Document:

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

              THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this 
1st day of January  2004 by and between Mutual Federal Savings Bank (hereinafter referred to as the
"Bank"), MutualFirst Financial, Inc. (the "Company") and David W. Heeter (the "Employee").

              WHEREAS, the Employee is currently serving as Chief Executive Officer of the Bank and
President and Chief Executive Officer of the Company; and

              WHEREAS, the Board of Directors of the Bank believes it is in the best interests of the Bank
to enter into this Agreement with the Employee in order to assure continuity of management of the
Bank and to reinforce and encourage the continued attention and dedication of the Employee; and

              WHEREAS, the Board of Directors of the Company has approved and authorized the
execution of this Agreement for the purpose of the Company making the guarantee set forth in
Section 18; and

              WHEREAS, the Board of Directors of the Bank has approved and authorized the execution
of this Agreement with the Employee to take effect as stated in Section 2 hereof.

              NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein, it is AGREED as follows:

              1.              Definitions.

                            (a)              The term "Change in Control" means (1) an event of a nature that (i)
results in a change in control of the Bank or the Company within the meaning of the Home Owners'
Loan Act of 1933 and 12 C.F.R. Part 574 as in effect on the date hereof; or (ii) would be required
to be reported in response to Item I of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); (2)
any person (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly of
securities of the Bank or the Company representing 20% or more of the Bank's or the Company's
outstanding securities; (3) individuals who are members of the board of directors of the Bank or the
Company on the date hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the date hereof whose
election was approved by a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board, shall be considered a member of the
Incumbent Board; or (4) a reorganization, merger, consolidation, sale of all or substantially all of the
assets of the Bank or the Company or a similar transaction in which the Bank or the Company is not
the resulting entity. The term "Change in Control" shall not include an acquisition of securities by
an employee benefit plan of the Bank or the Company. In the application of 12 C.F.R. Part 574 to

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a determination of a Change in Control, determinations to be made by the OTS or its Director under
such regulations shall be made by the Board of Directors.

                            (b)              The term "Commencement Date" means January 1, 2004.

                            (c)              The term "Date of Termination" means the date upon which the Employee
ceases to serve as an employee of the Bank.

                            (d)              The term "Involuntarily Termination" means termination of the
employment of Employee without the Employee's express written consent, and shall include a
material diminution of or interference with the Employee's duties, responsibilities and benefits as
Chief Executive Officer of the Bank and President and Chief Executive Officer of the Company,
including (without limitation) any of the following actions unless consented to in writing by the
Employee: (1) a change in the principal workplace of the Employee to a location outside of a 30 mile
radius from the Bank's headquarters office as of the date hereof, (2) a material demotion of the
Employee; (3) a material reduction in the number or seniority of other Bank personnel reporting to
the Employee or a material reduction in the frequency with which, or in the nature of the matters
with respect to which, such personnel are to report to the Employee, other than as part of a Bank-
or Company-wide reduction in staff, (4) a material adverse change in the Employee's salary,
perquisites, benefits, contingent benefits or vacation, other than as part of an overall program applied
uniformly and with equitable effect to all members of the senior management of the Bank or the
Company; and (5) a material permanent increase in the required hours of work or the workload of
the Employee. The term "Involuntary Termination" does not include Termination for Cause or
termination of employment due to retirement, death, disability or suspension or temporary or
permanent prohibition from participation in the conduct of the Bank's affairs under Section 8 of the
Federal Deposit Insurance Act ("FDIA").

                            (e)              The terms "Termination for Cause" and "Terminated For Cause" mean
termination of the employment of the Employee because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material breach of any provision
of this Agreement. The Employee shall not be deemed to have been Terminated for Cause unless and
until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the
affirmative vote of not less than a majority of the entire membership of the Board of Directors of the
Bank at a meeting of the Board called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's counsel, to be heard
before the Board), stating that in the good faith opinion of the Board the Employee has engaged in
conduct described in the preceding sentence and specifying the particulars thereof in detail.

