EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this
1st day of January, 2000, by and between Mutual Federal Savings Bank
(hereinafter referred to as the "Bank") and Timothy J. McArdle (the "Employee").

     WHEREAS, the Employee is currently serving as Senior Vice President,
Treasurer and Controller of the Bank; and

     WHEREAS, effective December 29, 1999, the Bank converted to capital stock
form as the subsidiary of a holding company (the "Holding Company"); and

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

     WHEREAS, the Board of Directors of the Bank has approved and authorized the
execution of this Agreement with the Employee to take effect as stated in
Section 2 hereof.

     NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:

     1. Definitions.

          (a) The term "Change in Control" means (1) an event of a nature that
     (i) results in a change in control of the Bank or the Company within the
     meaning of the Home Owners' Loan Act of 1933 and 12 C.F.R. Part 574 as in
     effect on the date hereof; or (ii) would be required to be reported in
     response to Item 1 of the current report on Form 8-K, as in effect on the
     date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act
     of 1934 (the "Exchange Act"); (2) any person (as the term is used in
     Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial
     owner (as defined in Rule 13d-3 under the Exchange Act), directly or
     indirectly of securities of the Bank or the Company representing 20% or
     more of the Bank's or the Company's outstanding securities; (3) individuals
     who are members of the board of directors of the Bank or the Company on the
     date hereof (the "Incumbent Board") cease for any reason to constitute at
     least a majority thereof, provided that any person becoming a director
     subsequent to the date hereof whose election was approved by a vote of at
     least three-quarters of the directors comprising the Incumbent Board, or
     whose nomination for election by the Company's stockholders was approved by
     the nominating committee serving under an Incumbent Board, shall be
     considered a member of the Incumbent Board; or (4) a reorganization,
     merger, consolidation, sale of all or substantially all of the assets of
     the Bank or the Company or a similar transaction in which the Bank or the
     Company is not the resulting entity. The term "Change in Control" shall not
     include an acquisition of securities by an employee benefit plan of the
     Bank or the Company. In the application of 12 C.F.R. Part 574 to a
     determination of a Change in Control, determinations to be made by the OTS
     or its Director under such regulations shall be made by the Board of
     Directors.

          (b) The term "Commencement Date" means January 1, 2000.


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          (c) The term "Date of Termination" means the date upon which the
     Employee ceases to serve as an employee of the Bank.

          (d) The term "Involuntarily Termination" means termination of the
     employment of Employee without the Employee's express written consent, and
     shall include a material diminution of or interference with the Employee's
     duties, responsibilities and benefits as Senior Vice President, Treasurer
     and Controller, including (without limitation) any of the following actions
     unless consented to in writing by the Employee: (1) a change in the
     principal workplace of the Employee to a location outside of a 30 mile
     radius from the Bank's headquarters office as of the date hereof; (2) a
     material demotion of the Employee; (3) a material reduction in the number
     or seniority of other Bank personnel reporting to the Employee or a
     material reduction in the frequency with which, or in the nature of the
     matters with respect to which, such personnel are to report to the
     Employee, other than as part of a Bank- or Company-wide reduction in staff;
     (4) a material adverse change in the Employee's salary, perquisites,
     benefits, contingent benefits or vacation, other than as part of an overall
     program applied uniformly and with equitable effect to all members of the
     senior management of the Bank or the Company; and (5) a material permanent
     increase in the required hours of work or the workload of the Employee. The
     term "Involuntary Termination" does not include Termination for Cause or
     termination of employment due to retirement, death, disability or
     suspension or temporary or permanent prohibition from participation in the
     conduct of the Bank's affairs under Section 8 of the Federal Deposit
     Insurance Act ("FDIA").

