EXHIBIT 10.1


NAMED EXECUTIVE OFFICER SALARY AND BONUS ARRANGEMENTS FOR 2007











Exhibit 10.1


Named Executive Officer Salary and Bonus Arrangements for 2007


Base Salaries


          The base salaries for 2007 for the executive officers (the “named executive officers”) of MutualFirst Financial, Inc. (the “Company”) and Mutual Federal Savings Bank who will be named in the compensation table that will appear in the Company’s upcoming 2007 annual meeting proxy statement are as follows:

	
   
Name and Title
   	
   
 
   	
   
Base Salary
   
	
   


   	
   
 
   	
   


   
	
  
David W. Heeter 
   President and Chief Executive 
   Officer of the Company
  	
  
 
  	
  
$233,500
  
	
   
  	
  
 
  	
  
 
  
	
  
Patrick C. Botts
   Executive Vice President of 
   the Company  and President and 
   Chief Operating Officer of the Bank
  	
  
 
  	
  
$189,000
  
	
  
 
  	
  
 
  	
  
 
  
	
  
Timothy J. McArdle 
   Chief Financial Officer of 
   the Company and the Bank
  	
  
 
  	
  
$172,500
  
	
  
 
  	
  
 
  	
  
 
  
	
  
Steven R. Campbell 
   Senior Vice President of the Bank
  	
  
 
  	
  
$160,000
  
	
  
 
  	
  
 
  	
  
 
  
	
  Steven C. Selby 
   Senior Vice President of the Bank
  	
  
 
  	
  
$149,000
  




Description of 2007 Bonus Plan


          The Company has established a new cash incentive bonus plan for 2007 for all officers and employees of the Company and Mutual Federal (the “2007 Bonus Plan”).  The quarterly payments will be made if and to the extent the Company’s performance in 2007 exceeds baseline levels on certain key performance indicators (which will be the same for all officers and employees), including loan and deposit growth, net interest margin improvement, growth in non-interest income, the ratios of non-performing assets to total assets and net charge-offs to total assets, and management of general and administrative expenses.  The key performance indicators for the potential additional annual incentive payments to officers will be 2007 net interest income after provision for loan losses, non-interest income and non-interest expense.


          The amounts
of the quarterly and annual bonuses under the 2007 Bonus Plan, if earned, will
be determined by multiplying the employee’s salary by the employee’s
payout percentage.  While the payout percentages will vary from employee to
employee, they will increase proportionately for all officers and employees if
and to the extent the Company attains a performance level above the baseline
performance threshold. Annual incentive payouts to officers will only be made if
actual performance exceeds baseline performance levels. Depending on the extent
to which (if at all) actual performance exceeds baseline performance levels, the
aggregate amount payable pursuant to the quarterly bonus component and the
annual bonus component will range from 35% to 48% of the amount by which actual
pre-tax net income from operations for the quarter or year, as applicable,
exceeds the baseline level.



          
Additional information about the 2007 Bonus Plan is incorporated herein by
reference from the Company’s definitive proxy statement for its Annual Meeting
of Stockholders to be held in April 2007, except for information contained under
the headings “Compensation Committee Report,” and “Report of the
Audit/Compliance Committee,” a copy of which will be filed not later than 120
days after the close of the fiscal year.