<PAGE>


                                                                    EXHIBIT 10.6

                                 JOHN ROSENTHAL
                              EMPLOYMENT AGREEMENT


         This Employment Agreement (this "Agreement") is made and entered into
as of the 1st day of October, 2002 (the "Effective Date"), by and between ST.
JOSEPH CAPITAL CORPORATION, a Delaware corporation (the "Employer"), and John
Rosenthal (the "Executive").

                                    RECITALS

         A. The Executive has been employed by the Employer as the President and
Chief Executive Officer of the Employer and of Employer's subsidiary Indiana
state bank St. Joseph Capital Bank (the "Bank") pursuant to that certain
employment agreement dated March 18, 1996 (the "Prior Agreement").

         B. The Employer wishes to continue to employ the Executive as an
officer of the Employer and the Bank for a specified term and the Executive is
willing to continue such employment upon the terms and conditions hereinafter
set forth.

         C. The Employer and the Executive wish to amend and restate the Prior
Agreement as set forth herein.

         NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter contained, it is covenanted and agreed by and between
the parties hereto as follows:

                                   AGREEMENTS

         1. POSITION AND DUTIES. The Employer hereby employs the Executive as
      the President and Chief Executive Officer of the Employer and of the Bank
      or in such other senior executive capacity as shall be mutually agreed
      between the Employer and the Executive. During the period of the
      Executive's employment hereunder, the Executive shall devote his best
      efforts and full business time, energy, skills and attention to the
      business and affairs of the Employer. The Executive's duties and authority
      shall consist of and include all duties and authority customarily
      performed and held by persons holding equivalent positions with business
      organizations similar in nature and size to the Employer, as such duties
      and authority are reasonably defined, modified and delegated from time to
      time by the Board of Directors of the Employer (the "Board"). The
      Executive shall have the powers necessary to perform the duties assigned
      to him and shall be provided such supporting services, staff, secretarial
      and other assistance, office space and accoutrements as shall be
      reasonably necessary and appropriate in the light of such assigned duties.

         2. COMPENSATION. As compensation for the services to be provided by the
      Executive hereunder, the Executive shall receive the following
      compensation, expense reimbursement and other benefits:

            (a) BASE COMPENSATION. Effective as of the Effective Date the
      Executive shall receive an aggregate annual minimum base salary at the
      rate of One Hundred and Sixty Thousand Dollars ($160,000) payable in
      installments in accordance with the regular payroll schedule of the
      Employer. Such base salary shall be subject to review annually commencing
      in 2003 and shall be increased to no less than One Hundred and
      Seventy-Five Thousand Dollars ($175,000) effective January 1, 2003 and no
      less than Two Hundred Thousand Dollars ($200,000) effective January 1,
      2004. Thereafter,


                                       1
<PAGE>


      such base salary shall be maintained or increased during the term hereof
      in accordance with the Employer's established management compensation
      policies and plans.

            (b) PERFORMANCE BONUS. The Executive shall receive an annual
      performance bonus, payable within sixty (60) days after the end of the
      fiscal year of the Employer. The amount, if any, shall be determined by
      the Human Resources Committee of the Board and shall generally be based on
      a combination of organization-wide and individual performance criteria.

            (c) AUTOMOBILE ALLOWANCE. The Executive shall receive an automobile
      allowance which shall provide a payment to the Executive, after required
      withholding, equal to Eight Hundred and Fifty Dollars ($850) per month.
      Such allowance shall be subject to review annually commencing in 2003 and
      shall be maintained or increased during the term hereof in accordance with
      the Employer's established management policies and plans, or Board
      decision. In addition to the automobile allowance described above, the
      Employer shall also include the Executive under its general corporate
      automobile insurance program and pay all expenses thereof.

            (d) CLUB MEMBERSHIP. The Executive shall be reimbursed for
      initiation fees and membership dues at the local country club of his
      choice.

            (e) REIMBURSEMENT OF EXPENSES. The Executive shall be reimbursed,
      upon submission of appropriate vouchers and supporting documentation, for
      all travel, entertainment and other out-of-pocket expenses reasonably and
      necessarily incurred by the Executive in the performance of his duties
      hereunder and shall be entitled to attend seminars, conferences and
      meetings relating to the business of the Employer consistent with the
      Employer's established policies in that regard.

