EXHIBIT 10.32*

HORIZON BANCORP

2013 OMNIBUS EQUITY INCENTIVE PLAN

(Effective as of February 1, 2013)

Krieg DeVault LLP

One Indiana Square, Suite 2800

Indianapolis, IN 46204-2079

www.kriegdevault.com

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

         Page  

SECTION 1 PURPOSE AND DURATION

     1   

1.1.

  Establishment of the Plan      1   

1.2.

  Purposes of the Plan      1   

1.3.

  Definitions      1   

SECTION 2 ADMINISTRATION

     6   

2.1.

  The Committee      6   

2.2.

  Authority of the Committee      7   

2.3.

  Delegation by the Committee      7   

2.4.

  Decisions Binding      7   

2.5.

  Considerations in Establishing Performance Goals      7   

SECTION 3 SHARES SUBJECT TO THIS PLAN

     8   

3.1.

  Number of Shares      8   

3.2.

  Release of Shares      8   

3.3.

  Restrictions on Shares      9   

3.4.

  Shareholder Rights      9   

3.5.

  Dividends and Dividend Equivalents      9   

3.6.

  Changes in Stock      10   

3.7.

  Book-Entry Securities      11   

SECTION 4 ELIGIBILITY

     11   

4.1.

  Eligibility      11   

4.2.

  No Contract of Employment      11   

4.3.

  No Right to Be Retained on Board      11   

SECTION 5 STOCK OPTIONS

     11   

5.1.

  Grant of Options      11   

5.2.

  Option Award Agreement      12   

5.3.

  Exercise Price      12   

5.4.

  Duration of Options      13   

5.5.

  Exercisability of Options      13   

5.6.

  Method of Exercise      13   

5.7.

  Restrictions on Share Transferability      14   

5.8.

  Termination by Reason of Death, Disability or Retirement      14   

5.9.

  Other Termination      14   

5.10.

  Special Provision for Incentive Stock Options      14   

SECTION 6 STOCK APPRECIATION RIGHTS

     15   

6.1.

  Grant of SARs      15   

6.2.

  Exercise of Tandem SARs      15   

6.3.

  Exercise of Affiliated SARs      15   

 

i

--------------------------------------------------------------------------------

6.4.

  Exercise of Freestanding SARs      15   

6.5.

  SAR Award Agreement      16   

6.6.

  Expiration of SARs      16   

6.7.

  Payment of SAR Amount      16   

6.8.

  Termination of SAR      16   

SECTION 7 RESTRICTED STOCK

     16   

7.1.

  Grant of Restricted Stock      16   

7.2.

  Restricted Stock Award Agreement      16   

7.3.

  Transferability      16   

7.4.

  Other Restrictions      17   

7.5.

  Removal of Restrictions      18   

7.6.

  Voting Rights      18   

7.7.

  Return of Restricted Stock to Company      18   

7.8.

  Termination of Service      18   

SECTION 8 PERFORMANCE UNITS AND PERFORMANCE SHARES

     19   

8.1.

  Grant of Performance Units/Shares      19   

8.2.

  Value of Performance Units/Shares      19   

8.3.

  Performance Goals and Other Terms      19   

8.4.

  Earning of Performance Units/Shares      20   

8.5.

  Form and Timing of Payment of Performance Units/Shares      20   

8.6.

  Cancellation of Performance Units/Shares      20   

8.7.

  Termination of Service      20   

SECTION 9 AMENDMENT, TERMINATION, AND DURATION

     21   

9.1.

  Amendment, Suspension, or Termination      21   

9.2.

  Duration of this Plan and Shareholder Approval      21   

SECTION 10 TAX WITHHOLDING

     21   

10.1.

  Withholding Requirements      21   

10.2.

  Withholding Arrangements      22   

SECTION 11 CHANGE IN CONTROL

     22   

11.1.

  Change in Control      22   

11.2.

  Definition      23   

SECTION 12 LEGAL CONSTRUCTION

     24   

12.1.

  Gender and Number      24   

12.2.

  Severability      24   

12.3.

  Requirements of Law      24   

12.4.

  Governing Law      24   

12.5.

  Headings      25   

12.6.

  Mistake of Fact      25   

12.7.

  Evidence      25   

12.8.

  409A Compliance      25   

 

ii

--------------------------------------------------------------------------------

SECTION 13 MISCELLANEOUS

     25   

13.1.

  No Effect on Employment or Service      25   

13.2.

  No Company Obligation      26   

13.3.

  Participation      26   

13.4.

  Liability and Indemnification      26   

13.5.

  Successors      26   

13.6.

  Beneficiary Designations      27   

13.7.

  Nontransferability of Awards      27   

13.8.

  No Rights as Shareholder      28   

13.9.

  Mitigation of Excise Tax      28   

13.10.

  Funding      28   

 

iii

--------------------------------------------------------------------------------

HORIZON BANCORP

2013 OMNIBUS EQUITY INCENTIVE PLAN

SECTION 1

PURPOSE AND DURATION

1.1. Establishment of the Plan. Horizon Bancorp, an Indiana corporation, hereby
establishes an equity-based incentive compensation plan to be known as the
Horizon Bancorp 2013 Omnibus Equity Incentive Plan, set forth in this document.
This Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Performance Units and
Performance Shares. This Plan and the grant of Awards hereunder are expressly
conditioned upon the Plan’s approval by the shareholders of the Company. The
Plan is adopted effective as of February 1, 2013; however, no Options may be
exercised, and no other Award may be exercised or otherwise paid until the Plan
has been approved by a majority of the Shares of the Company represented at the
shareholder’s meeting at which approval of the Plan is considered, as specified
in Section 10.2.

1.2. Purposes of the Plan. The purposes of this Plan are to further the growth
and financial success of the Company and its Affiliates by aligning the
interests of the Participants, through the ownership of Shares and through other
incentives, with the interests of the Company’s shareholders; to provide
Participants with an incentive for excellence in individual performance; and to
promote teamwork among Participants. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract and retain the
services of officers and employees who make significant contributions to the
Company’s success and to allow Participants to share in the success of the
Company.

1.3. Definitions. For purposes of this Plan, the following words and phrases
will have the following meanings when capitalized in the Plan, including any
Supplements, unless a different meaning is plainly required by the context:

1.3.1. “1934 Act” means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder
includes such section or regulation, any valid regulation promulgated under such
section and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.

1.3.2. “Affiliate” means any corporation or any other entity (including, but not
limited to, partnerships, limited liability companies, joint ventures and
Subsidiaries) controlling, controlled by or under common control with the
Company.

