FIRST FEDERAL BANK, AFSB
                    DIRECTOR DEFERRED COMPENSATION AGREEMENT
              (AS AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 1997)

           THIS DIRECTOR  DEFERRED  COMPENSATION  AGREEMENT  (THE  "AGREEMENT"),
originally  effective  as of the 1st  day of  July,  1993,  and as  amended  and
restated  effective December 31, 1997 by and between FIRST FEDERAL BANK, AFSB, a
banking  corporation  organized and existing under the laws of the United States
(hereinafter  referred to as "Bank") and Ruth Mix Carnahan (hereinafter referred
to as "Director"), for the purpose of formalizing the agreement between the Bank
and the  Director in which the Director  defers  receipt of fees under the terms
and conditions described below.

                                   WITNESSETH:

           WHEREAS,  the  Director  serves  the Bank as a member of the Board of
Directors; and

           WHEREAS,   the  Bank  recognizes  the  valuable  services  heretofore
performed for it by the Director and wishes to encourage continued service; and

           WHEREAS,  the Bank values the efforts,  abilities and accomplishments
of the Director and recognizes that the Director's  services will  substantially
contribute to its continued growth and profits in the future; and

           WHEREAS, the Director wishes to defer a certain portion of fees to be
earned in the future; and

           WHEREAS,  the  parties  hereto  desire  to  formalize  the  terms and
conditions  upon  which the Bank  shall pay such  deferred  compensation  to the
Director and/or his designated beneficiary; and

           WHEREAS,  the Bank has adopted this  Director  Deferred  Compensation
Agreement  which  controls  all  issues  relating  to the  deferral  of  fees as
described herein;

           NOW,  THEREFORE,  in  consideration  of the  mutual  promises  herein
contained, the parties hereto agree to the following terms and conditions:

                                    SECTION I
                                   DEFINITIONS

           When used  herein,  the  following  words and phrases  shall have the
meanings below unless the context clearly indicates otherwise:

1.1        "Accrued  Benefit" means the sum of all deferred amounts and interest
           credited to the  Director's  Retirement  Account and due and owing to
           the Director or his Beneficiaries pursuant to this Agreement.

1.2        "Bank" means FIRST FEDERAL BANK, AFSB or any successor thereto.

1.3        "Beneficiary"  means the person,  persons  (and their heirs) or other
           entity  designated as  Beneficiary in writing to the Bank to whom the
           share of the deceased Director's Retirement Account is payable in the
           event of his death.  If no  Beneficiary  is so  designated,  then the
           Director's Spouse, if living, will be deemed the Beneficiary.  If the
           Director's  Spouse is not living,  then the Children of Director will
           be deemed the  Beneficiaries and will take on a per stirpes basis. If
           there are no living Children, then the Estate of the Director will be
           deemed the Beneficiary.

1.4        "Board" means the Board of Directors of the Bank.

1.5        "Children" means the Director's  children,  both natural and adopted,
           then  living at the time  payments  are due the  Children  under this
           Agreement.

1.6        "Deferral  Period"  means the  period in which  the  Director  has in
           effect a deferral  election;  provided,  however,  that the  Deferral
           Period shall automatically terminate on June 30, 1998 or, if earlier,
           on the date of the Director's Normal Retirement Date.

1.7        "Deferred  Compensation  Benefit"  means  that  benefit  which can be
           provided by annuitizing the Director's  Retirement Account balance as
           of the Valuation Date immediately  preceding the initial distribution
           date over a one hundred eighty (180) month period. A monthly interest
           factor of 1.075% shall be used to annuitize the account balance.

1.8        "Disability"  means the  determination  by a duly licensed  physician
           selected by the Bank that because of ill health, accident, disability
           or general inability because of age, that Director is no longer able,
           properly and satisfactorily, to perform his duties as a Director.

1.9        "Effective Date" shall be July 1, 1993.

1.10       "Estate"  means  the  Estate   (including,   when   applicable,   any
           irrevocable  trust  governing the transfer of non-probate  assets) of
           the Director.