          (e) The terms "Termination for Cause" and "Terminated For Cause" mean
     termination of the employment of the Employee because of the Employee's
     personal dishonesty, incompetence, willful misconduct, breach of a
     fiduciary duty involving personal profit, intentional failure to perform
     stated duties, willful violation of any law, rule, or regulation (other
     than traffic violations or similar offenses) or final cease-and-desist
     order, or material breach of any provision of this Agreement. The Employee
     shall not be deemed to have been Terminated for Cause unless and until
     there shall have been delivered to the Employee a copy of a resolution,
     duly adopted by the affirmative vote of not less than a majority of the
     entire membership of the Board of Directors of the Bank at a meeting of the
     Board called and held for such purpose (after reasonable notice to the
     Employee and an opportunity for the Employee, together with the Employee's
     counsel, to be heard before the Board), stating that in the good faith
     opinion of the Board the Employee has engaged in conduct described in the
     preceding sentence and specifying the particulars thereof in detail.

     2. Term. The term of this Agreement shall be a period of three years
beginning on the Commencement Date, subject to earlier termination as provided
herein.

     3. Employment. The Employee is employed as Senior Vice President, Treasurer
and Controller of the Bank as of the Commencement Date. As such, the Employee
shall render administrative and management services as are customarily performed
by persons situated in similar executive capacities, and shall have such other
powers and duties of an officer of the Bank as the Board of Directors may
prescribe from time to time.


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     4. Compensation.

          (a) Salary. The Bank agrees to pay the Employee during the term of
     this Agreement, not less frequently than monthly, the salary established by
     the Board of Directors, which shall be at least $110,000 annually. The
     amount of the Employee's salary shall be reviewed by the Board of
     Directors, beginning not later than the first anniversary of the
     Commencement Date. Adjustments in salary or other compensation shall not
     limit or reduce any other obligation of the Bank under this Agreement. The
     Employee's salary in effect from time to time during the term of this
     Agreement shall not thereafter be reduced.

          (b) Discretionary Bonuses. The Employee shall be entitled to
     participate in an equitable manner with all other executive officers of the
     Bank in discretionary bonuses as authorized and declared by the Board of
     Directors to its executive employees. No other compensation provided for in
     this Agreement shall be deemed a substitute for the Employee's right to
     participate in such bonuses when and as declared by the Board of Directors.

          (c) Expenses. The Employee shall be entitled to receive prompt
     reimbursement for all reasonable expenses incurred by the Employee in
     performing services under this Agreement in accordance with the policies
     and procedures applicable to the executive officers of the Bank, provided
     that the Employee accounts for such expenses as required under such
     policies and procedures.

     5. Benefits.

          (a) Participation in Retirement and Employee Benefit Plans. The
     Employee shall be entitled to participate in all plans relating to pension,
     thrift, profit-sharing, group life and disability insurance, medical and
     dental coverage, education, cash bonuses, and other retirement or employee
     benefits or combinations thereof, in which the Bank's executive officers
     participate.

          (b) Fringe Benefits. The Employee shall be eligible to participate in,
     and receive benefits under, any fringe benefit plans which are or may
     become applicable to the Bank's executive officers.

     6. Vacations; Leave. The Employee shall be entitled to annual paid vacation
in accordance with the policies established by the Board of Directors for
executive employees and to voluntary leave of absence, with or without pay, from
time to time at such times and upon such conditions as the Board of Directors
may determine in its discretion.

     7. Termination of Employment.

          (a) Involuntary Termination. The Board of Directors may terminate the
     Employee's employment at any time, but, except in the case of Termination
     for Cause, termination of employment shall not prejudice the Employee's
     right to compensation or other benefits under this Agreement. In the event
     of Involuntary Termination other than in connection with or within twelve
     (12) months after a Change in Control, (1) the Bank shall pay to the
     Employee during the remaining

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     term of this Agreement, the Employee's salary at the rate in effect
     immediately prior to the Date of Termination, payable in such manner and at
     such times as such salary would have been payable to the Employee under
     Section 4 if the Employee had continued to be employed by the Bank, and (2)
     the Bank shall provide to the Employee during the remaining term of this
     Agreement substantially the same benefits as the Bank maintained for its
     executive officers immediately prior to the Date of Termination, including
     Bank-paid dependent medical and dental coverage.

