5. So long as  Employee  is  employed  by  Employer  pursuant  to this
Agreement,  he shall be  included  as a  participant  in all  present and future
employee  benefit,  retirement,  and compensation  plans generally  available to
employees of Employer, consistent with his Base Compensation and his position as
President  and  Chief  Operating   Officer  of  Employer,   including,   without
limitation, any 401(k) plan, stock incentive plan, employee stock purchase plan,
executive bonus plan, and group life insurance plans.

          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.  So
long  as  Employee  is  employed  by  Employer  pursuant  to the  terms  of this
Agreement,  Employer shall continue in effect  vacation  policies  applicable to
Employee no less  favorable  from his point of view than those written  vacation
policies  in effect on the date  hereof.  So long as  Employee  is  employed  by
Employer pursuant to this Agreement,  Employee shall be entitled to office space
and working conditions no less favorable than were in effect for him on the date
hereof.

         7. Employee's  employment with Employer may be terminated  prior to the
expiration of the Term as follows:

         (A)      The Employer may  immediately  upon written  notice  terminate
                  Employee for cause.  "Cause"  shall be defined as (i) personal
                  dishonesty, (ii) willful misconduct, (iii) breach of fiduciary
                  duty involving  personal profit,  (iv) intentional  failure to
                  perform  stated  duties,  (v) conviction of a violation of any
                  law, rule, or regulation (other than traffic

                                                        -2-

<PAGE>



                  violations  or similar  offenses) or  cease-and-desist  order,
                  (vi) moral turpitude reflecting adversely on the reputation of
                  the  Employer,  or (vii)  any  material  breach  of any  term,
                  condition or covenant of this  Agreement.  The Employer  shall
                  have no further liability to Employee under this Agreement for
                  any period subsequent to the termination for Cause.

         (B)      Either  party may  terminate  this  Agreement  during the Term
                  without  Cause,  upon sixty (60) days prior written  notice to
                  the other  party.  If the  Employer  terminates  the  Employee
                  without Cause (as defined  above),  or if Employee  terminates
                  his employment for Good Reason (as defined  below),  except as
                  provided in Section 7(C) below:

                  (i)      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; and 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;

                  (ii)     In addition,  the  Employer  shall pay the Employee a
                           lump sum severance  payment equal to Employee's  Base
                           Compensation for the immediately  preceding  calendar
                           year; and

                  (iii)    In addition,  for one (1) year following termination,
                           Employer  will  maintain in full force and effect for
                           the continued  benefit of Employee and his dependents
                           each employee  medical and life benefit plan (as such
                           term is 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  benefit is provided by another source. If
                           the terms of any  employee  medical and life  benefit
                           plan of  Employer  or  applicable  laws 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.  The right
                           of Employee to  continued  coverage  under the health
                           and medical  insurance plans of Employer  pursuant to
                           Section  4980B of the Internal  Revenue Code of 1986,
                           as  amended  (the  "Code")  shall  commence  upon the
                           expiration  of  such  period.   Notwithstanding   the
                           foregoing,   Employer   shall  not  be  obligated  to
                           continue life insurance  benefits if the insurer does
                           not consent to such  continuation  and no  disability
                           insurance benefit shall continue past Employee's date
                           of termination of employment.

                                                        -3-

<PAGE>



For purposes of this  Agreement,  "Good  Reason" for  Employee to terminate  his
employment  with  Employer  means:  (i) a  substantial  reduction in  Employee's
responsibility and authority over the management and affairs of Employer without
Employee's  consent  or;  (ii) any  material  breach of any term,  condition  or
covenant of Employer under this  Agreement;  or (iii) the  requirement  that the
Employee  move his  personal  residence,  or  perform  his  principal  executive
functions,  more than 30 miles  from his  primary  office as of the later of the
Effective Date and the most recent voluntary relocation by the Employee.