1.3.3. “Affiliated SAR” means a SAR that is granted in connection with a related
Option, and that automatically will be deemed to be exercised at the same time
that the related Option is exercised.

 

1

--------------------------------------------------------------------------------

1.3.4. “Award” means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units or Performance Shares.

1.3.5. “Award Agreement” means the written agreement which sets forth the terms
and provisions applicable to each Award granted under this Plan.

1.3.6. “Beneficiary” means the person or persons designated by a Participant to
receive the benefits under this Plan, if any, which become payable as a result
of the Participant’s death.

1.3.7. “Board” or “Board of Directors” means the Board of Directors of the
Company serving at the time that this Plan is approved by the shareholders of
the Company or thereafter.

1.3.8. “Cashless Exercise” means, if there is a public market for the Shares,
the payment of the Exercise Price of Options (a) through a “same day sale”
commitment from the Participant and an NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased in order to pay the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such stock to forward the Exercise Price
directly to the Company, or (b) through a “margin” commitment from the
Participant and an NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company.

1.3.9. “Cause” means, for purposes of determining whether and when a Participant
has incurred a Termination of Service for Cause, any act or failure to act
which: (a) results in removal or permanent prohibition of the Participant from
participating in the conduct of Company’s or a /subsidiary’s affairs by an order
issued under section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12
USC 1818(e)(4) and (g)(1); or (b) permits the Company to terminate the written
agreement or arrangement between the Participant and the Company or an Affiliate
for “cause” as defined in such agreement or arrangement. In the event there is
no such agreement or arrangement or the agreement or arrangement does not define
the term “cause,” then “Cause” for purposes of this Plan will mean (i) the
willful and continued failure of a Participant to perform his required duties as
an Employee or Non-employee Director of the Company or any Subsidiary; (ii) any
action by a Participant which involves willful misfeasance or gross negligence;
(iii) the requirement of or direction by a federal or state regulatory agency
which has jurisdiction over the Company or any Subsidiary to terminate the
employment of a Participant; (iv) the conviction of a Participant of the
commission of any criminal offense which involves dishonesty or breach of trust;
(v) any intentional breach by a Participant of a material term, condition or
covenant of any agreement between the Participant and the Company or any
Subsidiary or (v) removal or permanent prohibition of the Participant from
participating in the conduct of Company’s or a /subsidiary’s affairs by an order
issued under section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12
USC 1818(e)(4) and (g)(1).

 

2

--------------------------------------------------------------------------------

1.3.10. “Change in Control” will have the meaning assigned to such term in
Section 12.2.

1.3.11. “Code” means the Internal Revenue Code of 1986, as amended. Reference to
a specific section of the Code or regulation thereunder will include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future law, legislation or regulation amending,
supplementing or superseding such section or regulation.

1.3.12. “Committee” means the Compensation Committee of the Board serving on the
date that this Plan is approved by the shareholders of the Company or
thereafter.

1.3.13. “Company” means Horizon Bancorp, an Indiana corporation and any
successor thereto. With respect to the definition of Performance Goals, the
Committee, in its sole discretion, may determine whether “Company” means Horizon
Bancorp and its Subsidiaries on a consolidated basis.

1.3.14. “Covered Employee” means an Employee who, on the last day of the taxable
year, is (i) the chief executive officer of the Company or is acting in such a
capacity, or (ii) among the four highest compensated officers (other than the
chief executive officer) for the taxable year.

1.3.15. “Director” means any individual who is a member of the Board.

1.3.16. “Disability” means a disability as determined for purposes of the
Federal Social Security Act which qualifies the Participant for permanent
disability insurance payments in accordance with such Act. Disability for
purposes of the Plan will not include any disability which is incurred while the
Participant is on leave of absence because of military or similar service and
for which a governmental pension is payable.

1.3.17. “Effective Date” means February 1, 2013.

1.3.18. “Employee” means all employees of the Company or an Affiliate, whether
such employees are employed on the date that this Plan is adopted by the Board
or become employed subsequent to such approval.

1.3.19. “Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.

1.3.20. “Fair Market Value” means the per share closing price for the Shares, as
reported by the NASDAQ Stock Market or by such other exchange or market on which
the Shares are then listed or regularly traded, determined as of the day on
which the applicable Award is granted to a Participant.

 

3

--------------------------------------------------------------------------------

1.3.21. “Fiscal Year” means the annual accounting period of the Company.

1.3.22. “Freestanding SAR” means a SAR that is granted independently of any
Option.

1.3.23. “Grant Date” means, with respect to any Award granted under this Plan,
the date on which the Award was granted by the Committee, regardless if the
Award Agreement to which the Award relates is executed subsequent to such date.

1.3.24. “Incentive Stock Option” means an Option granted under this Plan to
purchase Shares which is designated as an Incentive Stock Option and is intended
to meet the requirements of Code Section 422.

1.3.25. “NASD Dealer” means a broker-dealer who is a member of the National
Association of Securities Dealers, Inc.

1.3.26. “Non-employee Director” means any individual who is a member of the
Board of Directors and who is not an employee of the Company.

1.3.27. “Nonqualified Stock Option” means an Option granted under this Plan to
purchase Shares which is not an Incentive Stock Option.

1.3.28. “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

1.3.29. “Option Period” means the period during which an Option will be
exercisable in accordance with the applicable Award Agreement and Section 6.

1.3.30. “Participant” means an Employee or Non-employee Director to whom an
Award has been granted.

1.3.31. “Performance Goals” means, except as otherwise provided in Sections
8.4.2 and 9.3.2, the goals which must be attained, as determined by the
Committee in its sole discretion, utilizing the United States Treasury
Department final “Guidance on Sound Incentive Compensation Policies” and any
subsequent guidance hereafter provided by applicable statute, rule or
regulation, for a Participant to earn an Award. As determined by the Committee
in its sole discretion, the Performance Goals applicable to each Award granted
under the Plan to a Participant who is not a Covered Employee, will provide for
a targeted level or levels of financial achievement with respect to one or more
of the following business criteria: (a) return on assets; (b) earnings before
interest, taxes, depreciation and amortization (EBITDA); (c) net income;
(d) total shareholder return; (e) return on equity; (f) Affiliate or division
operating income; (g) pre- or after-tax income; (h) cash flow; (i) cash flow per
share; (j) earnings per share (basic or diluted); (k) return on invested
capital; (l) economic value added (or an equivalent metric); (m) share price
performance; (n) improvement in or attainment of expense levels; and
(o) improvement in or attainment of working capital levels. The Performance
Goals may differ from Participant to Participant and from Award to Award. In the
case of a Participant who is a Covered Employee, as described in the preceding
sentence, the Performance Goal will be based on (i) return on equity;
(ii) return on common equity, (iii) net income; (iv) compounded annual growth of
assets; (v) return on assets or (vi) a combination of two or more of these
measures.

