EMPLOYMENT CONTRACT

     THIS  CONTRACT  OF  EMPLOYMENT  (hereinafter  "Contract")  is  made in
Indianapolis, Indiana, to be dated October 2, 1998, by and between STANDARD
MANAGEMENT CORPORATION ( hereinafter "Company"), an Indiana corporation and
ROBERT  B.  NEAL (hereinafter "Executive") and terminates and releases  the
Company  and  Executive  from  the  prior  Employment  Contract  dated  and
effective October 2, 1995.

                                 RECITALS

     A.   Executive  is  expected  to  continue  pursuing  new  acquisition
          targets  to  add  to  the  profitability,  growth  and  financial
          strength of the Company.

     B.   The Company considers the continued services of the Executive  to
          be  in  the best interest of the Company and its shareholders and
          desires to  assure  the  continued  services  of the Executive on
          behalf of the Company.

     C.   Executive is willing to remain in the employ of the Company under
          the terms and conditions hereof.

     NOW  THEREFORE,  in  consideration of the mutual agreements  contained
herein, the parties to this Contract hereby agree as follows:

                                 AGREEMENT

     1.   EMPLOYMENT.      The  Employment  Contract  dated  and  effective
          October 2, 1995 is  terminated  effective  October  2, 1998.  The
          Company  hereby  agrees  to employ Executive as Vice Chairman  of
          Dixie National Life Insurance Company, a controlled subsidiary of
          Company.  Executive accepts  such  employment  and  agrees  to be
          subject  to the general supervision, orders, advice and direction
          of  the Chairman  of  the  Board  of  the  Company  in  a  manner
          consistent  with  the  Articles  of  Incorporation and By-Laws of
          Company.

     2.   TERMS  OF EMPLOYMENT AND COMPENSATION.      Executive's  term  of
          employment  (the  "Employment Term") hereunder shall start on the
          date first written  above  and  continue  until  such  employment
          terminates  pursuant  to Section 8 hereof.  In consideration  for
          providing  services  hereunder  Executive  shall  be  compensated
          through the salary and bonus provisions of Section 3.

     3.   SALARY AND BONUS.      Executive's  salary  shall be $100,000 per
          year.  In addition to salary, the Executive will  be  paid  a  1%
          annual  bonus based on the gross purchase price of an acquisition
          target (the  "Acquisition  Target").  The gross purchase price is
          defined as the total consideration  paid  in  any  combination of
          cash,  notes, stock or other property for an Acquisition  Target.
          The bonus  will be adjusted by deducting  the salary and expenses
          paid during  the  contract year to the Executive.  The bonus will
          be  paid  only  on  completed   transactions  introduced  by  the
          Executive to the Company.  Each new  Acquisition  Target  must be
          acknowledged in writing by the Company as qualifying for a  bonus
          and  will  qualify  for  a  bonus if the transaction is completed
          within  two (2) years from the  date  of  acknowledgment  of  the
          Acquisition Target.

     4.   SALARY GUARANTEE.     All salaries payable to the Executive under
          the Agreement  will  be guaranteed (the "Guaranteed Payments") as
          of the effective date  of  the  Agreement for the full Employment
          Term  of  the Agreement except for  terminations  for  violations
          found in Section 8 (b)(c) or (d) hereof.

          (a)  All  Guaranteed  Payments  described  in  this  Section  and
               payable  to  the Executive shall be payable to the Estate of
               Robert B. Neal  in  the  event  of  death  of the Executive.
               After  the  initial Employment Term of Guaranteed  Payments,
               any additional  one  year  extensions  made  pursuant to the
               terms  of  Section 8(a) will be guaranteed once  the  notice
               period for the  extension  of  termination  period  found in
               Section 8(a) has passed.

          (b)  In  the  event  of  any  mental disability which renders the
               Executive unable to fulfill his duties pursuant to Section 1
               of this Agreement, all Guaranteed  Payments shall be made to
               Robert B. Neal's spouse, his attorney  in fact, his personal
               representative,  his  guardian,  or  any other  such  person
               legally   specifically  listed,  to  whomever   is   legally
               authorized  to  receive  monetary  payments due and owing to
               Robert B. Neal.

     5.   FRINGE BENEFITS.     Continuing immediately  and  throughout  the
          Employment  Term,  Executive  shall be entitled to participate in
          the Company's corporate, medical  and disability insurance plans.
          Executive  shall  be  entitled  to  all   other  fringe  benefits
          generally  provided  for  salaried employees of  the  Company  as
          provided under such fringe  benefit  programs, including, without
          limitation, four weeks vacation per year.

     1.   AUTOMOBILE ALLOWANCE.     During the Employment  Term,  Executive
          shall  be  entitled  to  an  automobile  allowance of $500.00 per
          month.