         (C)      If,  following  a  Change  of  Control,   Employer  terminates
                  Employee   without  Cause  (as  defined   above)  or  Employee
                  terminates  his  employment  with Employer for Good Reason (as
                  defined  above) in lieu of any  payments or coverage  provided
                  under Section 7(B) above,

                  (i)      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; and 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;

                  (ii)     In addition,  the  Employer  shall pay the Employee a
                           severance  payment  equal  to 299% of the  Employee's
                           Average Annual  Compensation.  Such severance payment
                           shall be due and payable on the date fifteen calendar
                           days   following   the  date  on   which   Employee's
                           employment   terminates   under  this  Section  7(C),
                           unless,  prior to the date 90 days before the date on
                           which a Change of Control occurs, Employee files with
                           the Secretary of Employer a duly executed irrevocable
                           written  election to defer such  payment,  specifying
                           the  date  or  dates  on  which  such   payment   (or
                           installments  in the aggregate equal to such payment)
                           shall  be  made;  provided,  that  no  such  deferral
                           election  shall provide for any payment later than 10
                           years after termination of employment.  Such deferred
                           payment  obligation shall bear interest from the date
                           on which it would otherwise be payable until the date
                           paid at 6% per year.  For  purposes of  figuring  the
                           severance   payment,   Employee's   "Average   Annual
                           Compensation"   shall   equal  the   average   annual
                           compensation,  including  bonuses and taxable  fringe
                           benefits,   which  was  paid  by  the   Employer  and
                           includible  in the gross  income of the  Employee for
                           the five most recent  taxable years  ending,  or such
                           portion of the five year period during which Employee
                           performed  services  for  the  Employer,  before  the
                           Change of Control.  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,

                                                        -4-

<PAGE>



                           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 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
                           7(C), the "Reduced  Amount" shall be the amount which
                           maximizes  the amount  payable  without  causing  any
                           portion of the  payment to be  non-deductible  by the
                           Employer because of Section 280G of the Code; and

                  (iii)    In addition,  for one (1) year following termination,
                           Employer  will  maintain in full force and effect for
                           the continued  benefit of Employee and his dependents
                           each employee  medical and life benefit plan (as such
                           term is 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  benefit is provided by another source. If
                           the terms of any  employee  medical and life  benefit
                           plan of  Employer  or  applicable  laws 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.  The right
                           of Employee to  continued  coverage  under the health
                           and medical  insurance plans of Employer  pursuant to
                           Section  4980B of the Code  shall  commence  upon the
                           expiration  of  such  period.   Notwithstanding   the
                           foregoing,   Employer   shall  not  be  obligated  to
                           continue life insurance  benefits if the insurer does
                           not consent to such  continuation  and no  disability
                           insurance benefit shall continue past Employee's date
                           of termination of employment.

         For purposes of this  Agreement,  a "Change of Control"  shall mean the
occurrence of any of the following: (i) the sale, lease, transfer, conveyance or
other disposition  (other than by way of merger or  consolidation),  in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its  Subsidiaries  taken as a whole to any "person" (as such term is
used in  Section  13(d)(3)  of the  Exchange  Act) (ii) the  adoption  of a plan
relating  to  the   liquidation  or  dissolution  of  the  Company,   (iii)  the
consummation of any transaction  (including,  without limitation,  any merger or
consolidation)  the result of which is that any  "person"  (as  defined  above),
other  than  William E. "Mac"  McWhirter,  or his spouse or lineal  descendants,
becomes  the  beneficial  owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act),  directly or indirectly,  of more than 50% of the
voting  stock of the  Company or (iv) the first day on which a  majority  of the
members of the Board of Directors of the Company are not  Continuing  Directors.
"Continuing Directors" means, as of any date of determination, any member of the
Board  of  Directors  of the  Company  who (i) was a  member  of such  Board  of
Directors January 24, 1996 or (ii) was nominated for election or elected to such
Board of Directors with the approval of a majority of the  Continuing  Directors
who were members of such Board at the time of such nomination.

                                                        -5-

<PAGE>



         (D)      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 sixty (60) 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 order to induce Employer to enter into this  Agreement,  Employee
hereby agrees as follows:

