Exhibit 10(2)

                       City Savings Financial Corporation
                                STOCK OPTION PLAN

     1. Purpose.  The purpose of the City Savings  Financial  Corporation  Stock
Option  Plan (the  "Plan") is to provide to  directors,  officers  and other key
employees of City Savings Financial  Corporation (the "Holding Company") and its
majority-owned  and wholly-owned  subsidiaries  (individually a "Subsidiary" and
collectively the "Subsidiaries"),  including,  but not limited to, Michigan City
Savings  and Loan  Association  upon its  conversion  to stock  form  ("Michigan
City"),  who are materially  responsible  for the management or operation of the
business of the  Holding  Company or a  Subsidiary  and have  provided  valuable
services to the Holding  Company or a  Subsidiary,  a favorable  opportunity  to
acquire  Common  Stock,  without  par value  ("Common  Stock"),  of the  Holding
Company,  thereby  providing  them with an  increased  incentive to work for the
success of the Holding  Company and its  Subsidiaries  and better  enabling each
such entity to attract and retain capable directors and executive personnel.

     2.  Administration  of the Plan. The Plan shall be administered,  construed
and  interpreted  by a committee  (the  "Committee")  consisting of at least two
members of the Board of  Directors  of the  Holding  Company,  each of whom is a
"Non-Employee  Director"  within  the  meaning  of the  definition  of that term
contained in Reg. ss. 16b-3  promulgated  under the  Securities  Exchange Act of
1934,  as amended  (the "1934  Act").  The  members  of the  Committee  shall be
designated  from time to time by the Board of Directors of the Holding  Company.
The decision of a majority of the members of the Committee shall  constitute the
decision  of the  Committee,  and the  Committee  may act either at a meeting at
which a  majority  of the  members of the  Committee  is present or by a written
consent  signed by all members of the  Committee.  The Committee  shall have the
sole, final and conclusive  authority to determine,  consistent with and subject
to the provisions of the Plan:

          (a)  the individuals  (the  "Optionees") to whom options or successive
               options shall be granted under the Plan;

          (b)  the time when options shall be granted hereunder;

          (c)  the  number of shares of Common  Stock to be  covered  under each
               option;

          (d)  the option price to be paid upon the exercise of each option;

          (e)  the period within which each such option may be exercised;

          (f)  the extent to which an option is an  incentive  stock option or a
               non-qualified stock option; and

          (g)  the terms and  conditions of the  respective  agreements by which
               options granted shall be evidenced.

     The Committee  shall also have authority to prescribe,  amend,  waive,  and
rescind rules and regulations relating to the Plan, to accelerate the vesting of
any stock options made  hereunder  (subject to Office of Thrift and  Supervision
regulations),  to make amendments or  modifications  in the terms and conditions
(including  exercisability) of the options relating to the effect of termination
of  employment  of the  optionee  (subject  to the last  sentence  of  Section 9
hereof), to waive any restrictions or conditions applicable to any option or the
exercise thereof, and to make all other determinations necessary or advisable in
the administration of the Plan.

     3.  Eligibility.  The Committee  may,  consistent  with the purposes of the
Plan,  grant  options to  officers  and other key  employees  and  directors  or
directors  emeritus (whether or not also employees) of the Holding Company or of
a  Subsidiary  who in the  opinion  of the  Committee  are  from  time  to  time
materially  responsible  for the  management or operation of the business of the
Holding  Company or of a Subsidiary and have provided  valuable  services to the
Holding  Company or a Subsidiary;  provided,  however,  that in no event may any
employee who owns (after application of the ownership rules in ss. 425(d) of the
Internal  Revenue  Code of  1986,  as  amended  (the  "Code"))  shares  of stock
possessing  more than 10  percent  of the  total  combined  voting  power of all
classes of stock of the Holding Company or any of its Subsidiaries be granted an
incentive stock option  hereunder  unless at the time such option is granted the
option price is at least 110% of the fair market  value of the stock  subject to
the option and such option by its terms is not exercisable  after the expiration
of five (5) years  from the date such  option is  granted.  No  employee  may be
granted  options under the Plan for more than ________ shares of Common Stock in
any calendar year.  Subject to the foregoing  provisions,  an individual who has
been  granted  an option  under  the Plan (an  "Optionee"),  if he is  otherwise
eligible,  may be granted an additional option or options if the Committee shall
so determine.