              2.              Term. The term of this Agreement shall be a period of three years beginning on the
Commencement Date, subject to earlier termination as provided herein. Beginning on the first
anniversary of the Commencement Date, and on each anniversary thereafter, the term of this

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Agreement shall be extended for a period of one year in addition to the then-remaining term,
provided that (1) the Bank has not given notice to the Employee in writing at least 90 days prior to
such anniversary that the term of this Agreement shall not be extended further; and (2) prior to such
anniversary, the Board of Directors of the Bank explicitly reviews and approves the extension.
Reference herein to the term of this Agreement shall refer to both such initial term and such extended
terms.

              3.              Employment. The Employee is employed as Chief Executive Officer of the Bank and
President and Chief Executive Officer of the Company as of the Commencement Date. As such, the
Employee shall render administrative and management services as are customarily performed by
persons situated in similar executive capacities, and shall have such other powers and duties of an
officer of the Bank and the Company as the Board of Directors may prescribe from time to time.

              4.              Compensation.

                            (a)              Salary. The Bank agrees to pay the Employee during the term of this
Agreement, not less frequently than monthly, the salary established by the Board of Directors, which
shall be at least $192,5000 annually.  The amount of the Employee's salary shall be reviewed by the
Board of Directors, beginning not later than the first anniversary of the commencement Date.
Adjustments in salary or other compensation shall not limit or reduce any other obligation of the
Bank or of the Company under this Agreement.  The Employee's salary in effect from time to time
during the term of this Agreement shall not thereafter be reduced.

                            (b)              Discretionary Bonuses. The Employee shall be entitled to participate in
an equitable manner with all other executive officers of the Bank in discretionary bonuses as
authorized and declared by the Board of Directors to its executive employees. No other
compensation provided for in this Agreement shall be deemed a substitute for the Employee's right
to participate in such bonuses when and as declared by the Board of Directors.

                            (c)              Expenses. The Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in performing services under
this Agreement in accordance with the policies and procedures applicable to the executive officers
of the Bank, provided that the Employee accounts for such expenses as required under such policies
and procedures.

              5.              Benefits.

                            (a)              Participation in Retirement and Employee Benefit Plans. The Employee
shall be entitled to participate in all plans relating to pension, thrift, profit-sharing, group life and
disability insurance, medical and dental coverage, education, cash bonuses, and other retirement or
employee benefits or combinations thereof, in which the Bank's executive officers participate.

                            (b)              Fringe Benefits. The Employee shall be eligible to participate in, and

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receive benefits under, any fringe benefit plans which are or may become applicable to the Bank's
executive officers, including, without limitation, the Company's Stock Option Plan and Management
Recognition Plan.

              6.              	Vacations; Leave. The Employee shall be entitled to annual paid vacation in
accordance with the policies established by the Board of Directors for executive employees and to
voluntary leave of absence, with or without pay, from time to time at such times and upon such
conditions as the Board of Directors may determine in its discretion.

              7.              	Termination of Employment.

                            (a)              Involuntary Termination. The Board of Directors may terminate the
Employee's employment at any time, but, except in the case of Termination for Cause, termination
of employment shall not prejudice the Employee's right to compensation or other benefits under this
Agreement. In the event of Involuntary Termination other than in connection with or within twelve
(12) months after a Change in Control, (1) the Bank shall pay to the Employee during the remaining
term of this Agreement, the Employee's salary at the rate in effect immediately prior to the Date of
Termination, payable in such manner and at such times as such salary would have been payable to
the Employee under Section 4 if the Employee had continued to be employed by the Bank, and (2)
the Bank shall provide to the Employee during the remaining term of this Agreement substantially
the same benefits as the Bank maintained for its executive officers immediately prior to the Date of
Termination, including Bank-paid dependent medical and dental coverage.

                            (b)              Termination for Cause. In the event of Termination for Cause, the Bank
shall pay the Employee the Employee's salary and benefits through the Date of Termination, and the
Bank shall have no further obligation to the Employee under this Agreement.

                            (c)              Voluntary Termination. The Employee's employment may be voluntarily
terminated by the Employee at any time upon 90 days written notice to the Bank or upon such shorter
period as may be agreed upon between the Employee and the Board of Directors. In the event of such
voluntary termination, the Bank shall be obligated to continue to pay to the Employee the
Employee's salary and benefits only through the Date of Termination, at the time such payments are
due, and the Bank shall have no further obligation to the Employee under this Agreement.

