EMPLOYMENT AGREEMENT


         This Agreement, made and dated as of October 22, 2001 by and between
MFB Financial, a federal savings bank ("Employer"), and Thomas J. Flournoy, a
resident of St. Joseph County, Indiana ("Employee").

                                                 W I T N E S S E T H

         WHEREAS, Employee is hereby employed by Employer as its Vice President
and Chief Financial Officer, and is expected to make valuable contributions to
the profitability and financial strength of Employer;

         WHEREAS, Employer desires to encourage Employee to make valuable
contributions to Employer's business operations and not to seek or accept
employment elsewhere;

         WHEREAS, Employee desires to be assured of a secure minimum
compensation from Employer for his services over a defined term;

         WHEREAS, Employer desires to assure the continued services of Employee
on behalf of Employer on an objective and impartial basis and without
distraction or conflict of interest in the event of an attempt by any person to
obtain control of Employer or of MFB Corp., the Indiana corporation which owns
all of the issued and outstanding capital stock of Employer (the "Holding
Company");

         WHEREAS, Employer recognizes that when faced with a proposal for a
change of control of Employer or the Holding Company, Employee will have a
significant role in helping the Boards of Directors assess the options and
advising the Boards of Directors on what is in the best interests of Employer,
the Holding Company, and its shareholders, and it is necessary for Employee to
be able to provide this advice and counsel without being influenced by the
uncertainties of his own situation;

         WHEREAS, Employer desires to provide fair and reasonable benefits to
Employee on the terms and subject to the conditions set forth in this Agreement;

         WHEREAS, Employer desires reasonable protection of its confidential
business and customer information which it has developed over the years at
substantial expense and assurance that Employee will not compete with Employer
for a reasonable period of time after termination of his employment with
Employer, except as otherwise provided herein.

         NOW, THEREFORE, in consideration of these premises, the mutual
covenants and undertakings herein contained and the continued employment of
Employee by Employer as its Vice President and Chief Financial Officer, Employer
and Employee, each intending to be legally bound, covenant and agree as follows:



<PAGE>



                                        2

          1. Upon the terms and subject to the conditions set forth in this
Agreement, Employer employs Employee as Employer's Vice President and Chief
Financial Officer, and Employee accepts such employment.

          2. Employee agrees to serve as Employer's Vice President and Chief
Financial Officer and to perform such duties in that office as may reasonably be
assigned to him by Employer's Board of Directors; provided, however that such
duties shall be performed in or from the offices of Employer currently located
at Mishawaka, Indiana, and shall be of the same character as those previously
performed by Employee's predecessor and generally associated with the office
held by Employee. Employee shall not be required to be absent from the location
of the principal executive offices of Employer on travel status or otherwise
more than 45 days in any calendar year. Employer shall not, without the written
consent of Employee, relocate or transfer Employee to a location more than 30
miles from his principal residence. Although while employed by Employer,
Employee shall devote substantially all his business time and efforts to
Employer's business and shall not engage in any other related business, Employee
may use his discretion in fixing his hours and schedule of work consistent with
the proper discharge of his duties.

          3. The term of this Agreement shall begin _______ __, ____ (the
"Effective Date"), and shall end on the date which is three years following such
date; provided, however, that such term shall be extended for an additional
month on the first day of each month succeeding the Effective Date, so as to
continue to maintain a three-year term and shall continue to be so extended if
Employer's Board of Directors determines by resolution to extend this Agreement
prior to each anniversary of the Effective Date. If either party hereto gives
written notice to the other party not to extend this Agreement in any given
month or if the Board does not determine to extend the Agreement prior to each
anniversary of the Effective Date, no further extension shall occur and the term
of this Agreement shall end three years subsequent to the first day of the month
in which such notice not to extend is given or three years subsequent to the
anniversary as of which the Board does not elect to continue extending this
Agreement (such term, including any extension thereof shall herein be referred
to as the "Term"). Notwithstanding the foregoing, this Agreement shall
automatically terminate (and the Term of this Agreement shall thereupon end)
without notice when Employee attains 65 years of age.