     4. Stock Subject to the Plan. There shall be reserved for issuance upon the
exercise  of  options  granted  under  the Plan,  shares of Common  Stock of the
Holding  Company  equal to 10% of the total  number  of  shares of Common  Stock
issued by the Holding  Company upon the  conversion of Michigan City from mutual
to stock form, which may be authorized but unissued shares or treasury shares of
the Holding Company.  Subject to Section 7 hereof,  the shares for which options
may be granted under the Plan shall not exceed that number.  If any option shall
expire or  terminate  or be  surrendered  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.

     5. Terms of Options. Each option granted under the Plan shall be subject to
the following  terms and  conditions  and to such other terms and conditions not
inconsistent therewith as the Committee may deem appropriate in each case:

          (a)  Option  Price.  The price to be paid for shares of stock upon the
               exercise of each option shall be  determined  by the Committee at
               the time such option is granted, but such price in no event shall
               be  less  than  the  fair  market  value,  as  determined  by the
               Committee  consistent  with Treas.  Reg.  ss.  20.2031-2  and any
               requirements ofss. 422A of the Code, of such stock on the date on
               which such option is granted.

          (b)  Period for Exercise of Option. An option shall not be exercisable
               after  the  expiration  of such  period  as shall be fixed by the
               Committee at the time of the grant thereof, but such period in no
               event  shall  exceed  ten (10) years and one day from the date on
               which such  option is granted;  provided,  that  incentive  stock
               options  granted  hereunder shall have terms not in excess of ten
               (10) years and non-qualified options shall be for a period of not
               in  excess  of ten (10)  years and one day from the date of grant
               thereof.  Options  shall be  subject to  earlier  termination  as
               hereinafter provided.

          (c)  Exercise  of  Options.  The  option  price of each share of stock
               purchased upon exercise of an option shall be paid in full at the
               time of such  exercise.  Payment may be in (i) cash,  (ii) if the
               Optionee may do so in conformity with Regulation T (12 C.F.R. ss.
               220.3(e)(4)) without violating ss. 16(b) or ss. 16(c) of the 1934
               Act,  pursuant  to a broker's  cashless  exercise  procedure,  by
               delivering a properly  executed  exercise  notice  together  with
               irrevocable  instructions to a broker to promptly  deliver to the
               Holding  Company the total  option price in cash and, if desired,
               the  amount  of any  taxes to be  withheld  from  the  Optionee's
               compensation as a result of any withholding tax obligation of the
               Holding Company or any of its Subsidiaries,  as specified in such
               notice,  or  (iii)  beginning  on a date  which  is  three  years
               following  Michigan  City's  conversion from mutual to stock form
               and with the approval of the Committee, by tendering whole shares
               of the Holding  Company's  Common Stock owned by the Optionee 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,  any  shares  so  tendered  by an
               Optionee 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 for the shares on the
               nearest date before and the nearest after the date of exercise of
               the  option as  prescribed  by Treas.  Reg.  ss.  20-2031-2),  as
               reported  in The Wall  Street  Journal  or a similar  publication
               selected by the Committee. The Committee shall have the authority
               to grant  options  exercisable  in full at any time during  their
               term, or  exercisable in such  installments  at such times during
               their term as the Committee  may  determine;  provided,  however,
               that options  shall not be  exercisable  during the first six (6)
               months of their term,  and provided  further  that options  shall
               become  exercisable  no earlier  than at the rate of 20% per year
               beginning  on the  anniversary  of the  date  of  grant  of  such
               options,  subject  to  earlier  vesting  in the event of death or
               disability.  Installments  not purchased in earlier periods shall
               be  cumulated  and be available  for  purchase in later  periods.
               Subject to the other  provisions  of this Plan,  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 or the Plan, but not
               at any time as to fewer than one hundred  (100) shares unless the
               remaining  shares which have become subject to purchase are fewer
               than one hundred (100) shares. An option may be exercised only by
               written notice to the Holding Company, mailed to the attention of
               its  Secretary,  signed by the  Optionee (or such other person or
               persons as shall  demonstrate to the Holding Company his or their
               right to exercise the option), specifying the number of shares in
               respect  of which  it is  being  exercised,  and  accompanied  by
               payment  in full in either  cash or by check in the amount of the
               aggregate purchase price therefor, by delivery of the irrevocable
               broker  instructions  referred to above, or, if the Committee has
               approved  the use of the stock swap  feature  provided for above,
               followed  as soon as  practicable  by the  delivery of the option
               price for such shares.