                            (d)              Change in Control. In the event of Involuntary Termination in connection
with or within 12 months after a Change in Control which occurs at any time while the Employee
is employed under this Agreement, the Bank shall, subject to Section 8 of this Agreement, (1) pay
to the Employee in a lump sum in cash within 25 business days after the Date of Termination an
amount equal to 299% of the Employee's "base amount" as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"); and (2) provide to the Employee during the
remaining term of this Agreement substantially the same health benefits as the Bank maintained for
its executive officers immediately prior to the Change in Control.

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                            (e)              Death;  Disability. In the event of the death of the Employee while
employed under this Agreement and prior to any termination of employment, the Employee's estate,
or such person as the Employee may have previously designated in writing, shall be entitled to
receive from the Bank the salary and benefits of the Employee through the last day of the calendar
month in which the Employee died. If the Employee becomes disabled as defined in the Bank's then
current disability plan, if any, or if the employee is otherwise unable to serve in his current capacity,
this Agreement shall continue in fall force and effect, except that the salary paid to the Employee
shall be reduced by any disability insurance payments made to Employee on policies of insurance
maintained by the Bank at its expense.

                            (f)              Temporary Suspension or Prohibition. If the Employee 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 FDIA, 12 U.S.C. § 1818(e)(3) and (g)(1), the Bank'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, the Bank may in its discretion
(i) pay the 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.

                            (g)              Permanent Suspension or Prohibition. If the Employee 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 FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the
Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of
the contracting parties shall not be affected.

                            (h)              Default of the Bank. If the Bank is in default (as defined in Section 3(x)(1)
of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but this
provision shall not affect any vested rights of the contracting parties.

                            (i)              Termination by Regulators. All obligations of the Bank under this
Agreement shall be terminated, except to the extent determined that continuation of this Agreement
is necessary for the continued operation of the Bank: (1) by the Director of the Office of Thrift
Supervision (the "Director") or his or her designee, at the time the Federal Deposit Insurance
Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of the FDIA; or (2) by the Director or his or her designee, at the
time the Director or his or her 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 any such action.

              8.              	Certain Reduction of Payments by the Bank.

                            (a)              Notwithstanding any other provision of this Agreement, if payments under

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this Agreement, together with any other payments received or to be received by the Employee in
connection with a Change in Control would cause any amount to be nondeductible for federal
income tax purposes pursuant to Section 280G of the Code, then benefits under this Agreement shall
be reduced (not less than zero) to the extent necessary so as to maximize payments to the Employee
without causing any amount to become nondeductible. The Employee shall determine the allocation
of such reduction among payments to the Employee.

                            (b)              Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k) and any
regulations promulgated thereunder.

              9.              	No Mitigation. The Employee shall not be required to mitigate the amount of any
salary or other payment or benefit provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced
by any compensation earned by the Employee as the result of employment by another employer, by
retirement benefits after the Date of Termination or otherwise.

              10.              	Attorneys Fees. In the event the Bank exercises its right of Termination for Cause,
but it is determined by a court of competent jurisdiction or by an arbitrator pursuant to Section 17
that cause did not exist for such termination, or if in any event it is determined by any such court or
arbitrator that the Bank has failed to make timely payment of any amounts owed to the Employee
under this Agreement, the Employee shall be entitled to reimbursement for all reasonable costs,
including attomeys'fees, incurred in challenging such termination or collecting such amounts. Such
reimbursement shall be in addition to all rights to which the Employee is otherwise entitled under
this Agreement.

              11.              No Assignments.

                            (a)              This Agreement is personal to each of the parties hereto, and no party may
assign or delegate any of its rights or obligations hereunder without first obtaining the written
consent of the other party; provided, however, that the Bank shall require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Bank, by an assumption agreement in form and substance
satisfactory to the Employee, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Bank would be required to perform it if no such succession
or assignment had taken place. Failure of the Bank to obtain such an assumption agreement prior to
the effectiveness of any such succession or assignment shall be a breach of this Agreement and shall
entitle the Employee to compensation from the Bank in the same amount and on the same terms as
the compensation pursuant to Section 7(d) hereof. For purposes of implementing the provisions of
this Section I I (a), the date on which any such succession becomes effective shall be deemed the
Date of Termination.