<PAGE>



                                       11

          4. Employee shall receive an annual salary of $102,000 ("Base
Compensation") payable at regular intervals in accordance with Employer's normal
payroll practices now or hereafter in effect. Employer may consider and declare
from time to time increases in the salary it pays Employee and thereby increases
in his Base Compensation. Employer may also declare incentive bonuses from time
to time to be paid to Employee in addition to his annual salary. During the Term
of this Agreement, but only until such time as a Change of Control occurs,
Employer may also declare decreases in the salary it pays Employee if the
operating results of Employer are significantly less favorable than those for
the fiscal year ending September 30, 2001, and Employer makes similar decreases
in the salary it pays to other executive officers of Employer. In addition,
immediately following the first twelve months of the term of this Agreement,
Employer may make a one-time reduction in Employee's Base Compensation if
Employer chooses to substitute incentive compensation for a portion of the
Employee's previously established Base Compensation. After a Change in Control,
no such decreases in Base Compensation may be made, and Employer shall consider
and declare salary increases based upon the following standards:

         Inflation;

         Adjustments to the salaries of other senior management personnel; and

         Past performance of Employee and the contribution which Employee makes
         to the business and profits of Employer during the Term.

Any and all increases or decreases in Employee's salary pursuant to this section
shall cause the level of Base Compensation to be increased or decreased by the
amount of each such increase or decrease for purposes of this Agreement. The
increased or decreased level of Base Compensation as provided in this section
shall become the level of Base Compensation for the remainder of the Term of
this Agreement until there is a further increase or decrease in Base
Compensation as provided herein.

          5. So long as Employee is employed by Employer pursuant to this
Agreement and subject to any waiting period requirements in such plans, he shall
be included as a participant in all present and future employee benefit,
retirement, and compensation plans generally available to employees of Employer
(other than Employer's recognition and retention plan and trust), consistent
with his Base Compensation and his position as Vice President and Chief
Financial Officer of Employer, including, without limitation, Employer's or the
Holding Company's pension plan, stock option plan, employee stock ownership
plan, and hospitalization, major medical, disability, dental and group life
insurance plans, each of which Employer agrees to continue in effect on terms no
less favorable than those currently in effect as of the date hereof (as
permitted by law) during the Term of this Agreement unless prior to a Change of
Control the operating results of Employer are significantly less favorable than
those for the fiscal year ending September 30, 2001, and unless (either before
or after a Change of Control) changes in the accounting or tax treatment of such
plans would adversely affect Employer's operating results or financial condition
in a material way, and the Board of Directors of Employer or the Holding Company
concludes that modifications to such plans need to be made to avoid such adverse
effects.

          6. So long as Employee is employed by Employer pursuant to this
Agreement, Employee shall receive reimbursement from Employer for all reasonable
business expenses incurred in the course of his employment by Employer, upon
submission to Employer of written vouchers and statements for reimbursement.
Employee shall attend, at his discretion, those professional meetings,
conventions, and/or similar functions that he deems appropriate and useful for
purposes of keeping abreast of current developments in the industry and/or
promoting the interests of Employer. So long as Employee is employed by Employer
pursuant to the terms of this Agreement, Employer shall continue in effect
vacation policies applicable to Employee no less favorable from his point of
view than those written vacation policies in effect on the date hereof.



<PAGE>


          7. Subject to the respective continuing obligations of the parties,
including but not limited to those set forth in subsections 9(A), 9(B), 9(C) and
9(D) hereof, Employee's employment by Employer may be terminated prior to the
expiration of the Term of this Agreement as follows:

         (A)      Employer, by action of its Board of Directors and upon written
                  notice to Employee, may terminate Employee's employment with
                  Employer immediately for cause. For purposes of this
                  subsection 7(A), "cause" shall be defined as (i) personal
                  dishonesty, (ii) incompetence, (iii) willful misconduct, (iv)
                  breach of fiduciary duty involving personal profit, (v)
                  intentional failure to perform stated duties, (vi) willful
                  violation of any law, rule, or regulation (other than traffic
                  violations or similar offenses) or final cease-and-desist
                  order, or (vii) any material breach of any term, condition or
                  covenant of this Agreement.