1.11       "Guaranteed   Investment   Contract   Account"   means  book  entries
           maintained  by the Bank  reflecting  deferred  amounts with  interest
           being  credited  at the rate of .667% per month;  provided,  however,
           that the  existence  of such book  entries and the  existence  of the
           Guaranteed Investment Contract Account shall not create and shall not
           be deemed to create a trust of any kind,  or  fiduciary  relationship
           between the Bank and the  Director,  his  designated  Beneficiary  or
           Beneficiaries under this Agreement.

1.12       "Normal Retirement Date" means January 1, 1998.

1.13       "Payout  Period"  means  the time  frame in  which  certain  benefits
           payable  hereunder  shall be  distributed.  Payments shall be made in
           equal consecutive monthly installments commencing on the first day of
           the month  coincident  with or next  following the  occurrence of any
           event which triggers  distribution and continuing for a period of one
           hundred eighty (180) months.

1.14       "Phantom Unit Account"  means the total value of all units of phantom
           stock  purchased  by the  Director,  each having a value equal to the
           fair market value (as determined in the manner  provided  below) of a
           share of 1ST  BANCORP  common  stock.  The fair  market  value of the
           Director's  Phantom  Unit  Account  shall  be  determined  as of  the
           Valuation Date immediately preceding the date on which the Director's
           Retirement  Account is annuitized by converting  each phantom unit to
           an amount  equal to the  closing  bid price of 1ST  BANCORP's  common
           stock on such Valuation  Date.  The Director  shall purchase  phantom
           units at a price per share equal to eighty-five  percent (85%) of the
           fair market value (as  determined  above) of a share of 1ST BANCORP's
           common stock on the Valuation Date immediately preceding the calendar
           year quarter to which the deferral of fees and purchase relates.

           The  Director's  Phantom  Unit  Account  shall also be credited  with
           additional  phantom  units at each date on which 1ST BANCORP  makes a
           cash  dividend or an in kind  dividend  (other than its common stock)
           with respect to its shares.  The number of units to be credited shall
           be determined by dividing the amount of the cash dividend or the fair
           market value of any in kind  dividend by 85% of the fair market value
           (as determined above) of a share of 1ST BANCORP's common stock on the
           Valuation  Date  immediately  preceding  the calendar year quarter in
           which the  dividend  is paid with  respect  to 1ST  BANCORP's  common
           stock.

1.15       "Retirement  Account"  means  book  entries  maintained  by the  Bank
           reflecting  deferred  amounts and equal to the sum of the  Guaranteed
           Investment  Contract  Account  and  the  Phantom  Unit  Account.  The
           existence of such book entries and the  Retirement  Account shall not
           create  and shall  not be deemed to create a trust of any kind,  or a
           fiduciary  relationship  between  the  Bank  and  the  Director,  his
           designated Beneficiary, or other Beneficiaries under this Agreement.

1.16       "Spouse" means the individual to whom the Director is legally married
           at the time of the Director's death.

1.17       "Survivor's  Benefit" means monthly level payments to the Beneficiary
           in the  amount of Five  Hundred  Fifty-Nine  Dollars  ($559)  for one
           hundred eighty (180) months.  In the event the Survivor's  Benefit is
           less  than  the   Deferred   Compensation   Benefit,   the   Deferred
           Compensation benefit shall be paid in lieu of the Survivor's Benefit.
           In no  event  is it  intended  for the  Director  to  receive  both a
           Survivor's Benefit and Deferred Compensation Benefit.

1.18       "Valuation  Date"  means  the  last  business  day  of  March,  June,
           September, December beginning on and after June 30, 1993.


<PAGE>


                                   SECTION II
                              DEFERRED COMPENSATION

           Commencing on the Effective  Date, and continuing  through the end of
the Deferral  Period,  the  Director and the Bank agree that the Director  shall
defer  into  his  Retirement  Account  monthly  Director's  fees of Six  Hundred
($600.00)  Dollars that the Director would otherwise be entitled to receive from
the Bank for each month of the Deferral  Period.  The Director  shall direct the
apportionment of his monthly deferral between the Guaranteed Investment Contract
Account and the Phantom Unit Account.  Such  allocation  shall be in twenty-five
(25%) percent  increments  and shall be evidenced in writing by completion of an
Election Form (Exhibit B). If the Director fails to submit an Election Form, one
hundred  percent  (100%) of his  monthly  deferrals  shall be  allocated  to the
Guaranteed  Investment  Contract  Account.  The Director shall have the right to
change  such  apportionment  once per year for new  deferrals  and for  existing
bookkeeping  balances  held in his  Retirement  Account,  such  change  becoming
effective  at the next plan  anniversary  date  (January  1).  Any change in the
allocation  for  existing  balances  may be made in whole  dollar  amounts or in
twenty-five percent (25%) increments.  Any such change must also be evidenced in
writing to become effective.