            (f) OTHER BENEFITS. The Executive shall be entitled to all benefits
      specifically established for him and, when and to the extent he is
      eligible therefor, to participate in all plans and benefits generally
      accorded to senior executives of the Employer, including, but not limited
      to, pension, profit-sharing, supplemental retirement, incentive
      compensation, bonus, disability income, split-dollar life insurance, group
      life, medical and hospitalization insurance, and similar or comparable
      plans, and also to perquisites extended to similarly situated senior
      executives, provided, however, that such plans, benefits and perquisites
      shall be no less than those made available to all other employees of the
      Employer.

            (g) VACATIONS. The Executive shall be entitled to an annual vacation
      in accordance with the vacation policy of the Employer which vacation
      shall be taken at a time or times mutually agreeable to the Employer and
      the Executive; provided, however, that the Executive shall be entitled to
      at least twenty (20) days of paid vacation annually.

            (h) WITHHOLDING. The Employer shall be entitled to withhold from
      amounts payable to the Executive hereunder, any federal, state or local
      withholding or other taxes or charges which it is from time to time
      required to withhold. The Employer shall be entitled to rely upon the
      opinion of its legal counsel with regard to any question concerning the
      amount or requirement of any such withholding.

            (i) LIFE INSURANCE. The Executive shall have purchased on his behalf
      at the expense of the Employer Life Insurance on the Executive's life in
      an amount equal to Three Hundred Thousand Dollars ($300,000). The
      Executive shall be allowed to name, and change at his election, the
      beneficiary or beneficiaries of such life insurance.

         3. CONFIDENTIALITY AND LOYALTY. The Executive acknowledges that during
      the course of his employment he may produce and have access to material,
      records, data, trade secrets and information not generally available to
      the public (collectively, "Confidential Information") regarding the


                                       2
<PAGE>


      Employer and its subsidiaries and affiliates. Accordingly, during and
      subsequent to termination of this Agreement, the Executive shall hold in
      confidence and not directly or indirectly disclose, use, copy or make
      lists of any such Confidential Information, except to the extent that such
      information is or thereafter becomes lawfully available from public
      sources, or such disclosure is authorized in writing by the Employer,
      required by a law or any competent administrative agency or judicial
      authority, or otherwise as reasonably necessary or appropriate in
      connection with performance by the Executive of his duties hereunder. All
      records, files, documents and other materials or copies thereof relating
      to the Employer's business which the Executive shall prepare or use, shall
      be and remain the sole property of the Employer, shall not be removed from
      the Employer's premises without its written consent, and shall be promptly
      returned to the Employer upon termination of the Executive's employment
      hereunder. The Executive agrees to abide by the Employer's reasonable
      policies, as in effect from time to time, respecting avoidance of
      interests conflicting with those of the Employer.

         4. TERM AND TERMINATION.

         (a) TERM. The Executive's employment hereunder shall be for a
      continuous and self-renewing three (3) year term commencing as of the
      Effective Date, unless terminated by either party effective as of ninety
      (90) days after written notice to that effect is delivered to the other
      party.

         (b) PREMATURE TERMINATION.

               (i) In the event of the termination of this Agreement by the
            Employer for any reason prior to the last day of the then current
            term under subparagraph (a) of this Section 4, and for any reason
            other than a termination in accordance with the provisions of
            paragraph (d) of this Section 4, then notwithstanding any mitigation
            of damages by the Executive, the Employer shall pay the Executive
            the sum of three (3) times: (A) the Executive's then-current base
            salary, (B) a bonus amount equal to fifty percent (50%) of the
            Executive's then-current base salary, plus (C) the value of the
            contributions that would have been made or credited by the Employer
            under all employee retirement plans for the benefit of the Executive
            (based upon the aggregate contributions made or credited by the
            Employer under all employee retirement plans for the benefit of the
            Executive for the most recently ended fiscal year of the Employer).
            In addition, the Employer shall continue to provide coverage for the
            Executive under the health, life and disability insurance programs
            maintained by the Employer for three (3) years; provided, however,
            that the continued payment of these amounts by the Employer shall
            not offset or diminish any compensation or benefits accrued as of
            the date of termination.