          (d)  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 shares of
               stock  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 Holding Company shall pay cash in lieu thereof.

          (e)  Termination of Option.  If an Optionee  (other than a director or
               director  emeritus of the Holding Company or its Subsidiaries who
               is not an  employee of the  Holding  Company or its  Subsidiaries
               ("Outside  Director"))  ceases to be an  employee  of the Holding
               Company  and  the   Subsidiaries   for  any  reason   other  than
               retirement, permanent and total disability (within the meaning of
               ss.  22(e)(3) of the Code),  or death,  any option granted to him
               shall  forthwith  terminate.  Leave of  absence  approved  by the
               Committee  shall not constitute  cessation of  employment.  If an
               Optionee  (other  than  an  Outside  Director)  ceases  to  be an
               employee of the Holding Company and the Subsidiaries by reason of
               retirement,  any option granted to him may be exercised by him in
               whole or in part  within  three (3)  years  after the date of his
               retirement, to the extent the option was otherwise exercisable at
               the  date  of his  retirement;  provided,  however,  that if such
               employee  remains a director or director  emeritus of the Holding
               Company,  the option  granted to him shall continue to vest while
               he serves as a director or director emeritus and may be exercised
               by him in whole or in part until the later of (a) three (3) years
               after the date of his  retirement,  or (b) six  months  after his
               service as a director or director emeritus of the Holding Company
               terminates.  (The term  "retirement"  as used  herein  means such
               termination  of employment  as shall  entitle such  individual to
               early or  normal  retirement  benefits  under  any then  existing
               pension  plan of the  Holding  Company  or a  Subsidiary.)  If an
               Optionee  (other  than  an  Outside  Director)  ceases  to  be an
               employee of the Holding Company and the Subsidiaries by reason of
               permanent  and  total  disability  (within  the  meaning  of  ss.
               22(e)(3) of the Code), any option granted to him may be exercised
               by him in whole or in part  within one (1) year after the date of
               his  termination  of  employment  by  reason  of such  disability
               whether or not the option was otherwise  exercisable  at the date
               of such  termination.  Options granted to Outside Directors shall
               cease to be  exercisable  six (6)  months  after  the  date  such
               Outside Director is no longer a director or director  emeritus of
               the Holding Company or its Subsidiaries for any reason other than
               death or  disability.  If an Optionee who is an Outside  Director
               ceases to be a director  or a director  emeritus  of the  Holding
               Company or its  Subsidiaries by reason of disability,  any option
               granted to him may be  exercised  in whole or in part  within one
               (1) year after the date the Optionee ceases to be a director or a
               director  emeritus by reason of such  disability,  whether or not
               the option was otherwise  exercisable  at such date. In the event
               of the death of an  Optionee  while in the employ or service as a
               director  or  director  emeritus  of  the  Holding  Company  or a
               Subsidiary,  or,  if the  Optionee  is not an  Outside  Director,
               within three (3) years after the date of his  retirement  (or, if
               later,  six  months  following  his  termination  of service as a
               director  or  director  emeritus  of the  Holding  Company or its
               Subsidiaries) or within one (1) year after the termination of his
               employment  by reason of permanent and total  disability  (within
               the meaning of ss. 22(e)(3) of the Code),  or, if the Optionee is
               an Outside Director,  within six (6) months after he is no longer
               a director  or director  emeritus  of the Holding  Company or its
               Subsidiaries for reasons other than disability or, within one (1)
               year  after  the   termination   of  his  service  by  reason  of
               disability,  any option  granted to him may be exercised in whole
               or in part at any time within one (1) year 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 the
               option term as fixed by the Committee,  whether or not the option
               was   otherwise   exercisable   at  the   date   of  his   death.
               Notwithstanding the foregoing  provisions of this subsection (e),
               no option shall in any event be exercisable  after the expiration
               of  the  period  fixed  by  the  Committee  in  accordance   with
               subsection (b) above.