<PAGE>




                                   SECTION III
                    TERMINATION OF ELECTION AND NEW ELECTIONS

           The  Director's  election  to defer  compensation  shall  continue in
effect,  pursuant to the terms of this  Agreement  unless and until the Director
files with the Bank a Notice of Discontinuance  (Exhibit C attached  hereto).  A
Notice of  Discontinuance  shall be effective if filed at least twenty (20) days
prior to any January  1st.  Such  Notice of  Discontinuance  shall be  effective
commencing  with  the  January  1st  following  its  filing.   If  the  Director
discontinues  his deferrals,  he may reinstate the deferrals as of a January 1st
by filing in writing an election to  recommence  deferrals  at least twenty (20)
days prior to the January 1st on which the deferrals are to recommence.

                                   SECTION IV
                               RETIREMENT BENEFIT

4.1        Retirement  Benefit.  At Normal  Retirement  Date, the Bank agrees to
           commence  payment of the Director's  Deferred  Compensation  Benefit.
           Such  payments  will be in  accordance  with the terms of the  Payout
           Period.

4.2        Disability  Retirement  Benefit.  Notwithstanding any other provision
           hereof,  the  Director  shall be  entitled  to receive  his  Deferred
           Compensation  Benefits  hereunder prior to his Normal Retirement Date
           in any case the Director  terminates  service due to Disability.  The
           benefit shall be distributed in accordance with the Payout Period. In
           the event the total  benefits  received by the  Director  pursuant to
           this Subsection are less than the total Survivor's Benefit [i.e., One
           Hundred  Thousand  Six  Hundred  Twenty  Dollars  ($100,620)],   upon
           Director's  death,  an  additional  lump sum payment shall be made to
           Director's  Beneficiary to make up the  difference  between these two
           (2) gross benefit amounts.

                                    SECTION V
                                 DEATH BENEFITS

5.1        Death Prior to Termination of Service. In the event of the Director's
           death prior to termination of service with the Bank, while covered by
           the provisions of this Agreement, the Director's Beneficiary shall be
           paid the Survivor's Benefit. Payments shall be in accordance with the
           Payout Period.

5.2        Death After  Termination  of Service.  In the event of the Director's
           death  after his  termination  of  service,  but prior to  commencing
           receipt of benefit  payments  under this  Agreement,  the  Director's
           Beneficiary  shall  be paid a  monthly  amount  for a  period  of one
           hundred  eighty (180) months,  commencing  within thirty (30) days of
           the  Director's  death.  The amount of such benefit  payment shall be
           determined as follows:

           (a)        If  the  Director  has  deferred  less  than  Twenty-Eight
                      Thousand Eight Hundred Dollars  ($28,800),  the Director's
                      Beneficiary  shall be paid a reduced  Survivor's  Benefit,
                      which shall be determined by  multiplying  the  Survivor's
                      Benefit  (Five  Hundred  Fifty-Nine  Dollars  ($559)) by a
                      fraction,  the  numerator  of which  shall be equal to the
                      total compensation  actually deferred by the Executive and
                      the  denominator  of which shall be equal to  Twenty-Eight
                      Thousand Eight Hundred Dollars ($28,800).

           (b)        If  death   occurs   after  the   Director   has  deferred
                      Twenty-Eight Thousand Eight Hundred Dollars ($28,800), his
                      Beneficiary shall be paid the Survivor's Benefit.

5.3        Death After Commencement of Benefits.  In the event of the Director's
           death after the  commencement of the Deferred  Compensation  Benefit,
           but  prior to the  completion  of all  such  payments  due and  owing
           hereunder,  the Bank shall  continue to make monthly  payments to the
           Director's  Beneficiary  until a total of one  hundred  eighty  (180)
           equal  monthly  payments  have been made to the  Director  and/or his
           Beneficiary.