                            (b)              This Agreement and all rights of the Employee hereunder shall inure to

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the benefit of and be enforceable by the Employee's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die
while any amounts would still be payable to the Employee hereunder if the Employee had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Employee's devisee, legatee or other designee or if there is no such
designee, to the Employee's estate.

              12.              	Notice. For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and, shall be deemed to have been duly given when
personally delivered or sent by certified mail, return receipt requested, postage prepaid, to the Bank
or Company at its home office, to the attention of the Board of Directors with a copy to the
Secretary, or, if to the Employee, to such home or other address as the Employee has most recently
provided in writing to the Bank.

              13.              	Amendments. No amendments or additions to this Agreement shall be binding unless
in writing and signed by both parties, except as herein otherwise provided.

              14.              	Headings. The headings used in this Agreement are included solely for convenience
and shall not affect, or be used in connection with, the interpretation of this Agreement.

              15.              Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of the
other provisions hereof.

              16.              	Governing Law. This Agreement shall be governed by the laws of the United States
to the extent applicable and otherwise by the laws of the State of Indiana.

              17.              	Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any
court having jurisdiction.

              18.              Company Guarantee. The Company hereby guarantees the obligations of the Bank
to the Employee under the Employment Agreement. This guarantee shall be subject to the provisions
of 12 U.S.C. Section 1828(k) and regulations thereunder.

              19.              Supercedes Prior Agreements.  This Agreement supercedes any and all prior
employment agreements entered into by and between the Employee, the Bank or the Company.

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              IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.

              THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.

	Attest:

	 MUTUAL FEDERAL SAVINGS BANK
	
/s/ Rosalie Petro
Secretary	/s/ David W. Heeter

By: David W. Heeter
Its: Chief Executive Officer

	
Attest:	MUTUALFIRST FINANCIAL INC.
	
/s/ Rosalie Petro
Secretary	/s/ David W. Heeter

By: David W. Heeter
Its: Chief Executive Officer

		EMPLOYEE

							/s/ David W. Heeter

							David W. Heeter

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End.Untitled Document

Exhibit 10.8

NAC RE CORP.

1993 STOCK OPTION PLAN

1.   Purpose and Structure

            The purpose of this 1993 Stock Option Plan (the “1993 Plan”) is to encourage and enable certain officers of NAC Re Corp. (the “Company”) and/or its subsidiaries to acquire a proprietary interest in the Company through the ownership of common stock of the Company. Such ownership will provide such officers with a more direct stake in the future welfare of the Company and encourage them to remain with the Company or a subsidiary of the Company. It is also expected that the 1993 Plan will encourage qualified persons to seek and accept employment with the Company and/or its subsidiaries.

            Pursuant to the 1993 Plan, certain officers will be offered the opportunity to acquire common stock through the grant of stock options including both “non-qualified” stock options (“NQSOs”) and “incentive stock options” (which term, when used herein, shall have the meaning ascribed thereto by Section 422(b) of the Internal Revenue Code of 1986, as amended [the “Code”]) (“ISOs”). In addition, the 1993 Plan provides for the granting of stock appreciation rights (“SARs”). As used herein, the term “Options” means stock options (including both NQSOs and ISOs) and SARs.

2.   Administration of the 1993 Plan

            The 1993 Plan shall be administered by the Committee as described in Paragraph 3. In administering the 1993 Plan, the Committee may adopt rules and regulations for carrying out the 1993 Plan. Any interpretation and decision with regard to any question arising under the 1993 Plan made by the Committee shall be final and conclusive on all participants in the 1993 Plan (“Participants”) and all other employees of the Company or a Subsidiary. The Committee shall determine the officers to whom, and the time or times at which, grants shall be made, the number of Options to be included in the grants, and the number of Options which shall be granted as NQSOs, ISOs and SARs.

3.   Committee

            The “Committee” is the Compensation Committee which shall be appointed from time to time by the Board of Directors of the Company (the “Board”), and shall consist of not less than three members of the Board, each of whom shall be a “disinterested person” within the meaning set forth in the regulations promulgated under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). If a Committee is not established, the Board shall perform the duties and functions ascribed to the Committee.

No one shall be a participant in the 1993 Plan while serving as a member of the Committee or for one year thereafter.