         (B)      Employer, by action of its Board of Directors, may terminate
                  Employee's employment with Employer without cause at any time;
                  provided, however, that the "date of termination" for purposes
                  of determining benefits payable to Employee under subsection
                  8(B) hereof shall be the date which is 60 days after Employee
                  receives written notice of such termination.

         (C)      Employee,  by written notice to Employer,  may terminate his
                  employment with Employer  immediately for cause.  For
                  purposes of this subsection  7(B),  "cause" shall be defined
                  as (i) any action by Employer's Board of Directors to
                  remove the Employee as Vice President and Chief Financial
                  Officer of Employer,  except where the Employer's Board
                  of Directors  properly acts to remove  Employee from such
                  office for "cause" as defined in subsection 7(A) hereof,
                  (ii) any action by Employer's Board of Directors which
                  Employee reasonably believes materially limits,  increases,
                  or  modifies  Employee's  duties  and/or  authority  as Vice
                  President  and Chief  Financial  Officer of Employer
                  (including  his  authority,  subject to corporate  controls no
                  more  restrictive  than those in effect on the date
                  hereof,  to hire and  discharge  employees  who are not bona
                  fide  officers  of  Employer),  (iii) any  failure of
                  Employer  to  obtain  the  assumption  of the  obligation  to
                  perform  this  Agreement  by any  successor  or the
                  reaffirmation  of such obligation by Employer,  as
                  contemplated in section 20 hereof;  or (iv) any material
                  breach by Employer of a term, condition or covenant of this
                  Agreement.

         (D)      Employee,  upon sixty (60) days written  notice to Employer,
                  may terminate his employment  with Employer  without cause.



<PAGE>


         (E)      Employee's employment with Employer shall terminate in the
                  event of Employee's death or disability. For purposes hereof,
                  "disability" shall be defined as Employee's inability by
                  reason of illness or other physical or mental incapacity to
                  perform the duties required by his employment for any
                  consecutive One Hundred Eighty (180) day period, provided that
                  notice of any termination by Employer because of Employee's
                  "disability" shall have been given to Employee prior to the
                  full resumption by him of the performance of such duties.

          8.      In the event of termination of Employee's employment with
                  Employer pursuant to section 7 hereof, compensation shall
                  continue to be paid by Employer to Employee as follows:

         (A)      In the event of termination pursuant to subsection 7(A) or
                  7(D),  compensation provided for herein (including Base
                  Compensation)  shall continue to be paid,  and Employee  shall
                  continue to  participate in the employee  benefit,
                  incentive bonus, retirement,  and compensation plans and other
                  perquisites as provided in sections 5 and 6 hereof,
                  through the date of termination  specified in the notice of
                  termination.  Any benefits  payable under  insurance,
                  health,  retirement and bonus plans as a result of Employee's
                  participation in such plans through such date shall
                  be paid when due under those plans.  The date of termination
                  specified in any notice of  termination  pursuant to
                  Subsection  7(A) shall be no later than the last  business
                  day of the month in which such  notice is  provided to
                  Employee.