5.4        Additional   Death  Benefit  Burial  Expense.   In  addition  to  the
           above-described  death  benefits,  upon  the  Director's  death,  the
           Director's  Beneficiary  shall be entitled to receive a one-time lump
           sum death benefit in the amount of Ten Thousand ($10,000.00) Dollars;
           provided,  however, that if the Director ceases to be a member of the
           Board  before  July 1,  1998 for  reasons  other  than  his  death or
           disability,  the one-time lump sum election  death benefit  otherwise
           provided in this Subsection shall not be payable.

                                                     SECTION VI
                                     CHANGES IN CAPITAL AND CORPORATE STRUCTURE

           In the event of any change in the outstanding  shares of common stock
of the Bank by reason of an issuance  of  additional  shares,  recapitalization,
reclassification,  reorganization, stock split, reverse stock split, combination
of  shares,   stock   dividend   or  similar   transaction,   the  Board   shall
proportionately  adjust, in an equitable manner,  the number of phantom units in
the  Director's  Phantom Unit  Account as well as the purchase  price of phantom
units. The foregoing  adjustments  shall be made in a manner that will cause the
relationship  between the cost and market value of each  phantom unit  purchased
hereunder to remain unchanged as a result of the applicable transaction.


<PAGE>




                                   SECTION VII
                             BENEFICIARY DESIGNATION

           The  Director  shall  have the  right,  at any  time,  to  submit  in
substantially  the form attached  hereto as Exhibit A, a written  designation of
primary and secondary  Beneficiaries  to whom payment under this Agreement shall
be made in the event of his death prior to complete distribution of the benefits
due and payable under the Agreement.  Each Beneficiary  designation shall become
effective only when receipt thereof is acknowledged in writing by the Bank.


<PAGE>


                                  SECTION VIII
                           DIRECTOR'S RIGHT TO ASSETS

           The rights of the  Director,  any  Beneficiary,  or any other  person
claiming through the Director under this Agreement,  shall be solely those of an
unsecured  general creditor of the Bank. The Director,  the Beneficiary,  or any
other person claiming through the Director, shall only have the right to receive
from the Bank those  payments as specified  under this  Agreement.  The Director
agrees that he, his Beneficiary,  or any other person claiming through him shall
have no rights or interests  whatsoever in any asset of the Bank,  including any
insurance  policies  or  contracts  which  the Bank may  possess  or  obtain  to
informally  fund this  Agreement.  Any  asset  used or  acquired  by the Bank in
connection with the  liabilities it has assumed under this Agreement,  except as
expressly  provided,  shall  not be  deemed  to be held  under any trust for the
benefit of the Director or his Beneficiaries,  nor shall any asset be considered
security for the  performance  of the  obligations  of the Bank.  Any such asset
shall be and remain, a general, unpledged, and unrestricted asset of the Bank.


<PAGE>


                                   SECTION IX
                            RESTRICTIONS UPON FUNDING

           The Bank shall have no  obligation  to set aside,  earmark or entrust
any fund or money with which to pay its obligations  under this  Agreement.  The
Director,  his  Beneficiaries  or any  successor in interest to him shall be and
remain simply a general unsecured creditor of the Bank in the same manner as any
other creditor having a general claim for matured and unpaid  compensation.  The
Bank  reserves  the absolute  right at its sole  discretion  to either  purchase
assets to meet its  obligations  undertaken by this Agreement or to refrain from
the  same  and to  determine  the  extent,  nature,  and  method  of such  asset
purchases.  Should the Bank  decide to purchase  assets such as life  insurance,
mutual funds,  disability policies or annuities,  the Bank reserves the absolute
right, in its sole discretion, to terminate such assets at any time, in whole or
in part.  At no time shall the  Director be deemed to have any lien,  nor right,
title or interest in or to any specific investment or to any assets of the Bank.
If the Bank elects to invest in a life  insurance,  disability or annuity policy
upon the life of the Director, then the Director shall assist the Bank by freely
submitting to a physical  examination and supplying such additional  information
necessary to obtain such insurance or annuities.



