| 1. | ISO      Award.  The Company grants to the Option Holder an      Incentive Stock Option (the “ISO”) to purchase [Number] Shares at an      Exercise Price of $[Number] per      Share. |
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| 2. | Vesting      Dates:  The ISO shall vest as follows[, subject to      earlier vesting as provided in Section[s] 6 [and 7] and] subject to      forfeiture of the ISO as provided in Section6: |
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|         | ISO      for              |
|--------------|---------------------------|
| Vesting Date | Number of Shares  Vesting |

| 3. | Exercise:             The      Option Holder (or other person to whom the ISO has been validly      transferred) may exercise the ISO during the Exercise Period by giving      written notice to the Committee, care of the Secretary of the Company, in      the form required by the Committee (“Exercise Notice”).  The      Exercise Notice must specify the number of Shares to be      purchased.  The exercise date is the date the Exercise Notice is      received by the Company.  The Exercise Period commences on the      Vesting Date and expires at 5:00 p.m., Muncie, Indiana time, on the date      ten years [five years      for over 10% owners of Company on the Grant Date] after the Grant      Date, subject to earlier expiration in the event of a termination of      Service as provided in Section 6.  Any portion of the ISO not      exercised as of the close of business on the last day of the Exercise      Period shall be cancelled without consideration at that    time. |
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| 4. | Related      Awards: The      ISO [is      notrelated to      any other Award under the Plan.] or[is related      to a stock appreciation right granted on the Grant Date and designated SAR      No. ___.  The related      stock appreciation right does not receive the special tax treatment      afforded the ISO.  To the extent any portion of the related      stock appreciation right is exercised, the ISO shall terminate with      respect to the same number ofShares.] |
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| 5. | Transferability.  The      Option Holder may not sell, assign, transfer, pledge or otherwise encumber      any portion of the ISO, except: (i) in the event of the Option Holder’s      death, by will or by the laws of descent and distribution or pursuant to      the Option Holder’s prior designation of a Beneficiary in accordance with      the Plan to receive any portion of the ISO that may be exercised after the      Option Holder’s death; or (ii) pursuant to a Qualified Domestic Relations      Order. |
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| 6. | Termination of      Service.  If the Option Holder terminates Service for any      reason other than on account of the death or Disability of the Option      Holder, any portion of the ISO that has not vested as of the date of that      termination shall be forfeited to the Company, and the Exercise Period      shall expire three months after that termination of Service, except in the      case of a Termination for Cause, when it shall expire      immediately.  If the Option Holder’s Service terminates on      account of the Option Holder’s death or Disability[, the Vesting Date for      all portions of the ISO that have not vested or been forfeited shall be      accelerated to the date of that termination of Service, and] the Exercise      Period shall expire on the earlier of one year after that termination of      Service and the date ten years after the Grant Date [five years      for over 10% owners of Company on the Grant  Date]. |
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| 7. | [Effect      of Change in Control.  Upon a Change in Control, the      Vesting Date for any portion of the ISO that has not vested or been      forfeited shall be accelerated to the date of the earliest event      constituting a Change in Control.] |
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| 8. | Option      Holder’s Rights.  The ISO awarded hereby does not entitle      the Option Holder to any rights of a stockholder of the      Company. |
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| 9. | Delivery      of Shares to Option Holder.  Promptly after receipt of an      Exercise Notice and full payment of the Exercise Price for the Shares      being acquired, the Company shall take such action as is necessary to      cause the issuance of a stock certificate for such Shares or the issuance      of such Shares in uncertificated form to the Option Holder (or other      person validly exercising the ISO), registered in the name of the Option      Holder (or such other person), or, upon request, in the name of the Option      Holder (or such other person) and in the name of another person in such      form of joint ownership as requested by the Option Holder (or such other      person) pursuant to applicable state law.  The Company’s      obligation to deliver Shares purchased upon the exercise of the ISO may be      conditioned upon the receipt of a representation of investment intent from      the Option Holder (or other person validly exercising the ISO) in such      form as the Committee requires.  The Company shall not be      required to deliver any Shares purchased prior to: (a) the listing of      those Shares on the NASDAQ Stock Market or such other stock exchange or      automated quotation system on which Shares may then be listed or quoted;      or (b) the completion of any registration or qualification of those Shares      required under applicable law. |