               (ii) Payment to the Executive will be made on a monthly basis
            during the remaining term of this Agreement. At the election of the
            Employer, payments may be made in a lump sum. Such payments shall
            not be reduced in the event the Executive obtains other employment
            following the termination of employment by the Employer.

               (iii) If the Employer is not in compliance with its minimum
            capital requirements or if the payments required under subparagraph
            (i) above would cause the Employer's capital to be reduced below its
            minimum capital requirements, such payments shall be deferred until
            such time as the Employer is in capital compliance.

            c. CONSTRUCTIVE TERMINATION. If at any time during the term of this
      Agreement, except in connection with a termination pursuant to paragraph
      (d) of this Section 4, the Executive is Constructively Discharged (as
      hereinafter defined) then the Executive shall have the right, by written
      notice to the Employer within ninety (90) days of such Constructive
      Discharge, to terminate his services hereunder, effective as of thirty
      (30) days after such notice, and the Executive shall have no


                                       3
<PAGE>


      rights or obligations under this Agreement other than as provided in
      Section 5 hereof. The Executive shall in such event be entitled to a lump
      sum payment of compensation and benefits and continuation of the health,
      life and disability insurance as if such termination of his employment was
      pursuant to paragraph (b) of this Section 4.

             For purposes of this Agreement, the Executive shall be
"Constructively Discharged" upon the occurrence of any one of the following
events:

             (i) The Executive is not re-elected or is removed from the
           positions with the Employer set forth in Section 1 hereof, other than
           as a result of the Executive's election or appointment to positions
           of equal or superior scope and responsibility; or

             (ii) The Executive shall fail to be vested by the Employer with the
           powers, authority and support services of any of said offices; or

             (iii) The Employer shall notify the Executive that the employment
           term of the Executive will not be extended or further extended, as
           set forth in paragraph (a) of this Section 4; or

             (iv) The Employer changes the primary employment location of the
           Executive to a place that is more than fifty (50) miles from the
           primary employment location as of the Effective Date of this
           Agreement; or

             (v) The Employer otherwise commits a material breach of its
           obligations under this Agreement.

         (d) TERMINATION FOR CAUSE. This Agreement may be terminated for cause
      as hereinafter defined. "Cause" shall mean: (i) the Executive's death or
      his permanent disability, which shall mean the Executive's inability, as a
      result of physical or mental incapacity, substantially to perform his
      duties hereunder for a period of six (6) consecutive months; (ii) a
      material violation by the Executive of any applicable material law or
      regulation respecting the business of the Employer; (iii) the Executive
      being found guilty of a felony or an act of dishonesty in connection with
      the performance of his duties as an officer of the Employer, or which
      disqualifies the Executive from serving as an officer or director of the
      Employer; or (iv) the willful or negligent failure of the Executive to
      perform his duties hereunder in any material respect. The Executive shall
      be entitled to at least thirty (30) days' prior written notice of the
      Employer's intention to terminate his employment for any cause (except the
      Executive's death) specifying the grounds for such termination, a
      reasonable opportunity to cure any conduct or act, if curable, alleged as
      grounds for such termination, and a reasonable opportunity to present to
      the Board his position regarding any dispute relating to the existence of
      such cause.

         (e) TERMINATION UPON DEATH. In the event payments are due and owing
      under this Agreement at the death of the Executive, payment shall be made
      to such beneficiary as Executive may designate in writing, or failing such
      designation, to the executor of his estate, in full settlement and
      satisfaction of all claims and demands on behalf of the Executive. Such
      payments shall be in addition to any other death benefits of the Employer
      for the benefit of the Executive and in full settlement and satisfaction
      of all payments provided for in this Agreement.