<PAGE>

                                    SECTION X
                     ALIENABILITY AND ASSIGNMENT PROHIBITION

           Neither the Director nor any  Beneficiary  under this Agreement shall
have any power or right to transfer, assign, anticipate,  hypothecate, mortgage,
commute,  modify or otherwise  encumber in advance any of the  benefits  payable
hereunder,  nor shall any of said benefits be subject to seizure for the payment
of any debts, judgments, alimony or separate maintenance owed by the Director or
his  Beneficiary,  nor be  transferable  by  operation  of law in the  event  of
bankruptcy, insolvency or otherwise.

                                   SECTION XI
                                 ACT PROVISIONS

11.1       Named  Fiduciary  and  Administrator.  The Bank  shall  be the  named
           fiduciary and administrator of this Agreement. As administrator,  the
           Bank  shall  be   responsible   for  the   management,   control  and
           administration   of  the  Agreement  as   established   herein.   The
           administrator   may  delegate  to  others  certain   aspects  of  the
           management  and  operational   responsibilities   of  the  Agreement,
           including  the   employment   of  advisors  and  the   delegation  of
           ministerial duties to qualified individuals.

11.2       Claims  Procedure and  Arbitration.  In the event that benefits under
           this Agreement are not paid to the Director (or to his Beneficiary in
           the case of the  Director's  death) and such  claimants feel they are
           entitled to receive such benefits,  then a written claim must be made
           to the Bank  within  sixty  (60)  days  from the  date  payments  are
           refused.  The Bank and its Board shall review the written  claim and,
           if the claim is denied,  in whole or in part,  they shall  provide in
           writing,  within  ninety  (90) days of receipt of such  claim,  their
           specific reasons for such denial, reference to the provisions of this
           Agreement upon which the denial is based, and any additional material
           or  information  necessary to perfect the claim.  Such written notice
           shall further  indicate the additional steps to be taken by claimants
           if a further review of the claim denial is desired.

           If claimants  desire a second  review,  they shall notify the Bank in
           writing  within sixty (60) days of the first claim denial.  Claimants
           may review the Agreement or any documents relating thereto and submit
           any written  issues and comments  they may feel  appropriate.  In its
           sole discretion,  the Bank,  through the disinterested  member of its
           Board,  shall  then  review the  second  claim and  provide a written
           decision  within  sixty  (60) days of  receipt  of such  claim.  This
           decision shall  likewise state the specific  reasons for the decision
           and shall include  reference to specific  provisions of the Agreement
           upon which the decision is based.

           If  claimants  continue  to dispute  the  benefit  denial  based upon
           completed  performance  of the Agreement or the meaning and effect of
           the terms and  conditions  thereof,  then  claimants  may  submit the
           dispute to a board of Arbitration for final  arbitration.  Said board
           shall  consist of one member  selected  by the  claimant,  one member
           selected by the Bank, and the third member  selected by the first two
           members.  The board of Arbitration  shall operate under any generally
           recognized  set of arbitration  rules.  The parties hereto agree that
           they  and  their  heirs,  personal  representatives,  successors  and
           assigns shall be bound by the decision of such arbitration board with
           respect   to   any   controversy   properly   submitted   to  it  for
           determination.

                                   SECTION XII
                                  MISCELLANEOUS

12.1       No Effect on  Directorship  Rights.  Nothing  contained  herein  will
           confer upon the  Director  the right to be retained in the service of
           the Bank nor limit the right of the Bank to  discharge  or  otherwise
           deal  with  the  Director  without  regard  to the  existence  of the
           Agreement.  Pursuant  to  12  C.F.R.  ss.  563.39(b),  the  following
           conditions shall apply to this Agreement:

           (1)        The Board may remove  the  Director  at any time,  but any
                      removal by the Board shall not  prejudice  the  Director's
                      vested right to  compensation  or other benefits under the
                      contract.

           (2)        If the Director 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
                      Federal  Deposit  Insurance Act (12 U.S.C.  1818(e)(3) and
                      (g)(1)) the Bank's obligations under the contract shall be
                      suspended as of the date of  termination of service unless
                      stayed by appropriate  proceedings.  If the charges in the
                      notice are  dismissed,  the Bank may in its discretion (i)
                      pay the Director all or part of the compensation  withheld
                      while its contract  obligations  were  suspended  and (ii)
                      reinstate  (in  whole or in part)  any of its  obligations
                      which were suspended.