<PAGE>


         (B)      In the event of termination pursuant to subsection 7(B) or
                  7(C),  compensation provided for herein (including Base
                  Compensation)  shall continue to be paid,  and Employee  shall
                  continue to  participate in the employee  benefit,
                  incentive bonus, retirement,  and compensation plans and other
                  perquisites as provided in sections 5 and 6 hereof,
                  through the date of termination  specified in the notice of
                  termination.  Any benefits  payable under  insurance,
                  health,  retirement and bonus plans as a result of Employee's
                  participation in such plans through such date shall
                  be paid when due under those plans.  In addition,  Employee
                  shall be entitled to continue to receive from Employer
                  his Base  Compensation at the rate in effect at the time of
                  termination,  plus any incentive bonus he received for
                  the tax year  preceding the date of  termination  (1) for
                  three  additional  12-month  periods if the  termination
                  follows a Change of Control or (2) for the remaining  Term of
                  the Agreement if the  termination  does not follow a
                  Change of Control;  provided,  however,  that for any
                  termination of employee  pursuant to subsection 7(B) or 7(C)
                  during his first twelve months of  employment  not following a
                  Change of Control,  the maximum  amount  payable to
                  Employee under this paragraph shall be twelve months of his
                  Base  Compensation.  In addition,  during such period,
                  Employer  will  maintain in full force and effect for the
                  continued  benefit of Employee  each  employee  welfare
                  benefit plan and each employee pension benefit plan (as such
                  terms are defined in the Employee  Retirement  Income
                  Security Act of 1974, as amended) in which Employee was
                  entitled to participate  immediately  prior to the date of
                  his  termination,  unless an  essentially  equivalent  and no
                  less  favorable  benefit is provided by a subsequent
                  employer of  Employee.  If the terms of any employee  welfare
                  benefit  plan or employee  pension  benefit plan of
                  Employer or applicable laws do not permit continued
                  participation  by Employee,  Employer will arrange to provide
                  to  Employee a benefit  substantially  similar to, and no less
                  favorable  than,  the  benefit he was  entitled to
                  receive  under  such plan at the end of the period of
                  coverage.  For  purposes  of this  Agreement,  a "Change of
                  Control"  shall mean an acquisition  of "control" of the
                  Holding  Company or of Employer  within the meaning of 12
                  C.F.R.ss. 574.4(a)  (other than a change of control  resulting
                  from a trustee or other fiduciary holding shares of
                  Common Stock under an employee benefit plan of the Holding
                  Company or any of its subsidiaries).

         (C)      In the event of termination pursuant to subsection 7(E),
                  compensation provided for herein (including Base Compensation)
                  shall continue to be paid, and Employee shall continue to
                  participate in the employee benefit, incentive bonus,
                  retirement, and compensation plans and other perquisites as
                  provided in sections 5 and 6 hereof, (i) in the event of
                  Employee's death, through the date of death, or (ii) in the
                  event of Employee's disability, through the date of proper
                  notice of disability as required by subsection 7(D). Any
                  benefits payable under insurance, health, retirement and bonus
                  plans as a result of Employer's participation in such plans
                  through such date shall be paid when due under those plans.

         (D)      Employer  will  permit  Employee  or his  personal
                  representative(s)  or heirs,  during a period of three  months
                  following Employee's  termination of employment by Employer
                  for the reasons set forth in subsections 7(B) or 7(C),
                  if such  termination  follows a Change of Control,  to require
                  Employer,  upon written  request,  to purchase all
                  outstanding  stock  options  previously  granted to Employee
                  under any Holding  Company stock option plan then in
                  effect whether or not such options are then  exercisable or
                  have  terminated at a cash purchase price equal to the
                  amount by which the  aggregate  "fair market  value" of the
                  shares  subject to such options  exceeds the aggregate
                  option price for such shares.  For purposes of this Agreement,
                  the term "fair market value" shall mean the higher
                  of (1) the average of the  highest  asked  prices for Holding
                  Company  shares in the  over-the-counter  market as
                  reported  on the NASDAQ  system if the shares are traded on
                  such system for the 30 business  days  preceding  such
                  termination,  or (2) the  average  per share  price  actually
                  paid for the most  highly  priced 1% of the Holding
                  Company  shares  acquired in connection  with the Change of
                  Control of the Holding  Company by any person or group
                  acquiring such control.

          9. In order to induce Employer to enter into this Agreement, Employee
hereby agrees as follows:



<PAGE>


         (A)      While Employee is employed by Employer and for a period of
                  three years after  termination  of such  employment for
                  reasons other than those set forth in subsections  7(B) or
                  7(C) of this  Agreement,  Employee shall not divulge or
                  furnish any trade  secrets (as  defined in IND.  CODEss.
                  24-2-3-2)  of  Employer or any  confidential  information
                  acquired by him while employed by Employer concerning the
                  policies,  plans, procedures or customers of Employer to
                  any person, firm or corporation,  other than Employer or upon
                  its written request, or use any such trade secret or
                  confidential  information directly or indirectly for
                  Employee's own benefit or for the benefit of any person, firm
                  or corporation  other than Employer,  since such trade secrets
                  and  confidential  information are confidential and
                  shall at all times remain the property of Employer.