     2.   REIMBURSEMENT  FOR EXPENSES.     The Company  shall,  during  the
          Employment Term,  reimburse  Executive for all reasonable travel,
          business entertainment and other  business  expenses  incurred by
          Executive  in  rendering  services  under  this  Contract.   Such
          reimbursement  shall be subject to compliance with the applicable
          policies and procedures established by the Company.

     3.   TERMINATION.     The Employment Term shall terminate on the first
          to occur of the following events:

          (a)  the first anniversary  of  the  date on which the Employment
               Term commenced; provided, however,  that  after  such  first
               anniversary, the Employment Term shall be extended each year
               thereafter  for  an additional one year period unless either
               party gives the other  written  notice  at least ninety (90)
               days before such anniversary date of its  intention  not  to
               renew the Contract.

          (b)  termination  by  the  Company for cause, upon written notice
               (specifying the particulars) to Executive from the Company's
               Board of Directors which cause shall be limited to:

               (i)  an act or acts which  in  the  judgment of the Board of
                    Directors,  constitute  the  failure   or   refusal  by
                    Executive  to comply with the material orders,  advice,
                    directions,  policies, standards and regulations of the
                    Company and its Board of Directors, as promulgated from
                    time to time, or with the provisions of this Contract;

               (ii) an act or acts  which,  in the judgment of the Board of
                    Directors, constitute fraud  or dishonesty by Executive
                    or which, in the judgment of the  Board  of  Directors,
                    result  in  or  tend  to  result in gain to or personal
                    enrichment of Executive at the Company's expense;

               (iii)any  felony conviction of Executive  or  material  tort
                    which is detrimental to the Company; or

               (iv) the continuous absence of Executive from his employment
                    without reasonable cause or explanation for a period of
                    30 days or more;

          (c)  the death of Executive;

          (d)  the 90{th}  day  after  notice from the Company to Executive
               that Executive is considered  to be permanently disabled due
               to  his  inability  to perform his  duties  or  fulfill  his
               responsibilities hereunder,  which  inability  existed for a
               period of 90 days or more before such notice; or

          (e)  the 10{th} day after Executive gives written notice  to  the
               Company terminating his employment by the Company.

     Upon termination of Executive's employment pursuant to Section 8(b) or
Section 8(e) hereof, Executive (or his estate) shall receive (i) any unpaid
salary  payments  with respect to periods prior to the date of termination,
and (ii) any termination,  disability  or  death  benefits  to  which he is
entitled up until such termination under any employee benefit plan  of  the
Company  which  is  in  effect  at  the  time  of  the  termination  of his
employment.

     4.   TRAVEL.     Executive shall not be required to move from Jackson,
          Mississippi,  as  a  condition of his continued employment of the
          Company.

     5.   TECHNICAL  INFORMATION.      Executive  agrees  that  during  the
          Employment Term  and for a period of one year thereafter, he will
          assign to the Company or its nominees all of his right, title and
          interest in and to  all  "Technical  Information" (as hereinafter
          defined) which he makes, develops or conceives,  either  alone or
          in  conjunction  with  others;  he  will disclose promptly to the
          Company all such Technical Information;  and  he  will  cooperate
          with  the  Company  in  its efforts to protect its or any of  its
          affiliates'  or  subsidiaries'   rights   of  ownership  in  such
          Technical Information.  For purposes of this Contract, "Technical
          Information" shall mean and include, but not  be  limited to, all
          software,    processes,   devices,   trademarks,   trade   names,
          copyrights, marketing  plans, improvements, and ideas relating to
          the  business  of  the Company,  or  any  of  its  affiliates  or
          subsidiaries, and all goodwill associated with any such item.

     6.   COVENANT  AGAINST  DISCLOSURE   OF   TECHNICAL  AND  CONFIDENTIAL
          INFORMATION. Executive agrees that while  he  is  employed by the
          Company  and  thereafter  he  shall  not, directly or indirectly,
          disclose or use to the detriment of the  Company,  of  any of its
          affiliates  or  subsidiaries,  or  for  the  benefit of any other
          person, corporation or other entity, any confidential information
          or trade secret (including, but not limited to,  the identity and
          needs of any customer of the Company, or any of its affiliates or
          subsidiaries, the method and techniques of any of the business of
          the  Company,  or  any  of  its  affiliates or subsidiaries,  the
          marketing, sales, costs and pricing  plans  and objectives of the
          Company, or any of its affiliates or subsidiaries,  the problems,
          developments, research records, and Technical Information) of the
          Company,  or any of its affiliates or subsidiaries.  Furthermore,
          Executive shall  deliver promptly to the Company upon termination
          of his employment, or at any time the Company may so request, all
          memoranda, notes,  records,  reports,  manuals, software, models,
          designs, and other documents and computer records (and all copies
          thereof) relating to the business of the  Company, and all of its
          affiliates   and   subsidiaries,  and  all  property   associated
          therewith, which he  may  then possess or have under his control.
          This  Contract supplements and  does  not  supersede  Executive's
          obligations  under  statute  or  the  common  law  to protect the
          Company's trade secrets and confidential information.