 

4

--------------------------------------------------------------------------------

1.3.32. “Performance Period” means the period of time during which Performance
Goals must be achieved with respect to an Award, as determined by the Committee
in its sole discretion.

1.3.33. “Performance Share” means an Award granted to a Participant pursuant to
Section 9.

1.3.34. “Performance Unit” means an Award granted to a Participant pursuant to
Section 9.

1.3.35. “Period of Restriction” means the period during which Shares of
Restricted Stock are subject to transfer restrictions and, therefore, the Shares
are subject to a substantial risk of forfeiture. As provided in Section 8, such
restrictions may be based on the passage of time, the achievement of specific
target levels of performance (in the case of “performance-based compensation”
under Code Section 162(m)), or the occurrence of such other events as may be
determined by the Committee in its sole discretion.

1.3.36. “Plan” means the Horizon Bancorp 2013 Omnibus Equity Incentive Plan, as
set forth in this document and as hereafter amended from time to time.

1.3.37. “Restricted Stock” means an Award granted to a Participant pursuant to
Section 8.

1.3.38. “Retirement” means, in the case of an Employee, the termination of
employment by a Participant on or after attaining age 65 for reasons other than
Cause, death or Disability.

1.3.39. “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any
future rule or regulation amending, supplementing or superseding such rule.

1.3.40. “Section 16 Person” means a person subject to potential liability under
Section 16(b) of the 1934 Act with respect to transactions which involve equity
securities of the Company.

1.3.41. “Shares” means the whole shares of issued and outstanding regular voting
common stock, no par value, of the Company, whether presently or hereafter
issued and outstanding, and any other stock or securities resulting from
adjustment thereof as provided in Section 4.6, or the stock of any successor to
the Company which is so designated for the purposes of the Plan.

1.3.42. “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
tandem with a related Option, that is designated as a “SAR” pursuant to
Section 7.

 

5

--------------------------------------------------------------------------------

1.3.43. “Subsidiary” means a corporation, partnership or limited liability
company, a majority of the outstanding voting stock, general partnership
interests or membership interests, as the case may be, of which is owned or
controlled, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company. For the purposes of this definition, “voting stock”
means stock having voting power for the election of directors, or trustees, as
the case may be, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency. A Subsidiary includes
any Subsidiary of the Company as of the Effective Date and each entity that
becomes a Subsidiary of the Company after the Effective Date.

1.3.44. “Tandem SAR” means a SAR that is granted in tandem with a related
Option, the exercise of which will require forfeiture of the right to exercise
such Option and to purchase an equal number of Shares under the related Option;
and, when a Share is purchased pursuant to the exercise of such Option, the SAR
will be forfeited to the same extent.

1.3.45. “Termination of Service” in the case of an Employee, means the
occurrence of any act or event or any failure to act, whether pursuant to an
employment agreement or otherwise, that actually or effectively causes or
results in a Participant ceasing, for whatever reason, to be an Employee of the
Company or an Affiliate, including, but not limited to, death, Disability,
Retirement, termination by the Company or an Affiliate of the Participant’s
employment with the Company or an Affiliate (whether with or without Cause) and
voluntary resignation or termination by the Participant of his or her employment
with the Company or an Affiliate. A Termination of Service will also occur with
respect to an Employee who is employed by an Affiliate if the Affiliate ceases
to be an Affiliate of the Company and the Participant does not immediately
thereafter become an Employee of the Company or another Affiliate. For purposes
of this Plan, transfers or changes of employment of a Participant between the
Company and an Affiliate (or between Affiliates) will not be deemed a
Termination of Service. “Termination of Service” in the case of a Non-employee
Director means the failure to be reelected to the Board or resignation or
removal from the Board.

SECTION 2

ADMINISTRATION

2.1. The Committee. This Plan will be administered by the Committee. The
decision or action of a majority of the actual number of members of the
Committee will constitute the decision or action of the Committee. The Committee
will consist of not less than three Directors. The members of the Committee will
be appointed from time to time by, and will serve at the pleasure of, the Board.
The Committee will be comprised solely of Directors who are (a) “nonemployee
directors” under Rule 16b-3, and (b) “outside directors” as described in
Treasury Regulation Section 1.162-27(e)(3), and (c) “independent” under the
director independence requirements of the NASDAQ Stock Market or, if it changes,
the principal securities exchange or market on which the share are then traded
or listed. Failure of the Committee to be so comprised will not result in the
cancellation, termination, expiration or lapse of any Award.

 

6

--------------------------------------------------------------------------------

2.2. Authority of the Committee. Except as limited by law or by the Articles of
Incorporation or By-Laws of the Company, and subject to the provisions of this
Plan, the Committee will have full power and discretion to: (a) select Employees
and Non-employee Directors who will participate in the Plan; (b) determine the
sizes and types of Awards; (c) determine the terms and conditions of Awards in a
manner consistent with this Plan; (d) construe and interpret this Plan, all
Award Agreements and any other agreements or instruments entered into under this
Plan; (e) establish, amend or waive rules and regulations for the Plan’s
administration; and (f) amend the terms and conditions of any outstanding Award
and applicable Award Agreement to the extent such terms and conditions are
within the discretion of the Committee as provided in this Plan; provided
however, the Committee may only accelerate the exercisability or vesting of an
Award in connection with a Participant’s death, Disability, Retirement, or in
connection with a Change in Control. The Committee may also accelerate the
exercisability or vesting of an Award to the extent such actions involve an
aggregate number of Shares not in excess of five percent of the number of Shares
initially available for Awards.

2.3. Delegation by the Committee. The Committee, in its sole discretion and on
such terms and conditions as it may provide, may delegate all or any part of its
authority and powers under this Plan to one or more Directors or officers of the
Company; provided, however, that the Committee may not delegate its authority
and powers (a) with respect to grants to Section 16 Persons, (b) in any way
which would jeopardize this Plan’s qualification under Code Section 162(m) or
Rule 16b-3 or (c) adversely impact Awards under Rule 16b-3.

2.4. Decisions Binding. All determinations and decisions made by the Committee,
the Board and any delegate of the Committee pursuant to Section 3.3 will be
final, conclusive and binding on all persons, including the Company and
Participants. No such determinations will be subject to de novo review if
challenged in court.