         (B)      For a period of three years after  termination  of Employee's
                  employment by Employer for reasons other than those
                  set forth in  subsections  7(B) or 7(C) of this  Agreement,
                  Employee  shall not  directly or  indirectly  provide
                  banking or bank-related  services to or solicit the banking or
                  bank-related  business of any customer of Employer
                  at the time of such provision of services or solicitation
                  which Employee served either alone or with others while
                  employed by Employer in any city,  town,  borough,  township,
                  village or other place in which Employee  performed
                  services  for Employer  during the last three years (or such
                  shorter  period) he was employed by it, or assist any
                  actual or potential  competitor  of Employer to provide
                  banking or  bank-related  services to or solicit any such
                  customer's banking or bank-related business in any such place.

         (C)      While Employee is employed by Employer and for a period of one
                  year after termination of Employee's employment by Employer
                  for reasons other than those set forth in subsections 7(B) or
                  7(C) of this Agreement, Employee shall not, directly or
                  indirectly, as principal, agent, or trustee, or through the
                  agency of any corporation, partnership, trade association,
                  agent or agency, engage in any banking or bank-related
                  business or venture which competes with the business of
                  Employer as conducted during Employee's employment by Employer
                  within St. Joseph County or within a radius of 25 miles of any
                  other office of Employer where Employee was employed for more
                  than six months in the three years next preceding termination.

         (D)      If Employee's employment by Employer is terminated for any
                  reason, Employee will turn over immediately thereafter to
                  Employer all business correspondence, letters, papers,
                  reports, customers' lists, financial statements, credit
                  reports or other confidential information or documents of
                  Employer or its affiliates in the possession or control of
                  Employee, all of which writings are and will continue to be
                  the sole and exclusive property of Employer or its affiliates.


If Employee's employment by Employer is terminated during the Term of this
Agreement for reasons set forth in subsections 7(B) or 7(C) of this Agreement,
Employee shall have no obligations to Employer with respect to noncompetition
under sections 9(A) through (C) hereof.



<PAGE>


         10. Any termination of Employee's employment with Employer as
contemplated by section 7 hereof, except in the circumstances of Employee's
death, shall be communicated by written "Notice of Termination" by the
terminating party to the other party hereto. Any "Notice of Termination"
pursuant to subsections 7(A), 7(C) or 7(E) shall indicate the specific
provisions of this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for such
termination.

         11. If Employee is suspended and/or temporarily prohibited from
participating in the conduct of Employer's affairs by a notice served under
section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss.
1818(e)(3) and (g)(1)), Employer'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, Employer shall (i) pay 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.

         12. If Employee is removed and/or permanently prohibited from
participating in the conduct of Employer's affairs by an order issued under
section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. ss.
1818(e)(4) or (g)(1)), all obligations of Employer under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
parties to the Agreement shall not be affected.

         13. If Employer is in default (as defined in section 3(x)(1) of the
Federal Deposit Insurance Act), all obligations under this Agreement shall
terminate as of the date of default, but this provision shall not affect any
vested rights of Employer or Employee.

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

         15. Anything in this Agreement to the contrary notwithstanding, in the
event that the Employer's independent public accountants determine that any
payment by the Employer to or for the benefit of the Employee, whether paid or
payable pursuant to the terms of this Agreement, would be non-deductible by the
Employer for federal income tax purposes because of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), then the amount payable to or for
the benefit of the Employee pursuant to this Agreement shall be reduced (but not
below zero) to the Reduced Amount. For purposes of this section 15, the "Reduced
Amount" shall be the amount which maximizes the amount payable without causing
the payment to be non-deductible by the Employer because of Section 280G of the
Code. Any payments made to Employee pursuant to this Agreement, or otherwise,
are subject to and conditional upon their compliance with 12 U.S.C. ss.1828(k)
and any regulations promulgated thereunder, to the extent applicable to such
payments.