            The Board may at any time and from time to time remove any member of the Committee, with or without cause, appoint additional members of the Committee and fill vacancies, however caused, in the Committee. A majority of the members of the Committee shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination of the Committee reduced to writing and signed by all of the members of the Committee shall be as effective as if it had been made at a meeting duly called and held.

4.   Shares of Stock Subject to the 1993 Plan

            Except
    as provided in Subparagraphs 7(i) and 7(j) and Paragraph 8, the number of
    shares that may be issued or transferred pursuant to the exercise of NQSOs
    or ISOs granted under the 1993 Plan plus the number of shares subject to
    SARs granted under the 1993 Plan shall not exceed 1,250,000 shares of the
    $.10 par value common stock of the Company as constituted on December 9,
    1992 (the “Common Stock”). Such shares may be authorized and unissued
    shares or previously issued shares acquired or to be acquired by the Company
    and held in treasury. Any shares subject to an Option, which, for any reason,
    expires or is terminated unexercised may again be subject to an Option right
    under the 1993 Plan. Notwithstanding any other provision of the 1993 Plan
    and any action of the Committee the aggregate Fair Market Value (determined
    at the time the ISO is granted) of the Common Stock with respect to which
    ISOs are exercisable for the first time by a participant during any calendar
    year (under all plans of the Company, any Parent and any Subsidiary which
    provide for granting ISOs) shall not exceed $100,000 or any other limit prescribed
    by the Code. If such limitation is exceeded, such excess shall be treated
    as NQSOs.

5.   Eligibility

            Options may be granted only to officers of the Company or a Subsidiary as selected by the Committee as being potential contributors to the successful operation of the Company or a Subsidiary.

6.   Granting of Options

            All ISOs granted pursuant to the 1993 Plan shall be granted no later than December 9, 2002. NQSOs and SARs may be granted at any time. The date of the grant of any Option shall be the date on which the Committee authorizes the grant of such Option. In no event shall the number of shares for which Options may be granted to any Participant under this or any other Company option plan exceed 10% of the total number of shares authorized to be optioned under such plans.

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            No NQSO or ISO shall be granted to any individual within two years following termination of his employment with a New York insurance company, or a foreign insurance company qualified to do business in New York, except with the Company or its subsidiary.

7.   Terms and Conditions of Options

            Options shall be evidenced by stock option agreements, which agreements need not be identical and shall contain in substance the following terms and conditions:

             (a)    Option Price.    The purchase price under each stock option shall be 100% of the Fair Market Value of the Common Stock at the time the stock option is granted, unless, in the case of NQSOs, otherwise determined by the Committee, but in no event less than the par value of such Common Stock. In the case of an ISO granted to a Participant owning more than 10% of the total combined voting power of all classes of stock of the Company, or of its Parent or any Subsidiary, actually or constructively under Section 424(d) of the Code (a “10% Shareholder”),
          the purchase price shall not be less than 110% of the fair market value of
      the Common Stock subject to the ISO at the time of its grant.

             (b)    SARs.    Upon
          exercise of an SAR, the holder thereof shall be entitled to receive
    from the Company consideration in an amount equal to the product of (i) the
    difference
          between the Fair Market Value of one share of Common Stock at the date
    of exercise and the Fair Market Value of one share of Common Stock on the
    date
          the SAR was granted, and (ii) the number of shares of Common Stock
    subject to the SAR, or that portion of the SAR, which is exercised. Upon
    the exercise of an SAR, the holder may specify the form of consideration
    to be paid
    to the holder, which shall be cash, Common Stock, or any combination thereof,
          provided, however, that the Committee, in its sole discretion, may
    decide
          that such consideration shall be paid in such combination of cash and
    Common Stock as the Committee shall decide. Stock option agreements with
    respect
          to SARs may provide that such SARs are automatically converted into
    NQSOs on the conversion date specified by the Committee at the time of grant.

