EXCESSIVE OR LUXURY EXPENDITURE POLICY (ELEP)

This policy fulfills the requirements under the American Recovery and Reinvestment Act of 2009 (ARRA) enacted February 17, 2009. ARRA requires each recipient of funds under the Capital Purchase Program (CPP) of the Troubled Assets Relief Program (TARP) to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the Department of the U.S. Treasury.

MutualFirst Financial, Inc. (Company) and its subsidiaries, prohibit excessive or luxury expenditures on entertainment and events, office or facility renovations, aviation or other transportation services or other activities or events that are not reasonable expenditures for conferences, staff development, performance incentives or other similar measure conducted in the normal course of business operations of the Company and subsidiaries.

Entertainment & Events:
Entertainment is defined as an activity that a Director, Employee or Executive would use corporate funds for business development purposes relating to a current customer(s) or prospective customer(s) or to further enhance the Company's marketing efforts.

Our expectation is that all expenses incurred to the Bank would be for company purposes and used to drive business to the bank. Occasional events such as taking customers or prospects on trips, playing golf, eating dinner, taking them to other events the customer / prospect would find pleasurable is a necessary part of the Company's marketing efforts and is not deemed as "entertainment" or a violation of the Excessive or Luxury Expenditure Policy.

Renovations:
Renovations of facilities and office spaces should be relative to the approved capital budget. An exception to this can be allowed if management must deal with an emergency situation, such as an act of nature, and the expenditure is necessary to make the facility operational for customer use.

At no time should renovations be done that would have the appearance of being extraordinary, or excessive from a shareholder perspective.

Aviation Services:
Transportation for Company staff conducting Company business should be utilized in the most cost efficient way for the Company. Airfare should be managed utilizing the most efficient cost possible. The Company will provide coach airfare on all business related trips.

Other:
We encourage our staff to attend conferences that are appropriate educational opportunities. These conferences should be related to the financial services industry and have a direct correlation to their job. At times it may be appropriate that a spouse would travel to these conferences with Company attendees. Typically these conferences are sponsored by vendors, banking associations, or other industry related entities. Approval for overnight travel is the responsibility of the CEO or President.

We feel that employee activities are part of an employee appreciation process. Activities should be local in geographic nature, and should not cost the Company more than an average day's payroll per employee, on average.

Board Retreats should only be used for educational purposes, and should be kept in consideration, and looked at in the same view and discretion as all other expenses. Board education is a vital part of maintaining, and keeping a dynamic director base, and this policy does not limit a retreat that is focused on strategic planning or education.

Events and parties focused on Customers for the purpose of attracting their business would not fall under this policy.

Each year the CEO and CFO shall require and oversee a review of incurred expenses covered by this ELEP to determine if all required approvals have been obtained. Based on this review, the CEO and CFO shall submit a certification to the Compensation Committee stating that all required prior approvals have been properly obtained or, if not the case, noting the specific failures.

Accountability and Violations:
This ELEP applies to the Company, its subsidiaries and all their directors, officers and employees. Failure to comply with the ELEP could result in the individual having to reimburse the Company or its subsidiaries for improper expenses incurred or other personnel action.

All employees and directors are expected to report any violations or possible violations of this ELEP as follows:

If the violation or potential violation involves any director, the CEO, COO, CFO, or any TARP or SEC senior executive officer (SEO), it should be reported to the Chairman of the Compensation Committee or the Audit Committee;
If the violation or potential violation involves any other executive officer, it should be reported to the CEO or CFO; and
All other violations or potential violations should be reported to the President.

Our auditors, outside counsel and other third-party advisors are expected to report violations and potential violations in the same fashion.

Effectiveness:
In accordance with applicable law and regulation, this ELEP shall be effective from the date of adoption until the first business day following the date the Company redeems the preferred securities purchased by Treasury with federal assistance.