April 17, 1997


                        INCENTIVE STOCK OPTION AGREEMENT
                 UNDER PEOPLES BANK CORPORATION OF INDIANAPOLIS
                                STOCK OPTION PLAN

Gerald R. Francis

         You are  hereby  granted  the  option  to  purchase  a total of  33,000
Nonvoting  Common Shares,  without par value  ("Nonvoting  Common  Shares"),  of
Peoples Bank  Corporation  of  Indianapolis  ("Peoples")  over the next ten (10)
years pursuant to the Peoples Bank Corporation of Indianapolis Stock Option Plan
(the "Plan"), on the following terms and conditions:

          1. This option shall become  exercisable in three  installments.  This
option may be  exercised  for up to 10,000  shares at any time after the closing
price of each  Nonvoting  Common Share on the Nasdaq  National  Market (or other
exchange on which such shares are then traded) (the "Closing  Market  Price") is
equal to or greater  than $60 per share for a period of at least 20  consecutive
trading days ("Option Installment I"). This option award may be exercised for an
additional  11,000 shares at any time after the Closing Market Price is equal to
or greater  than $70 per share for a period of at least 20  consecutive  trading
days  ("Option  Installment  II").  This option award may be  exercised  for the
remaining  12,000 shares at any time after the Closing  Market Price is equal to
or greater  than $80 per share for a period of at least 20  consecutive  trading
days ("Option Installment III").

If a Change of Control (as defined in the Plan) occurs at any time,  this option
award shall become immediately  exercisable in its entirety.  If your employment
by Peoples Bank and Trust  Company is  terminated  without  cause or by you with
Good Reason pursuant to Section 7(B) of your  Employment  Agreement with Peoples
Bank & Trust  Company  dated as of April 17, 1997,  Option  Installment  I shall
become  immediately  exercisable  in its  entirety.  The  purchase  price of the
Nonvoting Common Shares subject to this option is $45.25 per share. You must pay
this  purchase  price in cash at the time this  option  (or any  vested  portion
thereof) is exercised;  provided,  however that,  with the approval of the Board
Related  Affairs  Committee (the  "Committee"),  you may exercise your option by
tendering to Peoples Nonvoting Common Shares owned by you, or any combination of
whole Nonvoting Common Shares owned by you and cash,  having a fair market value
equal to the cash exercise  price of the shares with respect to which the option
is exercised by you. For this purpose, any shares so tendered shall be deemed to
have a fair market value equal to the mean between the highest and lowest quoted
selling prices for the shares on the date of exercise of the option (or if there
were no sales on such date the weighted average of the means between the highest
and lowest quoted selling prices on the nearest date before and the nearest date
after the date of  exercise  of the  option),  as  reported  in The Wall  Street
Journal or a similar  publication  selected by the  Committee.  To exercise this
option (or any vested portion thereof), you must send written notice to Peoples'
Secretary at the address noted in Section 13 hereof. Such notice shall state the
number of shares in

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respect of which the option is being exercised,  shall state what portion of the
option  exercised is an incentive stock option or a  non-qualified  stock option
(in  accordance  with  Section 11  hereof)  and shall be signed by the person or
persons so exercising the option. Such notice shall be accompanied by payment of
the full cash option price for such shares or, if the Committee  has  authorized
the use of the stock swap  feature  provided  for above,  such  notice  shall be
followed as soon as  practicable  by the  delivery of the option  price for such
shares. Certificates evidencing Nonvoting Common Shares will not be delivered to
you until  payment has been made.  Under certain  circumstances,  subject at all
times to compliance  with  applicable  securities  laws, the Plan permits you to
deliver a notice to your broker to deliver the cash to Peoples  upon the receipt
of such cash from the sale of Nonvoting Common Shares.

         2. In addition to any adjustments required by Section 7 of the Plan, in
the event issuance of a share split or other share dividend consisting of shares
of Voting or Nonvoting  Common Shares,  the number of Nonvoting Common Shares to
be purchased  pursuant to this Agreement,  the purchase price of each share, and
the Closing Market Prices per share  triggering  exerciseability  of the options
under paragraph 1, above,  will be adjusted as follows:  (a) the total number of
shares to be  purchased  pursuant  to the option will be equal to the product of
(i) the total number of shares subject to the option before such issuance;  (ii)
a  fraction,  the  numerator  of which is the  total  number  of  common  shares
outstanding  immediately after such issuance and the denominator of which is the
total number of common shares  outstanding  immediately  prior to such issuance;
and (b) the  purchase  price of the shares  subject  to the  option and  Closing
Market  Prices  triggering  exerciseability  will  be  equal  to the  (i)  price
immediately before such issuance;  times (ii) a fraction, the numerator of which
is the total  number  of common  shares  outstanding  immediately  prior to such
issuance  and the  denominator  of which is the total  number  of common  shares
outstanding immediately after such issue.

          3. The term of this option (the  "Option  Term") shall be for a period
of ten (10) years from the date of this letter,  subject to earlier  termination
as provided in paragraphs 4 and 5 hereof.  Except as otherwise  provided  below,
the option may be  exercised at any time,  or from time to time,  in whole or in
part,  until the  Option  Term  expires,  but in no case may fewer than 100 such
shares be purchased at any one time,  except to purchase a residue of fewer than
100 shares.