          (f)  Nontransferability of Option. No option may be transferred by the
               Optionee  otherwise  than  by will or the  laws  of  descent  and
               distribution or pursuant to a qualified  domestic relations order
               as  defined  by the  Code or Title I of the  Employee  Retirement
               Income  Security  Act,  or the rules  thereunder,  and during the
               lifetime of the Optionee options shall be exercisable only by the
               Optionee or his guardian or legal representative.

          (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  in the employ or  service of the  Holding
               Company or its  Subsidiaries  or affect  any  rights the  Holding
               Company, a Subsidiary, or the shareholders of the Holding Company
               may have to terminate his service at any time.

          (h)  Maximum Incentive Stock Options.  The aggregate fair market value
               of stock with respect to which  incentive  stock options  (within
               the  meaning  of ss.  422A of the Code) are  exercisable  for the
               first time by an Optionee during any calendar year under the Plan
               or any other  plan of the  Holding  Company  or its  Subsidiaries
               shall not exceed  $100,000.  For this  purpose,  the fair  market
               value  of such  shares  shall  be  determined  as of the date the
               option is granted  and shall be  computed in such manner as shall
               be determined by the Committee,  consistent with the requirements
               of ss. 422A of the Code.

          (i)  Agreement. Each option shall be evidenced by an agreement between
               the Optionee and the Holding  Company which shall provide,  among
               other things,  that, with respect to incentive stock options, the
               Optionee  will advise the Holding  Company  immediately  upon any
               sale or  transfer  of the shares of Common  Stock  received  upon
               exercise of the option to the extent such sale or transfer  takes
               place  prior to the later of (a) two (2)  years  from the date of
               grant  or (b)  one (1)  year  from  the  date  of  exercise.  (j)
               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 shares of Common Stock
               purchased  upon the  exercise of the option shall be acquired for
               investment  and not with a view to, or for the sale in connection
               with, any distribution  thereof,  and 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  shares of Common
               Stock 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.

     6. Incentive Stock Options and Non-Qualified Stock Options. Options granted
under the Plan may be  incentive  stock  options  under ss.  422A of the Code or
non-qualified stock options, provided,  however, that Outside Directors shall be
granted only non-qualified stock options.  All options granted hereunder will be
clearly  identified as either  incentive  stock options or  non-qualified  stock
options.  In no event will the exercise of an incentive  stock option affect the
right to exercise any non-qualified  stock option, nor shall the exercise of any
non-qualified  stock  option  affect the right to exercise any  incentive  stock
option.  Nothing  in this  Plan  shall be  construed  to  prohibit  the grant of
incentive  stock  options and  non-qualified  stock  options to the same person,
provided,  further, that incentive stock options and non-qualified stock options
shall not be granted in a manner whereby the exercise of one non-qualified stock
option or incentive stock option affects the exercisability of the other.