         (f) TERMINATION UPON DISABILITY. The Employer may terminate the
      Executive's employment after the Executive is determined to be disabled
      under the current Employer program or by a physician engaged by the
      Employer. In the event of a dispute regarding the Executive's disability,
      each party shall choose a physician who together will choose a third
      physician to make a final determination. The Executive shall be entitled
      to the compensation and benefits provided for under this Agreement for any
      period during the term of this Agreement and prior to the establishment of
      the Executive's Disability


                                       4
<PAGE>


      during which the Executive is unable to work due to a physical or mental
      infirmity. Notwithstanding anything contained in this Agreement to the
      contrary, until the date specified in a notice of termination relating to
      the Executive's Disability, the Executive shall be entitled to return to
      his positions with the Employer as set forth in this Agreement in which
      event no Disability of the Executive will be deemed to have occurred.

         (g) TERMINATION UPON CHANGE OF CONTROL.

                  (i) In the event of a Change of Control (as defined below) of
             the Employer and the termination of the Executive's employment
             under either A or B below, the Executive shall be entitled to a
             lump sum payment of compensation and benefits and continuation of
             the health, life and disability insurance as of such termination of
             his employment was pursuant to paragraph (b) of this Section 4.
             Payments under this paragraph shall be subject to the limits of
             subparagraph (g)(iii) of this Section 4. The following shall
             constitute termination under this paragraph:

                     A.   The Executive terminates his employment under this
                          Agreement by a written notice to that effect delivered
                          to the Board within one (1) year after the Change of
                          Control.

                     B.   The Agreement is terminated by the Employer or its
                          successor within either the six (6) month period
                          immediately preceding the Change of Control or the one
                          (1) year period immediately following the Change of
                          Control.

                          (ii) For purposes of this paragraph, the term "Change
             of Control" shall mean the following:

                     A.   The consummation of the acquisition by any person (as
                          such term is defined in Section 13(d) or 14(d) of the
                          Securities Exchange Act of 1934, as amended (the "1934
                          Act")) of beneficial ownership (within the meaning of
                          Rule 13d-3 promulgated under the 1934 Act) of
                          thirty-three percent (33%) or more of the combined
                          voting power of the then outstanding voting
                          securities; or

                     B.   The individuals who, as of the date hereof, are
                          members of the Board cease for any reason to
                          constitute a majority of the Board, unless the
                          election, or nomination for election by the
                          stockholders, of any new director was approved by a
                          vote of a majority of the Board, and such new director
                          shall, for purposes of this Agreement, be considered
                          as a member of the Board; or

                     C.   Approval by stockholders of: (1) a merger or
                          consolidation if the stockholders immediately before
                          such merger or consolidation do not, as a result of
                          such merger or consolidation, own, directly or
                          indirectly, more than sixty-seven percent (67%) of the
                          combined voting power of the then outstanding voting
                          securities of the entity resulting from such merger or
                          consolidation in substantially the same proportion as
                          their ownership of the combined voting power of the
                          voting securities outstanding immediately before such
                          merger or consolidation; or (2) a complete liquidation
                          or dissolution or an agreement for the sale or other
                          disposition of all or substantially all of the assets
                          of the entity.

         Notwithstanding the foregoing, a Change of Control shall not be deemed
to occur solely because thirty-three percent (33%) or more of the combined
voting power of the then outstanding securities is


                                       5
<PAGE>


acquired by: (1) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained for employees of the entity; or (2) any
corporation which, immediately prior to such acquisition, is owned directly or
indirectly by the stockholders in the same proportion as their ownership of
stock immediately prior to such acquisition.

