EXHIBIT
      10.1

    


    NAMED
      EXECUTIVE OFFICER SALARY AND BONUS ARRANGEMENTS FOR
      2008



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    Exhibit
      10.1


    


    Named
      Executive Officer Salary and Bonus Arrangements for 2008

    


    Base
      Salaries

     

    The
      base
      salaries for 2008 for the executive officers (the “named executive officers”) of
MutualFirst
      Financial, Inc. (the “Company”) and Mutual Federal Savings Bank who will be
      named in the compensation table that will appear in the Company’s upcoming 2008
      annual meeting proxy statement are as follows:

     

    
      
        	
                Name
                  and Title

              	 	
                Base Salary

              	 
	 	 	 	 
	
                David
                  W. Heeter 

                President
                  and Chief Executive 

                Officer
                  of the Company

              	 	
                $

              	
                247,000

              	 
	 	 	 	 	 
	
                Patrick
                  C. Botts

                Executive
                  Vice President of 

                the
                  Company and President and 

                Chief
                  Operating Officer of the Bank

              	 	
                $

              	
                200,000

              	 
	 	 	 	 	 
	
                Timothy
                  J. McArdle 

                Chief
                  Financial Officer of 

                the
                  Company and the Bank

              	 	
                $

              	
                180,000

              	 
	 	 	 	 	 
	
                Steven
                  R. Campbell 

                Senior
                  Vice President of the Bank

              	 	
                $

              	
                166,000

              	 
	 	 	 	 	 
	
                Steven
                  C. Selby 

                Senior
                  Vice President of the Bank

              	 	
                $

              	
                155,500

              	 


      

    

    


    Description
      of 2008 Bonus Plan 

     

    The
      Company has established a new cash incentive bonus plan for 2008 for all
      officers and employees of the Company and Mutual Federal (the “2008 Bonus
      Plan”). The quarterly payments will be made if and to the extent the Company’s
      quarterly performance in 2008 exceeds baseline levels on certain key performance
      indicators (which will be the same for all officers and employees), including
      loan and deposit growth, net interest margin improvement, growth in non-interest
      income, the ratios of non-performing assets to total assets and net charge-offs
      to total assets, and management of general and administrative expenses. The
      key
      performance indicators for the potential additional annual incentive payments
      to
      officers will be net interest income after provision for loan losses,
      non-interest income and non-interest expense, each for the full 2008
      year.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      amounts of the quarterly and annual bonuses under the 2008 Bonus Plan, if
      earned, will be determined by multiplying the employee’s salary by the
      employee’s payout percentage. While the payout percentages will vary from
      employee to employee, they will increase proportionately for all officers and
      employees, if and to the extent the Company attains a performance level above
      the baseline performance threshold. Annual incentive payouts to officers will
      only be made if actual performance exceeds baseline performance levels.
      Depending on the extent to which (if at all) actual performance exceeds baseline
      performance levels, the aggregate amount payable pursuant to the quarterly
      bonus
      component and the annual bonus component will range from 30% to 42% of the
      amount by which actual pre-tax net income from operations for the quarter or
      year, as applicable, exceeds the baseline level.

     

    Additional
      information about the 2008 Bonus Plan is incorporated herein by reference from
      the Company’s definitive proxy statement for its Annual Meeting of Stockholders
      to be held in June 2008, except for information contained under the headings
      “Compensation Committee Report,” and “Report of the Audit/Compliance Committee,”
a copy of which will be filed not later than 120 days after the close of the
      fiscal year.