2.5. Considerations in Establishing Performance Goals. In determining
appropriate Performance Goals and the relative weight accorded each Performance
Goal, the Committee must:

2.5.1. Balance risk and financial results in a manner that does not encourage
Participants to expose the Company and its Subsidiaries to imprudent risks; and

2.5.2. Monitor the success of the Performance Goals and weighting established in
prior years, alone and in combination with other incentive compensation awarded
to the same Participants, and make appropriate adjustments in future calendar
years as needed so that payments appropriately incentivize Participants and
appropriately reflect risk.

 

7

--------------------------------------------------------------------------------

SECTION 3

SHARES SUBJECT TO THIS PLAN

3.1. Number of Shares.

3.1.1. Maximum Number. Subject to adjustment as provided in Section 4.6, the
maximum number of Shares cumulatively available for issuance under this Plan
pursuant to the: (a) exercise of Options; (b) grant of Affiliated, Freestanding
and Tandem SARs; (c) grant of Shares of Restricted Stock; and (d) payment of
Performance Units and Performance Shares, will not exceed Six Hundred Ninety-One
Thousand Seven Hundred (691,700) Shares (consisting of Two Hundred Thousand
(200,000) new Shares plus Four Hundred Ninety-One Thousand Seven Hundred
(491,700) Shares rolled over and unused from the expired Horizon Bancorp 2003
Omnibus Equity Incentive Plan); plus (i) shares under Horizon Bancorp 2003
Omnibus Equity Incentive Plan that are forfeited, cancelled or expire
unexercised; (ii) Shares tendered (actually or by attestation) to the Company in
connection with the exercise of Options; (iii) Shares purchased by the Company
in the open market or otherwise using the cash proceeds upon the exercise of
Options; (iv) Shares settled hereunder in cash; (v) Shares withheld pursuant to
Section 11; and (vi) the number of Shares equal to the value, as determined by
the Committee in its sole discretion, of the income tax deductions recognized by
the Company in connection with the exercise of Non-Qualified Stock Options and
disqualifying dispositions of Shares acquired on the exercise of Incentive Stock
Options, determined as of the date on which the Company’s federal income tax
return is filed less the total number of Shares previously issued under this
Plan, and less the total number of Shares then subject to outstanding Options or
other Awards. The foregoing share reserve will be supplemented by an additional
number of Shares that remain in acquired company plans that are assumed by the
Company.

3.1.2. Limits Based on Award Type. In calculating the number of Shares available
for issuance under this Plan, (a) no more than One Hundred Thousand
(100,000) Shares will be cumulatively available for the grant of Incentive Stock
Options under this Plan, (b) no more than Four Hundred Thousand (400,000) Shares
will be available for the grant of non-Option Awards, (c) during any Fiscal
Year, no Participant will be granted an Award for more than One Hundred Thousand
(100,000) Shares, and (d) no Participant will receive Performance Units or
Performance Shares under Section 9 having an initial value greater than One
Million Dollars ($1,000,000). Shares issued under this Plan may be either
authorized but unissued Shares, treasury Shares or reacquired Shares (including
Shares purchased in the open market), or any combination thereof, as the
Committee may from time to time determine in its sole discretion.

3.1.3. Forfeited and Unpurchased Shares. Shares covered by an Award that are
forfeited or that remain unpurchased or undistributed upon termination or
expiration of the Award may be made the subject of further Awards to the same or
other Participants. If the exercise price of any Option is satisfied by
tendering Shares (by either actual delivery or attestation), only the number of
Shares actually issued, net of the Shares tendered, will be deemed issued for
purposes of determining the number of Shares available for Awards under this
Plan. Additionally, if Shares are withheld pursuant to Section 11.2, only the
number of Shares actually issued, net of the Shares withheld, will be deemed
issued for purposes of determining the number of Shares available for Awards
under this Plan.

3.2. Release of Shares. Subject to the limitations set forth in this Plan, the
Committee will have full authority to determine the number of Shares available
for Awards and, in its sole discretion, may include (without limitation) as
available for distribution (a) any Shares that have

 

8

--------------------------------------------------------------------------------

ceased to be subject to an Award; (b) any Shares subject to an Award that have
been previously forfeited; (c) any Shares under an Award that otherwise
terminates without the issuance of Shares being made to a Participant; (d) any
Shares that are received by the Company in connection with the exercise of an
Award, including the satisfaction of any tax liability or tax withholding
obligation; or (e) any Shares repurchased by the Company in the open market or
otherwise, having an aggregate repurchase price no greater than the amount of
cash proceeds received by the Company from the exercise of Options granted under
this Plan. Any Shares that are available immediately prior to the termination of
the Plan, or any Shares returned to the Company for any reason subsequent to the
termination of the Plan, may be transferred to a successor plan.

3.3. Restrictions on Shares. Shares issued upon exercise of an Award will be
subject to the terms and conditions specified herein and to such other terms,
conditions and restrictions as the Committee in its sole discretion may
determine and provide in the Award Agreement. The Company will not be required
to issue or deliver any certificates for Shares, cash or other property prior to
the (a) listing of such Shares on any stock exchange (or other public market) on
which the Shares may then be listed (or regularly traded), and (b) completion of
any registration or qualification of such shares under federal, state, local or
other law, or any ruling or regulation of any government body which the
Committee determines to be necessary or advisable. The Company may cause any
certificate for any Shares to be delivered hereunder to be properly marked with
a legend or other notation reflecting the limitations on transfer of such Shares
as provided in this Plan or as the Committee may otherwise require.
Participants, or any other persons entitled to benefits under this Plan, must
furnish to the Committee such documents, evidence, data or other information as
the Committee considers necessary or desirable for the purpose of administering
this Plan. The benefits under this Plan for each Participant, and each other
person who is entitled to benefits hereunder, are to be provided on the
condition that he furnish full, true and complete data, evidence or other
information, and that he promptly signs any document reasonably related to the
administration of this Plan requested by the Committee. No fractional Shares
will be issued under this Plan; rather, fractional shares will be aggregated and
then rounded to the next lower whole Share.