                          (iii) It is the intention of the Employer and the
             Executive that no portion of any payment under this Agreement, or
             payments to or for the benefit of the Executive under any other
             agreement or plan, be deemed to be an "Excess Parachute Payment" as
             defined in Section 280G of the Internal Revenue Code of 1986, as
             amended (the "Code"), or its successors. It is agreed that the
             present value of and payments to or for the benefit of the
             Executive in the nature of compensation, receipt of which is
             contingent on the Change of Control of the Employer, and to which
             Section 280G of the Code applies (in the aggregate "Total
             Payments") shall not exceed an amount equal to one dollar less than
             the maximum amount which the Employer may pay without loss of
             deduction under Section 280G(a) of the Code. Present value for
             purposes of this Agreement shall be calculated in accordance with
             Section 280G(d)(4) of the Code. Within ninety (90) days following
             the earlier of (A) the giving of the notice of termination or (B)
             the giving of notice by the Employer to the Executive of its belief
             that there is a payment or benefit due the Executive which will
             result in an excess parachute payment as defined in Section 280G of
             the Code, the Executive and the Employer, at the Employer's
             expense, shall obtain the opinion of such legal counsel and
             certified public accountants as the Executive may choose
             (notwithstanding the fact that such persons have acted or may also
             be acting as the legal counsel or certified public accountants for
             the Employer), which opinions need not be unqualified, which sets
             forth (A) the amount of the Base Period Income of the Executive,
             (B) the present value of Total Payments and (C) the amount and
             present value of any excess parachute payments. In the event that
             such opinions determine that there would be an excess parachute
             payment, the payment hereunder or any other payment determined by
             such counsel to be includable in Total Payments shall be modified,
             reduced or eliminated as specified by the Executive in writing
             delivered to the Employer within sixty (60) days of his receipt of
             such opinions or, if the Executive fails to so notify the Employer,
             then as the Employer shall reasonably determine, so that under the
             bases of calculation set forth in such opinions there will be no
             excess parachute payment. The provisions of this subparagraph,
             including the calculations, notices and opinions provided for
             herein shall be based upon the conclusive presumption that (A) the
             compensation and benefits provided for in Section 2 hereof and (B)
             any other compensation earned by the Executive pursuant to the
             Employer's compensation programs which would have been paid in any
             event, are reasonable compensation for services rendered, even
             though the timing of such payment is triggered by the Change of
             Control; provided, however, that in the event such legal counsel so
             requests in connection with the opinion required by this
             subparagraph, the Executive and the Employer shall obtain, at the
             Employer's expense, and the legal counsel may rely on in providing
             the opinion, the advice of a firm of recognized executive
             compensation consultants as to the reasonableness of any item of
             compensation to be received by the Executive. In the event that the
             provisions of Sections 280G and 4999 of the Code are repealed
             without succession, this subparagraph shall be of no further force
             or effect.

         (h) REGULATORY SUSPENSION AND TERMINATION.

                          (i) If the Executive is suspended from office and/or
             temporarily prohibited from participating in the conduct of the
             Employer's affairs by a notice served under Section 8(e)(3) (12
             U.S.C. Section 1818(e)(3)) or 8(g) (12 U.S.C. Section 1818(g)) of
             the Federal Deposit Insurance Act, as amended, the Employer's
             obligations under this contract shall be suspended as of the date
             of service, unless stayed by appropriate proceedings. If the
             charges in the notice are dismissed, the Employer may in its
             discretion (A) pay the Executive all or part of the compensation
             withheld


                                       6
<PAGE>


             while their contract obligations were suspended and (B) reinstate
             (in whole or in part) any of the obligations which were suspended.

                          (ii) If the Executive is removed and/or permanently
             prohibited from participating in the conduct of the Employer's
             affairs by an order issued under Section 8(e) (12 U.S.C. Section
             1818(e)) or 8(g) (12 U.S.C. Section 1818(g)) of the Federal Deposit
             Insurance Act, as amended, all obligations of the Employer under
             this contract shall terminate as of the effective date of the
             order, but vested rights of the contracting parties shall not be
             affected.

                          (iii) If the Employer is in default as defined in
             Section 3(x) (12 U.S.C. Section 1813(x)(1)) of the Federal Deposit
             Insurance Act, as amended, all obligations of the Employer under
             this contract shall terminate as of the date of default, but this
             paragraph shall not affect any vested rights of the contracting
             parties.

                          (iv) All obligations of the Employer under this
             contract shall be terminated, except to the extent determined that
             continuation of the contract is necessary for the continued
             operation of the institution by the Federal Deposit Insurance
             Corporation (the "FDIC"), at the time the FDIC enters into an
             agreement to provide assistance to or on behalf of the Employer
             under the authority contained in Section 13(c) (12 U.S.C. Section
             1823(c)) of the Federal Deposit Insurance Act, as amended, or when
             the Employer is determined by the FDIC to be in an unsafe or
             unsound condition. Any rights of the parties that have already
             vested, however, shall not be affected by such action.