           (3)        If the Director 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
                      Federal  Deposit  Insurance  Act (12 U.S.C.  1818(e)(4) or
                      (g)(1)),  all  obligations  of the Bank under the contract
                      shall terminate as of the effective date of the order, but
                      vested  rights  of the  contracting  parties  shall not be
                      affected.

           (4)        If the Bank is in default (as  defined in Section  3(x)(1)
                      of the Federal  Deposit  Insurance  Act), all  obligations
                      under  the  contract  shall  terminate  as of the  date of
                      default,  but this  paragraph  shall not affect any vested
                      rights of the contracting parties.

           (5)        All  non-vested  obligations  under the contract  shall be
                      terminated,   except  to  the   extent   determined   that
                      continuation   of  the  contract  is  necessary   for  the
                      continued operation of the Bank:

                      (i)        by the Director or his designee at the time the
                                 Federal  Deposit  Insurance  Corporation or the
                                 Resolution  Trust  Corporation  enters  into an
                                 agreement to provide assistance to or on behalf
                                 of the Bank under the  authority  contained  in
                                 ss. 13(c) of the Federal Deposit Insurance Act;
                                 or

                      (ii)       by the  Director or his  designee,  at the time
                                 the  Director  or  his   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 such action.

12.2       State Law. The Agreement is established  under, and will be construed
           according to, the laws of the State of Indiana.

12.3       Severability.  In  the  event  that  any of the  provisions  of  this
           Agreement or portion  thereof,  are held to be inoperative or invalid
           by any court of  competent  jurisdiction,  then:  (1)  insofar  as is
           reasonable,  effect  will be given to the  intent  manifested  in the
           provisions  held  invalid or  inoperative,  and (2) the  validity and
           enforceability  of the  remaining  provisions  will  not be  affected
           thereby.

12.4       Incapacity  of  Recipient.  In the event  the  Director  is  declared
           incompetent  and a conservator or other person  legally  charged with
           the care of his person or of his estate is  appointed,  any  benefits
           under the  Agreement to which such the Director is entitled  shall be
           paid to such  conservator  or other person  legally  charged with the
           care of his person or his estate.  Except as  provided  above in this
           paragraph,  when the Board, in its sole  discretion,  determines that
           the Director is unable to manage his financial affairs, the Board may
           direct the Bank to make  distributions  to any person for the benefit
           of the Director.

12.5       Recovery of Estate Taxes. If the Director's  gross estate for federal
           estate tax purposes  includes any amount  determined  by reference to
           and on account of this Deferred  Compensation  Agreement,  and if the
           Beneficiary is other than the Director's Estate,  then the Director's
           Estate  shall be entitled to recover from the  Beneficiary  receiving
           such benefit under the terms of the  Survivor's  Benefit an amount by
           which (x) the total estate tax due by Director's estate,  exceeds (y)
           the total  estate tax which  would have been  payable if the value of
           such benefit had not been included in the Director's gross Estate. If
           there is more than one person  receiving  such benefit,  the right of
           recovery  shall be  against  each such  person in  proportion  to the
           benefits  received by each such person.  In the event any Beneficiary
           has a liability hereunder, such Beneficiary may petition the Bank for
           a lump sum  payment  in an  amount  not to exceed  the  Beneficiary's
           liability hereunder.

12.6       Unclaimed  Benefit.  The Director shall keep the Bank informed of his
           current  address and the current  address of his  Beneficiaries.  The
           Bank  shall not be  obligated  to search for the  whereabouts  of any
           person.  If  within  three (3) years  after the  actual  death of the
           Director  the  Bank  is  unable  to  locate  any  Beneficiary  of the
           Director, then the Bank may fully discharge its obligation by payment
           to the Estate.

12.7       Limitations  on  Liability.  Notwithstanding  any  of  the  preceding
           provisions  of the  Agreement  and except for the benefits  otherwise
           payable under this  Agreement,  neither the Bank,  nor any individual
           acting as an  employee  or agent of the  Bank,  or as a member of the
           Board  shall be liable to the  Director  or any other  person for any
           claim,  loss,  liability or expense  incurred in connection  with the
           Agreement.

12.8       Gender. Whenever in this Agreement words are used in the masculine or
           neuter gender,  they shall be read and construed as in the masculine,
           feminine or neuter gender, whenever they should so apply.