            (c)    Exercise
            of Options and Medium and Time of Payment.    An
            Option may be exercised only by written notice of intent to exercise
            such Option with
            respect to a specified number of shares of the Common Stock and payment
            to the Company of the amount of the option price for the number of
            shares of
            the Common Stock in the case of an exercise of a stock option. Stock
            purchased pursuant to the exercise of a stock option shall at the
            time of purchase
            be paid for in full (i) in cash, (ii) with shares of Common Stock
            (including restricted stock) to be valued at the Fair Market Value
            thereof on the date
            of such exercise, (iii) by such other means which the Committee determines
            to be consistent with the purpose of the 1993 Plan and applicable
            law, or (iv) a combination of the foregoing. Upon receipt of the
            payment, the Company
        shall, without stock transfer tax to the participant or other

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person entitled to exercise the stock option, deliver to the person exercising such option a certificate or certificates for such shares. It shall be a condition to the performance of the Company’s obligation to issue or transfer Common Stock upon exercise of a stock option that the person exercising the stock option pay, or make provision satisfactory to the Company for the payment of, any taxes (other than stock transfer taxes) which the Company is obligated to collect with respect to the issue or transfer of Common Stock upon such exercise. The payment of such taxes may be made by written notice to the Company to reduce the number of shares that would otherwise be obtained upon the stock option exercise by a number of shares having a Fair Market Value on the date of exercise equal to the tax payment.

            The Committee may establish a program through which Participants can borrow funds with which to purchase stock pursuant to exercise of a stock option. Eligibility of any participant for such borrowing will be determined solely at the discretion of the Committee. Any such loan shall bear interest at a rate sufficient to avoid the imputation of interest under any section of the Code.

            (d)   Exercise Period.    No Option may be exercised after 10 years from the date it is granted. In the case of an ISO granted to a 10% Shareholder, such ISO, by its terms shall be exercisable only within five years from the date of grant. Options other than an ISO granted to a 10% Shareholder become exercisable in such installments and over such time period as the Committee shall determine at the time of grant; provided, however, that unless the Committee shall otherwise determine, Options shall become exercisable over the first six years after they are granted as follows: 20% of the Option shall become exercisable at the end of the second year following the date of grant; an additional 20% shall become exercisable at the end of the third year following the date of grant; an additional 20% shall become exercisable at the end of the fourth year following the date of grant; an
additional 20% shall become exercisable at the end of the fifth year following the date of grant; and the remaining 20% shall become exercisable at the end of the sixth year following the date of grant. Notwithstanding the prior sentence, the Committee may issue Options with a more accelerated maturity schedule (but in no event may Options be exercisable within 6 months of the date of grant), if the Committee believes it will be in the best interests of the Company. Further, the right to exercise an Option may be earlier terminated as provided in Subparagraphs 7(g) 

and 7(j).

            (e)   Rights as a Stockholder.    No holder of any Option shall have rights as a stockholder with respect to any shares issuable or transferable upon exercise thereof until the date a stock certificate is issued for such shares. Except as otherwise expressly provided in the 1993 Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.

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            (f)   Non-Assignability of Options.    No Option shall be assignable or transferable by the Participant except by will or by the laws of descent and distribution. During the lifetime of a Participant, Options shall be exercisable only by the Participant.

            (g)   Effect
      of Termination of Employment or Death.    No Option
      shall be exercisable after termination of employment with the Company or
      a Subsidiary, except as provided in this subparagraph. Notwithstanding
      the provisions contained herein, in no event shall an Option be exercisable
      after 10 years from the date it is granted (or, in the case of an ISO granted
      to a 10% Shareholder, after 5 years from the date it is granted). Options
      shall not be affected by any change of employment so long as the Participant
      continues to be employed by either the Company or a Subsidiary.

            In the event of the retirement of a Participant, or due to death or disability of the Participant (“Retirement”), NQSOs and/or SARs or unexercised portions thereof which were otherwise exercisable on the date of Retirement shall expire unless exercised within five years after the date of Retirement.

            In
the event of the discharge or resignation of a Participant ("Termination”), Options or unexercised portions thereof which were otherwise exercisable on the date of Termination shall expire unless exercised within a period of three months after the date of Termination. Notwithstanding the foregoing, in the event of the discharge of a Participant for cause, the Committee may, in its sole discretion, annul all of his Options, in which case such Options, whether or not exercisable on the date of discharge, shall terminate and be null and void.

            In the event that a Participant ceases to be an employee of the Company or a Subsidiary for any reason, including Retirement or Termination, his Options shall terminate and be null and void to the extent they are not immediately exercisable on the date of Retirement or Termination.