3.4. Shareholder Rights. Except with respect to Restricted Stock as provided in
Section 8 and dividend rights as provided in Section 4.5, no person will have
any rights of a shareholder (including, but not limited to, voting rights) as to
Shares subject to an Award until, after proper exercise or vesting of the Award
or other action as may be required by the Committee in its sole discretion, such
Shares have been recorded on the Company’s official shareholder records (or the
records of its transfer agents or registrars) as having been issued and
transferred to the Participant. Upon exercise of the Award or any portion
thereof, the Company will have a reasonable period in which to issue and
transfer the Shares to the Participant, and the Participant will not be treated
as a shareholder for any purpose whatsoever prior to such issuance and transfer.
No payment or adjustment will be made for rights for which the record date is
prior to the date such Shares are recorded as issued and transferred in the
Company’s official shareholder records (or the records of its transfer agents or
registrars), except as otherwise provided herein or in an Award Agreement.

3.5. Dividends and Dividend Equivalents. The Committee may provide that Awards
denominated in Shares earn dividends or dividend equivalents. Such dividends and
dividend equivalents may be paid currently in cash or Shares or may be credited
to an account established

 

9

--------------------------------------------------------------------------------

by the Committee in the Participant’s name. In addition, dividends or dividend
equivalents paid on outstanding Awards or issued Shares may be credited to such
account rather than paid currently. Any crediting of dividends or dividend
equivalents may be subject to such restrictions and conditions as the Committee
may establish, including reinvestment in additional Shares or Share equivalents.
Notwithstanding the foregoing, dividends or dividend equivalents on unvested
portions of Awards whose vesting is subject to the achievement of specified
Performance Goals may, as set forth in an Award Agreement, be subject to the
same restrictions as the underlying Shares or units to which such dividends or
dividend equivalents relate.

3.6. Changes in Stock.

3.6.1. Substitution of Stock and Assumption of Plan. In the event of any change
in the Shares by virtue of any stock dividends, stock splits, recapitalizations
or reclassifications or any acquisition, merger, consolidation, share exchange,
tender offer or other combination involving the Company that does not constitute
a Change in Control but that results in the acquisition of a Subsidiary by the
Company, or in the event that other stock is substituted for the Shares as the
result of any merger, consolidation, share exchange or reorganization or any
similar transaction which constitutes a Change in Control of the Company, the
Committee will correspondingly adjust the (a) number, kind and class of Shares
which may be delivered under this Plan, (b) number, kind, class and price of
Shares subject to outstanding Awards (except for mergers or other combinations
in which the Company is the surviving entity), and (c) numerical limits of
Sections 4.1, 6.1, 7.1, 8.1 and 9.1, all in such manner as the Committee in its
sole discretion determines to be advisable or appropriate to prevent the
dilution or diminution of such Awards; provided, however, in no event will the
One Hundred Thousand Dollar ($100,000) limit on Incentive Stock Options
contained in Section 6.1 be affected by an adjustment under this Section 4.6.1.
The Committee’s determinations under this Section 4.6.1 will be final and
conclusive.

3.6.2. Conversion of Shares. In the event of a Change in Control of the Company
pursuant to which another person or entity acquires control of the Company (such
other person or entity being the “Successor”), the kind of shares of stock which
are subject to this Plan and to each outstanding Award will, automatically by
virtue of such Change in Control, be converted into and replaced by securities
of the Successor, having full voting, dividend, distribution, preference and
liquidation rights, and the number of shares subject to an Award, the
calculation of an Award’s value and the purchase price per share upon exercise
of the Award will be correspondingly adjusted so that, by virtue of such Change
in Control of the Company, each Participant will (a) in the case of Options,
have the right to purchase (i) that number of shares of stock of the Successor
which have a Fair Market Value, as of the date of such Change in Control of the
Company, equal to the Fair Market Value, as of the date of such Change in
Control of the Company, of the Shares of the Company theretofore subject to each
Option, and (ii) for a purchase price per share which, when multiplied by the
number of shares of stock of the Successor subject to each Option, will equal
the aggregate exercise price at which the Participant could have acquired all of
the Shares previously optioned to the Participant; and (b) in the case of Awards
other than Options, Performance Shares and Performance Units, have the right to
receive that number of shares of stock of the Successor which have a Fair Market

 

10

--------------------------------------------------------------------------------

Value, as of the date of such Change in Control of the Company, equal to the
Fair Market Value, as of the date of the Change in Control of the Company, of
the Shares of the Company to which each Award relates. The Committee, in its
sole discretion, will determine the method by which Awards of Performance Shares
and Performance Units will be adjusted due to a Change in Control of the
Company. Shares issued in connection with the Awards that are assumed, converted
or substituted under this Section 4.6.2 will not reduce the number of Shares
reserved for issuance under Section 4.1.

3.7. Book-Entry Securities. The Company shall have the right to maintain all
Awards in book-entry form in the name of the Participant until such time as such
Awards shall have been vested and the requirements of Section 3.3 have been met.

SECTION 4

ELIGIBILITY

4.1. Eligibility. Except as herein provided, the individuals who are eligible to
participate in this Plan and be granted Awards are those individuals who are
Employees of the Company or any Affiliate and Non-employee Directors of the
Company. The Committee may, from time to time and in its sole discretion, select
Employees and Non-employee Directors of the Company to be granted Awards and
will determine the terms and conditions with respect thereto. In making any such
selection and in determining the form of the Award, the Committee may give
consideration to the functions and responsibilities of the Employees or
Non-employee Director to the Company or its Affiliates, the value of the
Employee or Non-employee Director’s services (past, present and future) to the
Company or its Affiliates and such other factors deemed relevant by the
Committee in its sole discretion. An Employee or Non-employee Director will
become a Participant in this Plan as of the date specified by the Committee. A
Participant can be removed as an active Participant by the Committee effective
as of any date; provided, however, that no such removal will adversely affect
any Award previously granted to the Participant.

4.2. No Contract of Employment. Neither this Plan nor any Award Agreement
executed hereunder will constitute a contract of employment between an Employee
and the Company or an Affiliate, and participation in this Plan will not give an
Employee the right to be rehired by or retained in the employment of the Company
or an Affiliate.

4.3. No Right to Be Retained on Board. Neither this Plan nor any Award Agreement
executed hereunder will give any Director the right to be retained, nominated or
re-elected as a Director.

SECTION 5

STOCK OPTIONS

5.1. Grant of Options. Subject to the terms and provisions of this Plan, the
Committee, at any time and from time to time, may grant Options to any Employee
or Non-employee Director in such amounts as the Committee, in its sole
discretion, may determine. The Committee may grant Incentive Stock Options,
Nonqualified Stock Options or any combination

 

11

--------------------------------------------------------------------------------

thereof; provided, however, Non-employee Directors may not be granted Incentive
Stock Options. Subject to the terms and provisions of this Plan, the Committee,
in its sole discretion, will determine the number of Shares subject to each
Option; provided, however, no Participant may be granted Incentive Stock Options
under this Plan which would result in Shares with an aggregate Fair Market Value
(measured on the Grant Date(s)) of more than One Hundred Thousand Dollars
($100,000) first becoming exercisable in any one calendar year.