          (b) Termination for Cause. In the event of Termination for Cause, the
     Bank shall pay the Employee the Employee's salary through the Date of
     Termination, and the Bank shall have no further obligation to the Employee
     under this Agreement.

          (c) Voluntary Termination. The Employee's employment may be
     voluntarily terminated by the Employee at any time upon 90 days written
     notice to the Bank or upon such shorter period as may be agreed upon
     between the Employee and the Board of. In the event of such voluntary
     termination, the Bank shall be obligated to continue to pay to the Employee
     the Employee's salary and benefits only through the Date of Termination, at
     the time such payments are due, and the Bank shall have no further
     obligation to the Employee under this Agreement.

          (d) Change in Control. In the event of Involuntary Termination in
     connection with or within 12 months after a Change in Control which occurs
     at any time while the Employee is employed under this Agreement, the Bank
     shall, subject to Section 8 of this Agreement, (1) pay to the Employee in a
     lump sum in cash within 25 business days after the Date of Termination an
     amount equal to 299% of the Employee's "base amount" as defined in Section
     280G of the Internal Revenue Code of 1986, as amended (the "Code"); and (2)
     provide to the Employee during the remaining term of this Agreement
     substantially the same health benefits as the Bank maintained for its
     executive officers immediately prior to the Change in Control.

          (e) Death; Disability. In the event of the death of the Employee while
     employed under this Agreement and prior to any termination of employment,
     the Employee's estate, or such person as the Employee may have previously
     designated in writing, shall be entitled to receive from the Bank the
     salary of the Employee through the last day of the calendar month in which
     the Employee died. If the Employee becomes disabled as defined in the
     Bank's then current disability plan, if any, or if the employee is
     otherwise unable to serve in his current capacity, this Agreement shall
     continue in full force and effect, except that the salary paid to the
     Employee shall be reduced by any disability insurance payments made to
     Employee on policies of insurance maintained by the Bank at its expense.

          (f) Temporary Suspension or Prohibition. If the Employee is suspended
     and/or temporarily prohibited from participating in the conduct of the
     Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the
     FDIA, 12 U.S.C. ss. 1818(e)(3) and (g)(1), the Bank's obligations under
     this Agreement shall be suspended as of the date of service, unless stayed
     by appropriate proceedings. If the charges in the notice are dismissed, the
     Bank may in its discretion (i) pay the Employee all or part of the
     compensation withheld while its obligations under this Agreement were
     suspended and (ii) reinstate in whole or in part any of its obligations
     which were suspended.

          (g) Permanent Suspension or Prohibition. If the Employee is removed
     and/or permanently prohibited from participating in the conduct of the
     Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the
     FDIA, 12 U.S.C. ss. 1818(e)(4) and (g)(1), all obligations of the Bank
     under this Agreement shall terminate as of the effective date of the order,
     but vested rights of the contracting parties shall not be affected.


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          (h) Default of the Bank. If the Bank is in default (as defined in
     Section 3(x)(1) of the FDIA), all obligations under this Agreement shall
     terminate as of the date of default, but this provision shall not affect
     any vested rights of the contracting parties.

          (i) Termination by Regulators. All obligations of the Bank under this
     Agreement shall be terminated, except to the extent determined that
     continuation of this Agreement is necessary for the continued operation of
     the Bank: (1) by the Director of the Office of Thrift Supervision (the
     "Director") or his or her designee, at the time the Federal Deposit
     Insurance Corporation enters into an agreement to provide assistance to or
     on behalf of the Bank under the authority contained in Section 13(c) of the
     FDIA; or (2) by the Director or his or her designee, at the time the
     Director or his or her designee approves a supervisory merger to resolve
     problems related to operation of the Bank or when the Bank is determined by
     the Director to be in an unsafe or unsound condition. Any rights of the
     parties that have already vested, however, shall not be affected by any
     such action.