            Notwithstanding the foregoing, the Committee may, if it determines that to do so would be in the Company’s best interests, provide in a specific case or cases for the exercise of NQSOs or SARs which would not otherwise be immediately exercisable on the date of such Termination or Retirement, upon such terms and conditions as the Committee determines to be appropriate.

            Nothing in the 1993 Plan or in any Option shall confer any right to continue in the employ of the Company or a Subsidiary or interfere in any way with the right of the Company or a Subsidiary to terminate the employment of the Participant at any time.

            Notwithstanding any other provision in the 1993 Plan, ISOs will expire unless exercised within three months of termination of employment for any reason, except

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in the case of termination by reason of death or permanent and total disability (within the meaning of Section 22(e)(3) of the Code), in which case the ISO will expire unless exercised within one year of termination.

            (h)   Leave of Absence.    In the case of a Participant on an approved leave of absence, the Committee may, if it determines that to do so would be in the best interests of the Company, provide in a specific case for continuation of Options during such leave of absence, such continuation to be on such terms and conditions as the Committee determines to be appropriate, except that in no event shall an Option be exercisable after ten years from the date it is granted (or, in the case of a 10% Shareholder, more than 5 years from the date it is granted).

            (i)   Recapitalization.    In the event that dividends payable in Common Stock during any fiscal year of the Company exceed in the aggregate five percent (5%) of the Common Stock issued and outstanding at the beginning of the year, or in the event there is during any fiscal year of the Company one or more splits, subdivisions, or combinations of shares of Common Stock resulting in an increase or decrease by more than five percent (5%) of the shares outstanding at the beginning of the year, the number of shares available under the 1993 Plan shall be increased or decreased proportionately, as the case may be, and the number of shares deliverable upon the exercise thereafter of any stock option theretofore granted shall be increased or decreased proportionately, as the case may be, without change in the aggregate purchase price. Appropriate adjustment shall also be made to the
 exercise price of any outstanding SAR and to the number of shares considered to be subject to such SAR as is necessary to protect the value of such SAR at the time of such dividend or other action necessitating such adjustment. All adjustments shall be made as of the day such action necessitating such adjustment becomes effective.

            Common Stock dividends, splits, subdivisions, or combinations during any fiscal year which do not exceed in the aggregate five percent (5%) of the Common Stock issued and outstanding at the beginning of such year shall be ignored for purposes of the 1993 Plan.

            (j) Sale or Reorganization. In case the Company is merged or consolidated with another corporation, or in case the property or stock of the Company is acquired by another corporation, or in case of a separation, reorganization, or liquidation of the Company, the Board, or the board of directors of any corporation assuming the obligations of the Company hereunder, shall either (i) make appropriate provisions for the protection of the value of any outstanding Options by the substitution on an equitable basis of appropriate stock of the Company, or appropriate stock of the merged, consolidated, or otherwise reorganized corporation; provided, however, that in the case of an ISO, any such adjustment shall be subject to the requirements of Section 424 of the Code, and in the case of SARs, any additional adjustments to terms of the SARs will be made as necessary to ensure that the value of any

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unexercised SAR is not diminished, or (ii) give
    written notice to holders that their Options will become immediately exercisable,
    notwithstanding any waiting period otherwise prescribed by the Committee,
    and that such Options must be exercised within sixty (60) days of the date
    of such notice or they will be terminated.

            (k)   Change in Control.    Notwithstanding any other provision in the 1993 Plan, in the event of a Change in Control, as defined below, the Committee in its sole discretion may provide for immediate exercise, but in no event within 6 months of the date of grant, of any or all Options which are not yet exercisable at the time of the Change in Control and which are held by Participants who are employed by the Company or a Subsidiary at the time of the Change in Control. “Change in Control” is hereby defined as either (i) the acquisition of 30% or more of the outstanding voting securities of the Company by any person, (ii) a tender offer for Company stock or a proxy contest for the election of directors, if, after such tender offer or proxy contest, the persons who were directors immediately prior to such tender offer or proxy contest would not constitute a majority of
the Board, or (iii) approval by Company stockholders of either an agreement for a transaction whereby the Company will cease to be traded on a national securities exchange or a sale by the Company of all or substantially all of its assets.