5.2. Option Award Agreement. Each Award of an Option will be evidenced by an
Award Agreement that will specify the Exercise Price, the number of Shares to
which the Option pertains, the Option Period, any conditions to exercise of the
Option and such other terms and conditions as the Committee, in its sole
discretion, determines. The Award Agreement will also specify whether the Option
is intended to be an Incentive Stock Option or a Nonqualified Stock Option. All
grants of Options intended to constitute Incentive Stock Options will be made in
accordance, and all Award Agreements pursuant to which Incentive Stock Options
are granted will comply, with the requirements of Code Section 422.

5.3. Exercise Price. The Exercise Price for each Option will be determined by
the Committee under this Section 6.3; provided, however, except in connection
with a corporate transaction involving the Company (including, without
limitation, any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, or exchange of shares), the terms of outstanding Awards may not be
amended to reduce the exercise price of outstanding Options or cancel
outstanding Options in exchange for cash, other Awards or Options with an
exercise price that is less than the exercise price of the original Options
without shareholder approval.

5.3.1. Nonqualified Stock Options. In the case of a Nonqualified Stock Option,
the Exercise Price per Share will be determined by the Committee; provided,
however, in no event will the Exercise Price be less than 100 percent of the
Fair Market Value of the Shares to which the Nonqualified Stock Option relates,
determined as of the Grant Date.

5.3.2. Incentive Stock Options. In the case of an Incentive Stock Option, the
Exercise Price will be not less than 100 percent of the Fair Market Value of the
Shares to which the Incentive Stock Option relates determined as of the Grant
Date; provided, however, that if, on the Grant Date, the Participant (together
with persons whose stock ownership is attributed to the Participant pursuant to
Code Section 424(d)) owns securities possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or any of its
Subsidiaries, the Exercise Price will be not less than 110 percent of the Fair
Market Value of the Shares to which the Incentive Stock Option relates,
determined as of the Grant Date.

5.3.3. Substitute Options. Notwithstanding the provisions of Sections 6.3.1 and
6.3.2, in the event that the Company or an Affiliate consummates a transaction
described in Code Section 424(a) (e.g., the acquisition of property or stock
from an unrelated corporation), individuals who become Employees on account of
such transaction may be granted Options in substitution for options granted by
such former employer. If such substitute Options are granted, the Committee, in
its sole discretion and consistent with Code Section 424(a), shall determine the
Exercise Price of such substitute Options. In carrying out the provisions of
this Section 6.3.3, the Committee will apply the principles contained in Section
4.6.

 

12

--------------------------------------------------------------------------------

5.4. Duration of Options. Subject to the terms and provisions of Sections 10 and
12, the Option Period with respect to each Option will commence and expire at
such times as the Committee provides in the Award Agreement, provided that:

(a) Incentive and Nonqualified Stock Options will not be exercisable later than
the tenth anniversary of their respective Grant Dates;

(b) Incentive Stock Options granted to an Employee who possesses more than 10
percent of the total combined voting power of all classes of Shares of the
Company, taking into account the attribution rules of Code Section 422(d), will
not be exercisable later than the fifth anniversary of their Grant Date(s); and

(c) Subject to the limits of this Section 6, the Committee may, in its sole
discretion, after an Option is granted, extend the maximum term of the Option to
a date not later than the earlier of (i) the end of the Option Period of the
Options or (ii) the tenth anniversary of the Grant Date. Any such extension of
an Option pursuant to this subsection will comply with the requirements of Code
Section 409A, if applicable.

5.5. Exercisability of Options. Subject to the provisions of Section 12 and this
Section 6, all Options granted under this Plan will be exercisable at such
times, under such terms and subject to such restrictions and conditions as the
Committee determines in its sole discretion and as specified in the Award
Agreements to which the Options relate. After an Option is granted, the
Committee, in its sole discretion, may accelerate the exercisability of the
Option.

5.6. Method of Exercise. Subject to the provisions of this Section 6 and the
applicable Award Agreement, a Participant may exercise an Option, in whole or in
part, at any time during the Option Period to which the Option relates by giving
written notice to the Company of exercise on a form provided by the Committee
(if available). Such notice will specify the number of Shares subject to the
Option to be purchased and will be accompanied by payment in full of the total
Exercise Price by cash or check or such other form of payment as the Company may
accept. If permitted by the applicable Award Agreement, payment in full or in
part may also be made by:

(a) Delivering Shares already owned by the Participant that have a total Fair
Market Value on the date of such delivery equal to the total Exercise Price;

(b) The delivery of cash by a broker-dealer as a Cashless Exercise, if permitted
by the Committee and the applicable Award Agreement;

(c) Reducing the number of Shares issued upon the exercise by the largest number
of whole Shares that has a Fair Market Value that does not exceed the aggregate
exercise price for the Shares exercised under this method. Shares will no longer
be outstanding under an Option (and will therefore not thereafter be
exercisable) following the exercise of such Option to the extent of (i) Shares
used to pay the exercise price of an Option under the “net exercise” method
discussed in this Section 6.6(c), (ii) Shares actually delivered to the
Participant as a result of such exercise and (iii) any Shares withheld for
purposes of tax withholding; or

 

13

--------------------------------------------------------------------------------

(d) Any combination of the foregoing.

If payment of the Exercise Price of an Option is made in whole or in part in the
form of Restricted Stock, a number of the Shares to be received upon such
exercise equal to the number of shares of Restricted Stock used for payment of
the Exercise Price will be subject to the same forfeiture restrictions or
deferral limitations to which the Restricted Stock was subject, unless otherwise
determined by the Committee in its sole discretion.

No Shares will be issued until full payment therefor has been made. Subject to
any forfeiture restrictions or deferral limitations that may apply if an Option
is exercised using Restricted Stock, a Participant will have all of the rights
of a shareholder of the Company holding the class of Shares subject to the
Option (including, if applicable, the right to vote the Shares) when the
Participant has given written notice of exercise, has paid the total Exercise
Price, and such Shares have been recorded on the Company’s official shareholder
records (or the records of its transfer agents or registrars) as having been
issued and transferred to the Participant.