     7.   REMEDY.       Executive   acknowledges   that   the  restrictions
          contained in Sections 10 and 11 of this Contract  are  reasonable
          and that the legal remedies for breach of the covenants which are
          contained  Sections  10 and 11 of this Contract may be inadequate
          and, therefore, agrees  that,  in  the  event  of  any  actual or
          threatened breach of any such covenant, in addition to any  other
          right or remedy which the Company may have, the Company may:  (a)
          seek specific enforcement of any such covenant through injunction
          or  other  equitable  relief,  and  (b) recover from Executive an
          amount equal to (i) all sums paid by  the  Company  to  him after
          commencement  of  the  breach,  plus  (ii) all costs and expenses
          (including   attorneys'  fees)  incurred  by   the   Company   in
          enforcement of  the  covenant,  plus  (iii)  all other damages to
          which the Company may be legally entitled.

     8.   ENTIRE AGREEMENT.     This Contract contains the entire agreement
          of  the  parties relating to the employment of Executive  by  the
          Company, superseding  any  and  all  prior  such  agreements, and
          cannot  be  amended,  modified,  or  supplemented in any  respect
          except  by  subsequent  written agreement  entered  into  by  the
          parties.

     9.   BENEFIT.      Executive acknowledges  that  the  services  to  be
          rendered to him  are  unique and personal; accordingly, Executive
          may not assign any of his rights or delegate any of his duties or
          obligations under this  Contract.  The  rights and obligations of
          the Company under this Contract shall inure  to  the  benefit of,
          and  be  binding upon, the legal representatives, successors  and
          assigns of the Company.

     10.  NO WAIVER.     No failure on the part of either party at any time
          to require the performance by the other party of any term of this
          Contract shall be taken or held to be a waiver of such term or in
          any way affect  such  party's  right to enforce such term, and no
          waiver on the part of either party  of  any term of this Contract
          shall be taken or held to be a waiver of any other term hereof or
          the breach thereof.

     11.  SEVERABILITY.     The provisions of Section  10 through 12 hereof
          are  severable,  and  the invalidity or unenforceability  of  any
          particular provision of  Sections  10 through 12 shall not affect
          or  limit  the enforceability of the other  provisions.   If  any
          provision in  Sections 10 through 12 hereof is held unenforceable
          for any reason,  including  the  time period, geographic area, or
          scope of activity covered, then such  provision shall be enforced
          to whatever extent is reasonable and enforceable.

     12.  GOVERNING LAW.     This Contract shall  be governed and construed
          in accordance with the law of the State of  Indiana  (other  than
          the  provision  relating  to choice of law).  The Contract may be
          brought in any state or federal  court of record in Indianapolis,
          Indiana and the parties hereto waive  any  right  to question the
          jurisdiction of such court over their person or the  property  of
          such venue.

     13.  CAPTIONS.      The  captions in this Contract are for convenience
          and identification purposes  only,  and  not  an integral part of
          this Contract, and are not to be considered in the interpretation
          of any part hereof.

     14.  NOTICES.     All notices and other communications hereunder shall
          be in writing and shall be deemed to have been  duly  given if in
          writing  and  personally  delivered  to  the party to whom notice
          should  be  given  or  if sent by registered or  certified  mail,
          postage prepaid, addressed  to  the addresses set forth below, or
          to  such other addresses as shall  be  furnished  in  writing  by
          either party to the other:

          To Executive:
               Robert B. Neal
               5465 Saratoga Drive
               Jackson, Mississippi 39225

          To the Company:
               Dixie National Life Insurance Company
               9100 Keystone Crossing
               Indianapolis, Indiana 46240
               Attn: Ronald D. Hunter

          With a copy to:
               Stephen M. Coons, Esq.
               9100 Keystone Crossing
               Indianapolis, Indiana 46240
<PAGE>

     IN WITNESS  WHEREOF,  the  Company  has  caused  this  Contract  to be
executed  on  its  behalf  by its duly authorized officer and Executive has
hereunto set his hand as of the date and year first above written.

                         STANDARD MANAGEMENT CORPORATION



                         By:  /s/ Ronald D. Hunter
                              Ronald D. Hunter
                              Chairman, President & CEO


Attest:

By:  /s/ Stephen M. Coons
     Stephen M. Coons, Esq.
     Secretary




                         EXECUTIVE:

                              /s/ Robert B. Neal
                              Robert B. Neal


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