         (A)      Unless otherwise required to do so by law, including the order
                  of a court or governmental agency,  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  secrets  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 one (1) year after  termination  of Employee's
                  employment  with Employer for any reason,  Employee  shall not
                  (a)  compete,  directly or  indirectly,  with the  business of
                  Employer as conducted during the term of this Agreement (which
                  business shall include the financial  services  industry),  or
                  have any  interest  (including  any  interest or  association,
                  including  but not  limited  to,  that of owner,  part  owner,
                  partner,  shareholder,  director,  officer,  employee,  agent,
                  consultant,  lender or advisor) in any person,  firm or entity
                  which  competes  with  Employer  and  has  offices  physically
                  located  in the  Indianapolis  metropolitan  statistical  area
                  (each  such   person,   firm  or  entity  is  referred  to  as
                  "Competitor"); (b) solicit or accept business for or on behalf
                  of any  Competitor;  or (c) solicit,  induce or  persuade,  or
                  attempt to solicit, induce or persuade, any person to work for
                  or provide services to or provide financial assistance to, any
                  Competitor.  Nothing  contained  in this Section 8(B) shall be
                  deemed to prevent or limit the Employee's right either to be a
                  mere customer of any  Competitor,  or to invest in the capital
                  stock or other  securities of any business solely as a passive
                  or minority investor, provided that his holdings do not exceed
                  five percent (5%) of the issued and outstanding  capital stock
                  of such business.

         (C)      If Employee's  employment  by Employer is  terminated  for any
                  reason,  Employee  will turn over  immediately  thereafter  to
                  Employer  all  business   correspondence,   letters,   papers,
                  reports,  customers'  lists,  financial  statements,  records,
                  drawings,  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.

                                                        -6-

<PAGE>



         (D)      Employee acknowledges that the covenants of this Section 8 are
                  reasonable in scope and duration and reasonably  necessary and
                  appropriate  to protect  the  goodwill  and other  appropriate
                  interests of Employer  following  Employee's  termination  and
                  that any violation of such  covenants by Employee would result
                  in irreparable  harm to Employer,  for which any remedy at law
                  would be inadequate.  In addition to any other remedy to which
                  it may be  entitled,  Employer  shall be entitled to equitable
                  relief,  including specific performance,  for any violation of
                  Section 8.

         9.  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  section 7 based on Cause,  Good  Reason on  following  a Change of
Control shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for such termination.

         10. If a dispute arises regarding the termination of Employee  pursuant
to  Section  7  hereof  or as to  the  interpretation  or  enforcement  of  this
Agreement,   said  dispute   shall  be  resolved  by  binding   arbitration   in
Indianapolis,  Indiana  determined in accordance  with the rules of the American
Arbitration  Association.  Notwithstanding  the  foregoing,  Employer  shall  be
entitled  to seek any  remedy in a  proceeding  at law or in equity in any court
having jurisdiction for any breach of Section 8. If said dispute arises, whether
instituted by formal legal  proceedings or otherwise,  including any action that
the  Employee  takes to defend  against any action  taken by the  Employer,  the
Employee  shall be reimbursed for all costs and expenses,  including  reasonable
attorneys'  fees,  arising from such dispute,  proceedings or actions,  provided
that the Employee  obtains either a written  settlement or a final judgment by a
court of competent  jurisdiction  substantially in his favor. Such reimbursement
shall be paid within ten days of Employee's  furnishing to the Employer  written
evidence,  which may be in the form, among other things,  of a canceled check or
receipt, of any costs or expenses incurred by the Employee.

         11.  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.

         12.  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:            Gerald R. Francis
                                    ======================





                                                        -7-

<PAGE>



         If to Employer:            Chairman of the Board of Directors
                                    Peoples Bank & Trust Company
                                    130 East Market Street
                                    Indianapolis, Indiana 46204

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.

         13. The validity,  interpretation,  and  performance  of this Agreement
shall be governed by the laws of the State of Indiana.

         14.  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
reasonably  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 deemed a  termination  pursuant to Section 7(C). As used in
this Agreement,  "Employer" shall mean Employer as hereinbefore  defined and any
successor to its business or assets as aforesaid.

         15.  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.

         16.  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. This
is the entire  agreement  between  Employer and Employee  concerning the subject
matter hereof and all prior agreements, written or oral, are superseded.

         17. 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.

         18. 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 11 and section 14
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 11 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.
                            [signature page follows]

                                                        -8-

<PAGE>


         IN  WITNESS  WHEREOF,  the  parties  have  caused the  Agreement  to be
executed as of the date first written above.


                                   "Employer"

                                                PEOPLES BANK & TRUST COMPANY


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



                                   "Employee"


                                              /s/ Gerald R. Francis
                                              -------------------------------
                                                Gerald R. Francis










                                                        -9-