12.9       Affect on Other Corporate  Benefit  Agreements.  Nothing contained in
           this Agreement  shall affect the right of the Director to participate
           in or be covered by any qualified or  non-qualified  pension,  profit
           sharing,  group, bonus or other  supplemental  compensation or fringe
           benefit  agreement  constituting  a part of the  Bank's  existing  or
           future compensation structure.

12.10      Suicide.  Notwithstanding anything to the contrary in this Agreement,
           the Survivor Benefits  otherwise provided herein shall not be payable
           if the Director's death results from suicide, whether sane or insane,
           within two (2) years after the  execution of this  Agreement.  If the
           Director dies during this two year period due to suicide, the balance
           of the Retirement  Account will be paid to the Director's  designated
           Beneficiary in a single payment.  Payment is to be made within thirty
           (30) days  after  the  Director's  death is  declared  a  suicide  by
           competent  legal  authority.  Credit  shall  be given to the Bank for
           payments made prior to determination of suicide.

12.11      Headings.  Headings and  sub-headings  in this Agreement are inserted
           for reference and convenience  only and shall not be deemed a part of
           this Agreement.

                                  SECTION XIII
                              AMENDMENT/REVOCATION

           This Agreement shall not be amended, modified or revoked at any time,
in whole or part,  without the mutual  written  consent of the  Director and the
Bank,  and such  mutual  consent  shall be required  even if the  Director is no
longer serving the Bank as a member of the Board.


<PAGE>

                                   SECTION XIV
                                    EXECUTION

14.1       This  Agreement  sets forth the entire  understanding  of the parties
           hereto with respect to the transactions  contemplated hereby, and any
           previous  agreements  or  understandings  between the parties  hereto
           regarding the subject matter hereof are merged into and superseded by
           this Agreement.

14.2       This  Agreement  shall be executed in duplicate,  each copy of which,
           when so executed and delivered, shall be an original, but both copies
           shall together constitute one and the same instrument.

           IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Agreement to be executed on this ____ day of ___________, 1997.


                                               /s/ Ruth Mix Carnahan
                                               Ruth Mix Carnahan



                                               FIRST FEDERAL BANK, AFSB



                                               By: Lynn Stenftenagel

                                               Executive Vice President
                                               (Title)




<PAGE>



                    DIRECTOR DEFERRED COMPENSATION AGREEMENT

                             BENEFICIARY DESIGNATION



           _________________________,  under  the  terms of a  certain  Director
Deferred Compensation Agreement by and between him and FIRST FEDERAL BANK, AFSB,
Vincennes,  Indiana,  dated  __________________,  19__,  hereby  designates  the
following Beneficiary to receive any guaranteed payments or death benefits under
such Agreement, following his death:


PRIMARY BENEFICIARY:

SECONDARY BENEFICIARY:


           This  Beneficiary  Designation  hereby revokes any prior  Beneficiary
Designation which may have been in effect.

           Such Beneficiary Designation is revocable.



DATE:                                       , 19




(WITNESS)                                                            , Director




(WITNESS)












                                    Exhibit A


<PAGE>



                    DIRECTOR DEFERRED COMPENSATION AGREEMENT
                                  ELECTION FORM



NAME:
           (Please Print)



Investment  Allocation  Election:  I hereby  elect to have my monthly  deferrals
credited with earnings or losses based on the following allocation:

(Indicate Percentage in Increments of 25% Only)

           Guaranteed Investment Contract Account                      _______ %

           Phantom Unit Account                                        _______ %

                    Total (Must Equal 100%)                            _______ %










DATE                                                                 , Director

















                                    Exhibit B


<PAGE>



                    DIRECTOR DEFERRED COMPENSATION AGREEMENT
                            NOTICE OF DISCONTINUANCE



TO:        FIRST FEDERAL BANK, AFSB
           Attention:


           I hereby give notice of my  election  to  discontinue  deferral of my
compensation under that certain Director Deferred Compensation Agreement, by and
between Bank and the undersigned,  dated the ____ day of __________,  199 . This
notice is  submitted at least twenty (20) days prior to January 1st and shall be
effective as of such date, as specified below.

           Discontinue deferral as of January 1, 19___.





                                                                      , Director




                                                              DATE







                                    Exhibit C