         5. NON-COMPETITION COVENANT.

            (a) RESTRICTIVE COVENANT. The Employer and the Executive have
jointly reviewed the customer lists and operations of the Employer and have
agreed that the primary service area of the Employer's lending and deposit
taking functions in which the Employer has and will actively participate extends
separately to each area which encompasses a fifty (50) mile radius from the main
office of the Employer. Therefore, as an essential ingredient of and in
consideration of this Agreement and the payment of the amounts described in
Section 2, the Executive hereby agrees that, except with the express prior
written consent of the Employer, for a period of one (1) year after the
termination of the Executive's employment with the Employer (the "Restrictive
Period"), he will not directly or indirectly compete with the business of the
Employer, including, but not by way of limitation, by directly or indirectly
owning, managing, operating, controlling, financing, or by directly or
indirectly serving as an employee, officer or director of or consultant to, or
by soliciting or inducing, or attempting to solicit or induce, any employee or
agent of Employer to terminate employment with Employer and become employed by
any person, firm, partnership, corporation, trust or other entity which owns or
operates, a bank, savings and loan association, credit union or similar
financial institution (a "Financial Institution") within a fifty (50) mile
radius of the Employer's main office (the "Restrictive Covenant"). If the
Executive violates the Restrictive Covenant and the Employer brings legal action
for injunctive or other relief, the Employer shall not, as a result of the time
involved in obtaining such relief, be deprived of the benefit of the full period
of the Restrictive Covenant. Accordingly, the Restrictive Covenant shall be
deemed to have the duration specified in this Section 5(a) computed from the
date the relief is granted but reduced by the time between the period when the
Restrictive Period began to run and the date of the first violation of the
Restrictive Covenant by the Executive. In the event that a successor assumes and
agrees to perform this Agreement, this Restrictive Covenant shall continue to
apply only to the primary service area of the Employer as it existed immediately
before such assumption and shall not apply to any of the successor's other
offices. The foregoing Restrictive Covenant shall not prohibit the Executive
from owning directly or indirectly capital stock or similar securities which are
listed on a securities exchange or quoted on the National Association of
Securities Dealers Automated Quotation System which do not represent more than
five percent (5%) of the outstanding capital stock of any Financial Institution.


                                        7
<PAGE>


            (b) REMEDIES FOR BREACH OF RESTRICTIVE COVENANT. The Executive
acknowledges that the restrictions contained in Sections 3 and 5(a) of this
Agreement are reasonable and necessary for the protection of the legitimate
business interests of the Employer, that any violation of these restrictions
would cause substantial injury to the Employer and such interests, that the
Employer would not have entered into this Agreement with the Executive without
receiving the additional consideration offered by the Executive in binding
himself to these restrictions and that such restrictions were a material
inducement to the Employer to enter into this Agreement. In the event of any
violation or threatened violation of these restrictions, the Employer, in
addition to and not in limitation of, any other rights, remedies or damages
available to the Employer under this Agreement or otherwise at law or in equity,
shall be entitled to preliminary and permanent injunctive relief to prevent or
restrain any such violation by the Executive and any and all persons directly or
indirectly acting for or with him, as the case may be.

         6. INTERCORPORATE TRANSFERS. If the Executive shall be voluntarily
transferred to an affiliate of the Employer, such transfer shall not be deemed
to terminate or modify this Agreement and the employing corporation to which the
Executive shall have been transferred shall, for all purposes of this Agreement,
be construed as standing in the same place and stead as the Employer as of the
date of such transfer. For purposes hereof, an affiliate of the Employer shall
mean any corporation directly or indirectly controlling, controlled by, or under
common control with the Employer.

         7. INTEREST IN ASSETS. Neither the Executive nor his estate shall
acquire hereunder any rights in funds or assets of the Employer, otherwise than
by and through the actual payment of amounts payable hereunder; nor shall the
Executive or his estate have any power to transfer, assign, anticipate,
hypothecate or otherwise encumber in advance any of said payments; nor shall any
of such payments be subject to seizure for the payment of any debt, judgment,
alimony, separate maintenance or be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise of the Executive.