<PAGE>


         16. If a dispute arises regarding the termination of Employee pursuant
to section 7 hereof or as to the interpretation or enforcement of this Agreement
said dispute shall be resolved by binding arbitration determined in accordance
with the rules of the American Arbitration Association and if Employee obtains a
final award in his favor or his claim is settled by Employer prior to the
rendering of an award by such arbitration, all reasonable legal fees and
expenses incurred by Employee in contesting or disputing any such termination or
seeking to obtain or enforce any right or benefit provided for in this Agreement
or otherwise pursuing his claim shall be paid by Employer, to the extent
permitted by law.

         17. Should Employee die after termination of his employment with
Employer while any amounts are payable to him hereunder, this Agreement shall
inure to the benefit of and be enforceable by Employee's executors,
administrators, heirs, distributees, devisees and legatees and all amounts
payable hereunder shall be paid in accordance with the terms of this Agreement
to Employee's devisee, legatee or other designee or, if there is no such
designee, to his estate.

         18. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

         If to Employee:   Thomas J. Flournoy
                                    51780 Windyridge Drive
                                    South Bend, IN  46628

         If to Employer:   MFB Financial
                                    121 South Church Street
                                    P.O. Box 528
                                    Mishawaka, Indiana  46546

or to such address as either party hereto may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.

         19. This Agreement supersedes and replaces any pre-existing employment
agreement between the Employer and the Employee. The validity, interpretation,
and performance of this Agreement shall be governed by the laws of the State of
Indiana, exist as otherwise required by mandatory operation of federal law.



<PAGE>


         20. Employer shall require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of Employer, by agreement in form and substance
satisfactory to Employee to expressly assume and agree to perform this Agreement
in the same manner and same extent that Employer would be required to perform it
if no such succession had taken place. Failure of Employer to obtain such
agreement prior to the effectiveness of any such succession shall be a material
intentional breach of this Agreement and shall entitle Employee to terminate his
employment with Employer pursuant to subsection 7(C) hereof. As used in this
Agreement, "Employer" shall mean Employer as herein before defined and any
successor to its business or assets as aforesaid.

         21. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Employee and Employer. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of dissimilar provisions or conditions at the same or any prior
subsequent time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement.

         22. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement which shall remain in full force and effect.

         23. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same agreement.

         24. This Agreement is personal in nature and neither party hereto
shall, without consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder except as provided in section 17 and section 20
above. Without limiting the foregoing, Employee's right to receive compensation
hereunder shall not be assignable or transferable, whether by pledge, creation
of a security interest or otherwise, other than a transfer by his will or by the
laws of descent or distribution as set forth in section 17 hereof, and in the
event of any attempted assignment or transfer contrary to this paragraph,
Employer shall have no liability to pay any amounts so attempted to be assigned
or transferred.

         25. If any of the provisions in this Agreement shall conflict with 12
C.F.R. ss. 563.39(b), as it may be amended from time to time, the requirements
of such regulation shall supersede any contrary provisions herein and shall
prevail.

         IN WITNESS WHEREOF, the parties have caused the Agreement to be
executed and delivered as of the day and year first above set forth.

                                  MFB FINANCIAL

              By:
                 --------------------------------------------------

              Name:
                   ------------------------------------------------

              Title:
                    -----------------------------------------------



<PAGE>


                                   "Employer"


                                                             Thomas J. Flournoy

                                   "Employee"

         The undersigned, MFB Corp., sole shareholder of Employer, agrees that
if it shall be determined for any reason that any obligation on the part of
Employer to continue to make any payments due under this Agreement to Employee
is unenforceable for any reason, MFB Corp. agrees to honor the terms of this
Agreement and continue to make any such payments due hereunder to Employee
pursuant to the terms of this Agreement.

                                    MFB CORP.

       By:
          --------------------------------------------------

       Name:
            ------------------------------------------------

       Title:
             -----------------------------------------------


INDS01   CVS   462737v2