PEOPLES BANK CORPORATION OF INDIANAPOLIS

                               GUARANTY AGREEMENT



THIS  AGREEMENT  is  entered  into as of  this  17th  day of  April,  1997  (the
"Effective  Date"), by and between Peoples Bank Corporation of Indianapolis (the
"Company") and Gerald R. Francis (the "Employee").

         WHEREAS,  the Employee has  heretofore  been employed by Peoples Bank &
Trust Company (the "Bank") as its President is  experienced in all phases of the
business of the Bank, and has become the President of the Company; and

         WHEREAS,  the Board of Directors (the "Board") of the Company  believes
it is in the best interests of the Company to enter into this Agreement with the
Employee  in  order  to  assure  continuity  of  management  of the Bank and the
Company,  and to reinforce and encourage the continued  attention and dedication
of the Employee to his assigned duties; and

         WHEREAS, the parties desire by this writing to set forth the continuing
employment relationship between the Company and the Employee.

         NOW, THEREFORE, it is AGREED as follows:

         1.  Employment.  The  Employee  is  employed  as the  President  of the
Company.  The Employee shall render such  administrative and management services
for the Company as are currently  rendered and as are  customarily  performed by
persons  situated  in a similar  executive  capacity.  The  Employee  shall also
promote,  by entertainment or otherwise,  as and to the extent permitted by law,
the business of the Company.  The  Employee's  other duties shall be such as the
Company's Chief Executive Officer may from time to time reasonably direct.

         2.       Consideration from Company: Joint and Several Liability.

                  (a) In lieu of paying the  Employee a base  salary  during the
term of this Agreement,  the Company hereby agrees that to the extent  permitted
by law, it shall be jointly and  severally  liable with the Bank for the payment
of all amounts due under the employment  agreement (the "Bank  Agreement") dated
as of April 17, 1997 between the Bank and the Employee.

                  (b) The Board may in its  discretion  at any time  during  the
term of this  Agreement  agree to pay the Employee a base salary for any portion
of the term of this Agreement. If the Board agrees to pay such salary, the Board
may  thereafter  review  the  rate of the  Employee's  salary,  and in its  sole
discretion may decide to increase or decrease or eliminate his salary.


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         3.  Discretionary  Bonuses:  Participation  in Retirement,  Medical and
Other Plans.  The Employee  shall  participate  in an equitable  manner with all
other senior management  employees of the Company in discretionary  bonuses,  if
any,  that  the  Board  may  award  from  time to time to the  Company's  senior
management  employees,  as well as in (i) any of the following plans or programs
that the  Company  may now or in the  future  maintain:  group  hospitalization,
disability,  health, dental, sick leave, life insurance,  travel and/or accident
insurance, auto allowance/auto lease, retirement,  pension, and/or other present
or future qualified plans provided by the Company;  and (ii) any fringe benefits
which are or may become available to the Company's senior management  employees,
including, for example, any stock option or incentive compensation plans.

         4.   Indemnification.   The  Company   agrees  that  its   Articles  of
Incorporation  or Bylaws  shall  continue  to  provide  for  indemnification  of
directors,  officers,  employees  and  agents  of  the  Company,  including  the
Employee,  during the full term of this  Agreement,  and to at all times provide
appropriate insurance for such purposes.

         5. Term.  This  Agreement  shall continue in effect so long as the Bank
Agreement remains in effect.

         6.       Successors and Assigns.

                  (a) Company.  This Agreement shall inure to the benefit of and
be binding  upon any  corporate or other  successor  of the Company  which shall
acquire,  directly  or  indirectly,  by  merger,   consolidation,   purchase  or
otherwise, all or substantially all of the assets or stock of the Company.

                  (b) Employee.  Since the Company is contracting for the unique
and  personal  skills of the  Employee,  the Employee  shall be  precluded  from
assigning or delegating his rights or duties  hereunder  without first obtaining
the written  consent of the  Company;  provided,  however,  that nothing in this
paragraph  shall  preclude (i) the Employee from  designating  a beneficiary  to
receive any benefit  payable  hereunder  upon his death,  or (ii) the executors,
administrators,  or other legal  representatives  of the  Employee or his estate
from assigning any rights hereunder to the person or persons entitled thereunto.

                  (c) Attachment. Except as required by law, no right to receive
payments under this  Agreement  shall be subject to  anticipation,  commutation,
alienation, sale, assignment,  encumbrance,  charge, pledge, or hypothecation or
to exclusion,  attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary,  to effect any such action shall
be null, void and of no effect.

         7.  Amendments.  No amendments or additions to this Agreement  shall be
binding  unless  made in  writing  and signed by all of the  parties,  except as
herein otherwise specifically provided.


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         8. Applicable  Law. Except to the extent  preempted by Federal law, the
laws of the State of  Indiana  shall  govern  this  Agreement  in all  respects,
whether as to its validity, construction, capacity, performance or otherwise.

         9.  Severability.  The  provisions  of this  Agreement  shall be deemed
severable and the  invalidity  or  unenforceability  of any provision  shall not
affect the validity or enforceability of the other provisions hereof.

         10. Entire Agreement.  This Agreement,  together with any understanding
or  modifications  thereof  as  agreed  to in  writing  by  the  parties,  shall
constitute the entire agreement between the parties hereto.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first hereinabove written.


                                            PEOPLES BANK CORPORATION
                                                     OF INDIANAPOLIS


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



                                                     Employee

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





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