         8. INDEMNIFICATION.

            (a) The Employer shall provide the Executive (including his heirs,
personal representatives, executors and administrators) for the term of this
Agreement with coverage under a standard directors' and officers' liability
insurance policy at its expense.

            (b) In addition to the insurance coverage provided for in paragraph
(a) of this Section 8, the Employer shall hold harmless and indemnify the
Executive (and his heirs, executors and administrators) to the fullest extent
permitted under applicable law against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding in which he may be involved by reason of his having been an officer
of the Employer (whether or not he continues to be an officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not be limited to, judgments, court costs and attorneys' fees and
the cost of reasonable settlements.

            (c) In the event the Executive becomes a party, or is threatened to
be made a party, to any action, suit or proceeding for which the Employer has
agreed to provide insurance coverage or indemnification under this Section 8,
the Employer shall, to the full extent permitted under applicable law, advance
all expenses (including reasonable attorneys' fees), judgments, fines and
amounts paid in settlement (collectively "Expenses") incurred by the Executive
in connection with the investigation, defense, settlement, or appeal of any
threatened, pending or completed action, suit or proceeding, subject to receipt
by the Employer of a written undertaking from the Executive: (i) to reimburse
the Employer for all Expenses actually paid by the Employer to or on behalf of
the Executive in the event it shall be ultimately determined that the Executive
is not entitled to indemnification by the Employer for such Expenses; and (ii)
to assign to the Employer all rights of the Executive to indemnification, under
any policy of directors' and officers' liability insurance or otherwise, to the
extent of the amount of Expenses actually paid by the Employer to or on behalf
of the Executive.


                                        8
<PAGE>


         9. GENERAL PROVISIONS.

            (a) SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Executive, the Employer and his and its respective
personal representatives, successors and assigns, and any successor or assign of
the Employer shall be deemed the "Employer" hereunder. The Employer shall
require any successor to all or substantially all of the business and/or assets
of the Employer, whether directly or indirectly, by purchase, merger,
consolidation, acquisition of stock, or otherwise, by an agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the Employer
would be required to perform if no such succession had taken place.

            (b) ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire agreement between the parties respecting the subject matter hereof, and
supersedes all prior negotiations, undertakings, agreements and arrangements
with respect thereto, whether written or oral. Except as otherwise explicitly
provided herein, this Agreement may not be amended or modified except by written
agreement signed by the Executive and the Employer.

            (c) ENFORCEMENT AND GOVERNING LAW. The provisions of this Agreement
shall be regarded as divisible and separate; if any of said provisions should be
declared invalid or unenforceable by a court of competent jurisdiction, the
validity and enforceability of the remaining provisions shall not be affected
thereby. This Agreement shall be construed and the legal relations of the
parties hereto shall be determined in accordance with the laws of the State of
Indiana without reference to the law regarding conflicts of law.

            (d) ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators sitting in a location selected by
the Executive within twenty-five (25) miles from the location of the Employer,
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of his right to be paid through the date of termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.

            (e) LEGAL FEES. All reasonable legal fees paid or incurred by the
Executive pursuant to any dispute or question of interpretation relating to this
Agreement shall be paid or reimbursed by the Employer if the Executive is
successful on the merits pursuant to a legal judgment, arbitration or
settlement.

            (f) WAIVER. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party, shall be deemed a waiver of any
similar or dissimilar provisions or conditions at the same time or any prior or
subsequent time.

            (g) NOTICES. Notices pursuant to this Agreement shall be in writing
and shall be deemed given when received; and, if mailed, shall be mailed by
United States registered or certified mail, return receipt requested, postage
prepaid; and if to the Employer, addressed to the principal headquarters of the
Employer, attention: Chairman; or, if to the Executive, to the address set forth
below the Executive's signature on this Agreement, or to such other address as
the party to be notified shall have given to the other.


                                       9
<PAGE>


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


ST. JOSEPH CAPITAL CORPORATION                  JOHN ROSENTHAL

BY:  /s/ Arthur H. McElwee, Jr.                 /s/ John W. Rosenthal
         Arthur H McElwee, Jr.                  2426 Redfield Street
         Chairman, Human Resources Committee    Niles, Michigan  49120



                                       10