5.7. Restrictions on Share Transferability. In addition to the restrictions
imposed by Section 14.7, the Committee may impose such restrictions on any
Shares acquired pursuant to the exercise of an Option as it may deem advisable
or appropriate in its sole discretion, including, but not limited to,
restrictions related to applicable Federal and state securities laws and the
requirements of the NASDAQ Stock Market or any other national securities
exchange or market on which Shares are then listed or traded.

5.8. Termination by Reason of Death, Disability or Retirement. Unless otherwise
provided in the Award Agreement or determined by the Committee in its sole
discretion, if a Participant incurs a Termination of Service due to death,
Disability or Retirement, any unexpired and unexercised Options held by such
Participant will thereafter be fully exercisable until the expiration of the
Option Period.

5.9. Other Termination. Unless otherwise provided in the Award Agreement or
determined by the Committee in its sole discretion, if a Participant incurs a
Termination of Service that is involuntary on the part of the Participant (but
is not due to death or Disability and is not with Cause) or is voluntary on the
part of the Participant (but is not due to Retirement), any Options held by such
Participant will terminate on the Termination of Service, except that such
Options, to the extent exercisable at the time of Termination of Service, may be
exercised until the expiration of the shorter of the following two periods:
(a) the 30 consecutive-day period commencing on the date of Termination of
Service, or (b) the date on which the Option Period expires. If a Participant
incurs a Termination of Service which is with Cause, all of his Options, whether
or not exercisable, will terminate immediately as of the date of such
Termination of Service.

5.10. Special Provision for Incentive Stock Options. Notwithstanding any other
provision of this Plan to the contrary, an Incentive Stock Option will not be
exercisable more than (a) three months after the Participant’s Termination of
Service for any reason other than Disability, or (b) one year after the
Participant’s Termination of Service by reason of Disability.

 

14

--------------------------------------------------------------------------------

SECTION 6

STOCK APPRECIATION RIGHTS

6.1. Grant of SARs. Subject to the terms and conditions of this Plan, the
Committee, at any time and from time to time, may grant SARs to any Employee or
Non-employee Director in such amounts as the Committee, in its sole discretion,
determines. The Committee, in its sole discretion, may grant Affiliated SARs,
Freestanding SARs, Tandem SARs or any combination thereof.

6.1.1. Number of Shares. Subject to the limitations of Section 4, the Committee
will have complete discretion to determine the number of SARs granted to any
Participant.

6.1.2. Exercise Price and Other Terms. The Committee, subject to the provisions
of this Plan, will have complete discretion to determine the terms and
conditions of SARs granted under this Plan; provided, however, the Exercise
Price of a Freestanding SAR will be not less than 100 percent of the Fair Market
Value of a Share on the Grant Date and the Exercise Price of Tandem or
Affiliated SARs will be equal to the Exercise Price of the Option to which such
SAR relates.

6.2. Exercise of Tandem SARs. Tandem SARs may be exercised with respect to all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR may
be exercised only with respect to the Shares to which its related Option is then
exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option, the following requirements will apply: (a) the Tandem
SAR will expire not later than the date on which the underlying Incentive Stock
Option expires; (b) the value of the payout with respect to the Tandem SAR will
be no more than 100 percent of the difference between the Exercise Price of the
underlying Incentive Stock Option and 100 percent of the Fair Market Value of
the Shares subject to the underlying Incentive Stock Option at the time the
Tandem SAR is exercised; and (c) the Tandem SAR will be exercisable only when
the Fair Market Value of the Shares subject to the Incentive Stock Option to
which the Tandem SAR relates exceeds the Exercise Price of the Incentive Stock
Option.

6.3. Exercise of Affiliated SARs. An Affiliated SAR will be deemed to be
exercised upon the exercise of the Option to which the Affiliated SAR relates.
The deemed exercise of an Affiliated SAR will not reduce the number of Shares
subject to the related Option.

6.4. Exercise of Freestanding SARs. Freestanding SARs will be exercisable on
such terms and conditions as the Committee, in its sole discretion, specifies in
the applicable Award Agreement.

 

15

--------------------------------------------------------------------------------

6.5. SAR Award Agreement. Each SAR will be evidenced by an Award Agreement that
specifies the exercise price, the expiration date of the SAR, the number of
SARs, any conditions on the exercise of the SAR and such other terms and
conditions as the Committee, in its sole discretion, determines. The Award
Agreement will also specify whether the SAR is an Affiliated SAR, Freestanding
SAR, Tandem SAR or a combination thereof.

6.6. Expiration of SARs. Each SAR granted under this Plan will expire upon the
date determined by the Committee, in its sole discretion, as set forth in the
applicable Award Agreement; provided, however, that no SAR will be exercisable
later than the tenth anniversary of its Grant Date. Notwithstanding the
foregoing, the terms and provisions of Section 6.4 will also apply to Affiliated
and Tandem SARs.

6.7. Payment of SAR Amount. Upon exercise of a SAR, a Participant will be
entitled to receive payment from the Company in an amount determined by
multiplying:

(a) The positive difference between the Fair Market Value of a Share on the date
of exercise and the exercise price; by

(b) The number of Shares with respect to which the SAR is exercised.

At the sole discretion of the Committee, the payment may be in cash, in Shares
which have a Fair Market Value equal to the cash payment calculated under this
Section 7.7, or in a combination of cash and Shares.

6.8. Termination of SAR. An Affiliated or Tandem SAR will terminate at such time
as the Option to which such SAR relates terminates. A Freestanding SAR will
terminate at the time provided in the applicable Award Agreement.

SECTION 7

RESTRICTED STOCK

7.1. Grant of Restricted Stock. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to any Employee or Non-employee Director in such amounts as the
Committee, in its sole discretion, determines. Subject to the limitations of
Section 4, the Committee, in its sole discretion, will determine the number of
Shares of Restricted Stock to be granted to each Participant.

7.2. Restricted Stock Award Agreement. Each Award of Restricted Stock will be
evidenced by an Award Agreement that specifies the Period of Restriction, the
number of Shares granted and such other terms and conditions as the Committee,
in its sole discretion, determines. Unless the Committee in its sole discretion
determines otherwise, Shares of Restricted Stock will be held by the Company,
and will not be delivered to any Participant until the end of the applicable
Period of Restriction.

7.3. Transferability. Except as provided in Section 6.6, Section 14.7, and this
Section 8, Shares of Restricted Stock may not be sold, transferred, assigned,
margined, encumbered, gifted, bequeathed, alienated, hypothecated, pledged or
otherwise disposed of, whether by operation of law, whether voluntarily or
involuntarily or otherwise, until the end of the applicable Period of
Restriction.