            (l)   General Restrictions.    Each Option granted under the 1993 Plan shall be subject to the requirement that if at any time the Board shall determine, in its discretion, that the listing, registration or qualification of the shares issuable or transferable upon exercise thereof upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with the granting of such Option, or the issue, transfer or purchase of shares thereunder, such Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not acceptable to the Board. The Company shall not be obligated to sell or issue any shares of Common Stock in any manner in contravention of the

Securities Act of 1933, as amended, or any state securities law. Unless the shares to be issued upon the exercise of an Option by a Participant shall be registered prior to the issuance thereof under the Securities Act of 1933, as amended, such Participant will, as a condition of the Company’s obligation to issue such shares, be required to give a representation in writing that he is acquiring such shares for his own account as an investment and not with a view to, or for sale in connection with, any distribution thereof.

            In the event of the death of a Participant, an additional condition of exercising any Option shall be the delivery to the Company of such tax waivers and other documents as the Committee shall determine.

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            (m)   Definitions.    “Subsidiary” herein means any present or future corporation which is or would be a “subsidiary corporation” as that term is defined in Section 424 of the Code and “Parent” herein means any present or future corporation which is or would be a “parent corporation” of
    the Company in each case as the term is defined in Section 424 of the Code
determined as if the Company were the employer corporation of the Company.

            For purposes of the 1993 Plan, Fair Market Value shall be determined in accordance with the Code and the regulations thereunder.

            Any references herein to sections of the Code, regulations thereunder or rules under the Exchange Act shall also mean successor provisions to such sections, regulations or rules.

            (n)   Construction.    Article, Section and paragraph headings have been inserted in the Plan for convenience of reference only and are to be ignored in any construction of the provisions hereof. If any provision of the Plan shall be invalid or unenforceable, the remaining provisions shall nevertheless be valid, enforceable and fully effective. The Plan shall be construed, administered, regulated and governed by the laws of the United States to the extent applicable, and to the extent such laws are not applicable, by the laws of the State of Connecticut.

8.    Termination and Amendment of the 1993 Plan

            The
    Board shall have the right to amend, suspend, or terminate the 1993 Plan
    at any time; provided, however, that no such action shall affect or in any
    way impair the rights of a Participant or other holder under any Option theretofore
    granted under the 1993 Plan; and, provided further, unless first duly approved
    by the holders of Common Stock entitled to vote thereon at a meeting (which
    may be the annual meeting) duly called and held for such purpose, except
    as provided in Subparagraphs 7(i) and 7(j), no amendment or change shall
    be made in the 1993 Plan: (i) materially increasing the benefits accruing
    to Participants under the Plan; (ii) materially increasing the number of
    shares of Common Stock which may be issued under the Plan or (iii) materially
    modifying the requirements as to eligibility for participation in the Plan.

9.    Restriction on Sale of Shares

            Without
    prior written notice to the Company, no Common Stock acquired by a Participant
    upon exercise of an ISO granted hereunder shall be disposed of by the Participant
    within two years from the date such ISO was granted, nor within one year
    after the transfer of such stock to the Participant; provided, however, that
    none of (i) a transfer from a decedent to an estate or a transfer by bequest
    or inheritance; (ii) an exchange to which Sections 354, 355, 356 or 1036
    of the Code applies; (iii) a transfer between spouses or incident to divorce
    as described in Section 1041(a) of the Code, or (iv) a transfer to a

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trustee, receiver, or other fiduciary in any insolvency proceeding, as described in Section 422(c)(3) of the Code, shall be deemed to be such a disposition.

10.   Effective Date of the 1993 Plan

            The 1993 Plan is effective as of December 9, 1992, the date of its adoption by the Board, subject, however, to approval by the stockholders of the Company within 12 months thereafter and to any requisite New York State Department of Insurance approval; and if such approval is not obtained, the 1993 Plan shall terminate and any and all Options granted during such interim period shall also terminate and be of no further force or effect. The 1993 Plan shall terminate at such time as no further shares of Common Stock are available for issue upon the exercise or transfer of Options hereunder (including shares available due to the forfeiture or expiration of Options), or on such earlier date as the Board may determine. Any Option outstanding at the termination date shall remain outstanding until it has either expired by its terms or has been exercised.

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