         4. Thirty (30) days after you cease to be an employee of Peoples or any
of its subsidiaries  for any reason other than  retirement,  permanent and total
disability,  or death, this option shall forthwith terminate. If your employment
by Peoples or any of its  subsidiaries  is  terminated  by reason of  retirement
(which means such  termination  of  employment  as shall entitle you to early or
normal  retirement  benefits under any then existing  pension plan of Peoples or
one of its  subsidiaries),  Option Installment II and Option Installment III (if
such  installments  have not yet become  exercisable)  shall each  terminate and
expire immediately prior to such termination.  You may, however, exercise Option
Installment I (and, if they have not expired pursuant to the foregoing sentence,
Option Installment II and Option Installment III) in whole or in part within the
three (3) month period  following your  retirement  (but not later than the date
upon  which  this  option  would  otherwise  expire),   whether  or  not  Option
Installment I was otherwise exercisable on the date of retirement.  If you cease
to be an

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employee of Peoples or any of its  subsidiaries  because of your  permanent  and
total  disability,  Option  Installment II and Option  Installment  III (if such
installments  have not yet become  exercisable)  shall each terminate and expire
immediately  prior  to such  termination.  You  may,  however,  exercise  Option
Installment I (and, if they have not expired pursuant to the foregoing sentence,
Option  Installment  II and Option  Installment  III) in whole or in part at any
time within one (1) year after such  termination of employment by reason of such
disability  (but not later than the date upon which this option would  otherwise
expire),  whether or not Option  Installment I was otherwise  exercisable at the
time of termination.

          5. If you die while  employed  by Peoples or any of its  subsidiaries,
Option  Installment II and Option Installment III (if such installments have not
yet become  exercisable) shall each terminate and expire immediately at the time
of your  death.  However,  if you die while  employed  by  Peoples or any of its
subsidiaries,  within three (3) months after the  termination of your employment
because of  retirement,  or within one (1) year  after the  termination  of your
employment because of permanent and total disability, Option Installment I (and,
if they have not expired pursuant to the foregoing sentence,  Option Installment
II and  Option  Installment  III) may be  exercised  in whole or in part by your
executor, administrator, or estate beneficiaries at any time within one (1) year
after the date of your death (but not later than the date upon which this option
would  otherwise  expire),  whether or not Option  Installment  I was  otherwise
exercisable at the time of termination.

          6. This option is non-transferable  otherwise than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order.
It may be  exercised  only by you or your  guardian,  if any, or, if you die, by
your executor,  administrator,  or beneficiaries of your estate who are entitled
to your option.

         7. All rights to exercise  this option will expire,  in any event,  ten
(10) years from the date of this letter.

         8.  Certificates  evidencing shares issued upon exercise of this option
may bear a legend  setting  forth among other  things such  restrictions  on the
disposition or transfer of the shares of Peoples as Peoples may deem  consistent
with applicable federal and state laws.

          9. Nothing in this option  shall  restrict the right of Peoples or its
shareholders to terminate your employment or service at any time with or without
cause.

          10. This option is subject to all the terms, provisions and conditions
of the Plan, which is incorporated herein by reference,  and to such regulations
as may from time to time be adopted by the Committee.  A copy of the Plan may be
obtained from the Secretary of Peoples. In the event of any conflict between the
provisions of the Plan and the provisions of this letter, the terms,  conditions
and provisions of the Plan shall control,  and this letter shall be deemed to be
modified accordingly.


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         11. To the extent possible,  this Stock Option Agreement is intended to
grant an option which meets all of the  requirements  of incentive stock options
as defined in Section 422 of the Internal  Revenue Code. To the extent possible,
and subject to and upon the terms,  conditions and provisions of the Plan,  each
and every  provision of this  Agreement  shall be  administered,  construed  and
interpreted  so that the option  granted herein shall so qualify as an incentive
stock option. To the extent the option cannot meet the requirements of incentive
stock  options,  the stock  option  shall be  treated as a  non-qualified  stock
option. Without limiting the foregoing, if options for shares having an exercise
price in excess of $100,000  (taking into account options held by you under your
agreement dated January 24, 1996) become  exercisable in any calendar year, then
options  first  becoming  exercisable  for the  number of whole  shares  with an
aggregate  exercise  price of not more than $100,000  shall be deemed  incentive
stock options and the remainder of such options shall be non-qualified  options.
To the extent the option is deemed a non-qualified  stock option, you are hereby
granted the right to receive, upon exercise of such non-qualified option, a cash
amount (cash award) in the amount necessary to reimburse you for federal,  state
and local income taxes  imposed on you as a  consequence  of the exercise of the
non-qualified stock option and the receipt of this cash award.

         12. You agree to advise Peoples  immediately  upon any sale or transfer
of any  Nonvoting  Common  Shares  received upon exercise of this option (or any
vested portion thereof) to the extent such sale or transfer takes place prior to
one year from the date of any  exercise  of this option or within two years from
the date hereof.

         13.  All  notices  by you to Peoples  and your  exercise  of the option
herein granted,  shall be addressed to Peoples Bank Corporation of Indianapolis,
130 East Market Street,  Indianapolis,  Indiana 46204, Attention:  Secretary, or
such other address as Peoples may, from time to time, specify.

                                        Very truly yours,

                                        PEOPLES BANK CORPORATION OF
                                        INDIANAPOLIS


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

Accepted on the date above written:


/s/ Gerald R. Francis
Gerald R. Francis












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