     8. Certain Reduction of Payments by the Bank.

          (a) Notwithstanding any other provision of this Agreement, if payments
     under this Agreement, together with any other payments received or to be
     received by the Employee in connection with a Change in Control would cause
     any amount to be nondeductible for federal income tax purposes pursuant to
     Section 280G of the Code, then benefits under this Agreement shall be
     reduced (not less than zero) to the extent necessary so as to maximize
     payments to the Employee without causing any amount to become
     nondeductible. The Employee shall determine the allocation of such
     reduction among payments to the Employee.

          (b) Any payments made to the Employee pursuant to this Agreement, or
     otherwise, are subject to and conditioned upon their compliance with 12
     U.S.C. ss. 1828(k) and any regulations promulgated thereunder.

     9. No Mitigation. The Employee shall not be required to mitigate the amount
of any salary or other payment or benefit provided for in this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Agreement be reduced by any compensation earned by
the Employee as the result of employment by another employer, by retirement
benefits after the Date of Termination or otherwise.

     10. Attorneys Fees. In the event the Bank exercises its right of
Termination for Cause, but it is determined by a court of competent jurisdiction
or by an arbitrator pursuant to Section 17 that cause did not exist for such
termination, or if in any event it is determined by any such court or arbitrator
that the Bank has failed to make timely payment of any amounts owed to the
Employee under this Agreement, the Employee shall be entitled to reimbursement
for all reasonable costs, including attorneys' fees, incurred in challenging
such termination or collecting such amounts. Such reimbursement shall be in
addition to all rights to which the Employee is otherwise entitled under this
Agreement.

     11. No Assignments.

          (a) This Agreement is personal to each of the parties hereto, and no
     party may assign or delegate any of its rights or obligations hereunder
     without first obtaining the written consent of

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     the other party; provided, however, that the Bank shall require any
     successor or assign (whether direct or indirect, by purchase, merger,
     consolidation or otherwise) to all or substantially all of the business
     and/or assets of the Bank, by an assumption agreement in form and substance
     satisfactory to the Employee, to expressly assume and agree to perform this
     Agreement in the same manner and to the same extent that the Bank would be
     required to perform it if no such succession or assignment had taken place.
     Failure of the Bank to obtain such an assumption agreement prior to the
     effectiveness of any such succession or assignment shall be a breach of
     this Agreement and shall entitle the Employee to compensation from the Bank
     in the same amount and on the same terms as the compensation pursuant to
     Section 7(d) hereof. For purposes of implementing the provisions of this
     Section 11(a), the date on which any such succession becomes effective
     shall be deemed the Date of Termination.

          (b) This Agreement and all rights of the Employee hereunder shall
     inure to the benefit of and be enforceable by the Employee's personal and
     legal representatives, executors, administrators, successors, heirs,
     distributees, devisees and legatees. If the Employee should die while any
     amounts would still be payable to the Employee hereunder if the Employee
     had continued to live, all such amounts, unless otherwise provided herein,
     shall be paid in accordance with the terms of this Agreement to the
     Employee's devisee, legatee or other designee or if there is no such
     designee, to the Employee's estate.

     12. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, to the Bank at its home office,
to the attention of the Board of Directors with a copy to the Secretary, or, if
to the Employee, to such home or other address as the Employee has most recently
provided in writing to the Bank.

     13. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.

     14. Headings. The headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.

     15. 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.

     16. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Indiana.

     17. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration 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.


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

     THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.



Attest:                               MUTUAL FEDERAL SAVINGS BANK



-----------------------------         ------------------------------------
Secretary                             By: R. Donn Roberts
                                      Its: President and Chief Executive Officer



                                      Employee



                                      -------------------------------------
                                      Timothy J. McArdle


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