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| 10. | Notice      of Sale of Shares.  The Option Holder (or other person      who received Shares from the exercise of the ISO) shall give written      notice to the Company promptly in the event of the sale or other      disposition of Shares received from the exercise of the ISO within either:      (a) two years from the Grant Date; or (b) one year from the exercise      date. |
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| 11. | Adjustments      in Shares.  In the event of any recapitalization, forward      or reverse stock split, reorganization, merger, consolidation, spin-off,      combination, exchange of Shares or other securities, stock dividend,      special or recurring dividend or distribution (whether in the form of      cash, securities or other property), liquidation, dissolution or other      similar corporate transaction or event, the Committee shall, in such      manner as it may deem equitable in order to prevent dilution or      enlargement of rights, adjust the number of Shares or class of securities      of the Company covered by the ISO and/or the Exercise Price of the      ISO.  The Option Holder agrees to execute any documents required      by the Committee in connection with an adjustment under this Section      11. |
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| 12. | Tax      Withholding.  The Company shall have the right to require      the Option Holder to pay to the Company the amount of any tax that the      Company is required to withhold with respect to the Shares acquired upon      exercise of the ISO, or in lieu thereof, to retain or sell without notice,      a sufficient number of Shares to cover the minimum amount required to be      withheld. |
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| 13. | Plan      and Committee Decisions are Controlling.  This Agreement,      the award of the ISO to the Option Holder and the issuance of Shares upon      the exercise of the ISO are subject in all respects to the provisions of      the Plan, which are controlling.  Capitalized terms herein not      defined in this Agreement shall have the meaning ascribed to them in the      Plan.  All decisions, determinations and interpretations by      Committee respecting the Plan, this Agreement, the award of the ISO or the      issuance of Shares upon the exercise of the ISO shall be binding and      conclusive upon the Option Holder, any Beneficiary of the Option Holder or      the legal representative thereof or any other person to whom the ISO is      transferred as permitted hereby. |
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| 14. | Option      Holder’s Service.  Nothing in this Agreement shall limit      the right of the Company or any of its Affiliates to terminate the Option      Holder’s service or employment as a director, advisory director, officer      or employee, or otherwise impose upon the Company or any of its Affiliates      any obligation to employ or accept the services or employment of the      Option Holder. |
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| 15. | Amendment.  The      Committee may waive any conditions of or rights of the Company or modify      or amend the terms of this Agreement; provided, however, that the      Committee may not amend, alter, suspend, discontinue or terminate any      provision of this Agreement if such action may adversely affect the Option      Holder without the Option Holder’s written consent.  [To the      extent permitted by applicable laws and regulations, the Committee shall      have the authority, in its sole discretion, to accelerate the vesting of      the ISO or remove any other restrictions imposed on the Option Holder with      respect to the ISO or the Shares that may be purchased thereunder,      whenever the Committee may determine that such action is appropriate by      reason of any unusual or nonrecurring events affecting the Company, any      Affiliate or their financial statements or any changes in applicable laws,      regulations or accountingprinciples.] |
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| 16. | Loss      of ISO Status.  If any portion of the ISO shall fail, for      any reason, to qualify for the special tax treatment afforded the ISO, it      shall be treated as a Non-Qualified Stock Option under the      Plan.  The Option Holder acknowledges that the ISO will lose      this special tax treatment if and to the extent that: (a) the Shares      acquired upon the exercise of the ISO are sold or disposed of within one      of the time periods described in Section 10; or (b) the ISO is transferred      pursuant to a Qualified Domestic Relations Order, as permitted under      Section 5. |
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| 17. | Option      Holder Acceptance.  The Option Holder shall signify      acceptance of the terms and conditions of this Agreement and acknowledge      receipt of a copy of the Plan by signing in the space provided below and      returning the signed copy to theCompany. |
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|   | MUTUALFIRST FINANCIAL,      INC.  |   |
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|   | ACCEPTED      BY OPTION HOLDER    |   |
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|   | (Print      Name)                 |   |
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|   | (Street      Address)             |   |
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|   | (City,      State & Zip Code) |   |

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