     7.  Adjustment  of Shares.  In the event of any change after the  effective
date of the Plan in the  outstanding  stock of the Holding  Company by reason of
any reorganization,  recapitalization,  stock split, stock dividend, combination
of  shares,   exchange  of  shares,   merger  or   consolidation,   liquidation,
extraordinary distribution (consisting of cash, securities, or other assets), or
any other  change  after  the  effective  date of the Plan in the  nature of the
shares of stock of the Holding  Company,  the  Committee  shall  determine  what
changes, if any, are appropriate in the number and kind of shares reserved under
the  Plan,  and  the  Committee  shall  determine  what  changes,  if  any,  are
appropriate  in the option price under and the number and kind of shares covered
by  outstanding  options  granted  under  the  Plan.  Any  determination  of the
Committee hereunder shall be conclusive.

     8.  Change in  Control.  In the event of a Change in  Control,  all options
previously  granted and still  outstanding  under the Plan,  regardless of their
terms,  shall become  exercisable.  For this purpose,  "Change in Control" shall
mean a change in control of the  Holding  Company or Michigan  City,  within the
meaning of 12 C.F.R.  ss.574.4(a)  (other than a change resulting from a trustee
or other fiduciary holding shares of Common Stock under an employee benefit plan
of the Holding Company or any of its Subsidiaries).

     9. Tax Withholding. Whenever the Holding Company proposes or is required to
issue or transfer  shares of Common  Stock under the Plan,  the Holding  Company
shall have the right to require the Optionee or his or her legal  representative
to remit to the Holding  Company an amount  sufficient  to satisfy any  federal,
state and/or local  withholding  tax  requirements  prior to the delivery of any
certificate  or  certificates  for such  shares,  and  whenever  under  the Plan
payments  are to be  made in  cash,  such  payments  shall  be net of an  amount
sufficient  to  satisfy  any  federal,   state  and/or  local   withholding  tax
requirements.   If  permitted  by  the  Committee  and  pursuant  to  procedures
established  by the Committee,  an Optionee may make a written  election to have
shares of Common Stock having an aggregate  fair market value,  as determined by
the Committee,  consistent with the requirements of Treas.  Reg. ss.  20.2031-2,
sufficient to satisfy the applicable withholding taxes, withheld from the shares
otherwise to be received upon the exercise of a non-qualified option.

     10. Amendment. Subject to Section 14, the Board of Directors of the Holding
Company  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 the
approval  of the  holders  of at least a majority  of the shares of the  Holding
Company  voting  in  person  or  by  proxy  at a  duly  constituted  meeting  or
adjournment thereof:

          (a)  the number of shares of stock which may be reserved  for issuance
               under the Plan may not be increased except as provided in Section
               7 hereof;

          (b)  the period  during  which an option may be  exercised  may not be
               extended beyond ten (10) years and one day from the date on which
               such option was granted; and

          (c)  the class of persons  to whom  options  may be granted  under the
               Plan shall not be modified materially.

     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.

     11.  Termination.  The  Board  of  Directors  of the  Holding  Company  may
terminate the Plan at any time and no option shall be granted  thereafter.  Such
termination,  however,  shall not affect the validity of any option  theretofore
granted under the Plan. In any event,  no incentive  stock option may be granted
under the Plan after the date which is ten (10) years from the effective date of
the Plan.

     12. Successors.  This Plan shall be binding upon the successors and assigns
of the Holding Company.

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

     14.  Government  and Other  Regulations.  The  obligations  of the  Holding
Company 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  (including Office of Thrift and Supervision  regulations),  and
administrative  action.  In  particular,  grants of stock options under the Plan
shall comply with the  requirements of 12.  C.F.R.ss.  563b.3(g)(4)(vi),  to the
extent applicable to such grants.

     15.  Effective  Date.  The Plan shall  become  effective  on the date it is
approved  by the  holders  of at least a majority  of the shares of the  Holding
Company entitled to vote at a duly constituted  meeting or adjournment  thereof.
The options granted pursuant to the Plan may not be exercised until the Board of
Directors of the Holding  Company has been advised by counsel that such approval
has been obtained and all other applicable legal requirements have been met.