 

16

--------------------------------------------------------------------------------

7.4. Other Restrictions. The Committee, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or
appropriate in accordance with this Section 8.

7.4.1. General Restrictions. The Committee may impose restrictions on Restricted
Stock based upon any of the following criteria: (a) the achievement of specific
Company-wide, Affiliate-based, Subsidiary-based, divisional, individual
Participant or other Performance Goals, (b) applicable Federal or state
securities laws, or (c) any other basis determined by the Committee in its sole
discretion; provided, however, except for (i) Awards of deferred Shares received
in lieu of other Awards, (ii) Awards made to Employees to replace their awards
from a prior employer that were forfeited upon the acquisition of the prior
employer by the Company, and (iii) the Participant’s death, Retirement or
Disability, the required period of service for full vesting will be not less
than three years. Notwithstanding the foregoing, any performance-based Awards of
Restricted Stock must be held for at least one-year before they can be earned.

7.4.2. Section 162(m) Performance Restrictions. Notwithstanding any other
provision of this Section 8.4.2 to the contrary, for purposes of qualifying
grants of Restricted Stock as “performance-based compensation” to Covered
Employees under Code Section 162(m), the Committee will establish restrictions
based upon the achievement of Performance Goals. The specific targets under the
Performance Goals that must be satisfied for the Period of Restriction to lapse
or terminate will be set by the Committee on or before the latest date
permissible to enable the Restricted Stock to qualify as “performance-based
compensation” under Code Section 162(m). The Performance Goals for a Covered
Employee under this Section 8.4.2 will be one or more of the business criteria
listed under Section 1.3.31. In granting Restricted Stock that is intended to
qualify as “performance-based compensation” under Code Section 162(m), the
Committee will follow any procedures determined by it in its sole discretion
from time to time to be necessary, advisable or appropriate to ensure
qualification of the Restricted Stock as “performance-based compensation” under
Code Section 162(m).

7.4.3. Legend on Certificates. The Committee, in its sole discretion, may
require the placement of a legend on certificates representing Shares of
Restricted Stock to give appropriate notice of such restrictions. For example,
the Committee may determine that some or all certificates representing Shares of
Restricted Stock will bear the following legend:

“THE SALE, PLEDGE OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS
CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY OR BY OPERATION OF LAW, IS SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER UNDER FEDERAL AND STATE SECURITIES LAWS AND
UNDER THE HORIZON BANCORP 2013 OMNIBUS EQUITY INCENTIVE PLAN, AS SET FORTH IN AN
AWARD AGREEMENT EXECUTED THEREUNDER. A COPY OF SUCH PLAN AND SUCH AWARD
AGREEMENT MAY BE OBTAINED FROM THE CORPORATE SECRETARY OF HORIZON BANCORP.”

 

17

--------------------------------------------------------------------------------

7.5. Removal of Restrictions. Except as otherwise provided in this Section 8,
Shares of Restricted Stock covered by each Restricted Stock grant made under
this Plan will be released to a Participant as soon as practicable after the end
of the applicable Period of Restriction. Except in the case of grants of
Restricted Stock to Covered Employees which are intended to qualify as
“performance-based compensation” under Code Section 162(m) (the vesting of which
cannot be accelerated except as provided in Section 12.1), the Committee, in its
sole discretion, may accelerate the time at which any restrictions will lapse or
remove any restrictions. After the end of the applicable Period of Restriction,
the Participant will be entitled to have any restrictive legend or legends
placed on the Shares under Section 8.4.3 removed from his or her Share
certificate.

7.6. Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares, unless the applicable Award Agreement provides
otherwise.

7.7. Return of Restricted Stock to Company. On the date set forth in the
applicable Award Agreement, the Restricted Stock for which restrictions have not
lapsed by the last day of the Period of Restriction will revert to the Company
and thereafter will be available for the grant of new Awards under this Plan.

7.8. Termination of Service. Unless otherwise provided in an Award Agreement or
determined by the Committee in its sole discretion, in the event of a
Participant’s Termination of Service due to death, Disability or Retirement
during the Period of Restriction, the restrictions on his Shares of Restricted
Stock will lapse and the Participant (or his or her Beneficiary) will, on the
date of such Termination of Service, be fully vested in the Restricted Stock.
Unless otherwise provided in an Award Agreement or this Plan, in the event of a
Participant’s Termination of Service for any reason during the Period of
Restriction other than a Termination of Service due to death, Disability or
Retirement, all Shares of Restricted Stock still subject to restriction will be
forfeited by the Participant and thereafter be available for the grant of new
Awards under this Plan; provided, however, that the Committee will have the sole
discretion to waive, in whole or in part, subject to the restrictions of
Section 8.4.1, any or all remaining restrictions with respect to any or all of
such Participant’s Shares of Restricted Stock. Notwithstanding any other
provision of this Section 8 to the contrary, in the case of grants of Restricted
Stock to Covered Employees that the Committee intends to qualify as
“performance-based compensation” under Code Section 162(m) (the vesting of which
cannot be accelerated, except as provided in Section 12.1), no shares of
Restricted Stock will become vested unless the applicable Performance Goals have
first been met; provided, further, that the Committee will not waive any
restrictions with respect to such Restricted Stock. If the vesting of shares of
Restricted Stock is accelerated after the applicable Performance Goals have been
met, the amount of Restricted Stock distributed will be discounted by the
Committee to reasonably reflect the time value of money in connection with such
early vesting.

 

18

--------------------------------------------------------------------------------

SECTION 8

PERFORMANCE UNITS AND PERFORMANCE SHARES

8.1. Grant of Performance Units/Shares. Subject to the terms and provisions of
this Plan, the Committee, at any time and from time to time, may grant
Performance Units or Performance Shares to any Employee or Non-employee Director
in such amounts as the Committee, in its sole discretion, determines. Subject to
the limitations of Section 4, the Committee will have complete discretion in
determining the number of Performance Units or Performance Shares granted to
each Participant.

8.2. Value of Performance Units/Shares. Each Performance Unit will have an
initial value that is established by the Committee on or before the Grant Date.
Each Performance Share will have an initial value equal to the Fair Market Value
of a Share on the Grant Date.

8.3. Performance Goals and Other Terms. The Committee will set Performance Goals
in its sole discretion which, depending on the extent to which they are met,
will determine the number or value of Performance Units or Performance Shares,
or both, that will be paid to the Participant. Each Award of Performance Units
or Performance Shares will be evidenced by an Award Agreement that specifies the
number of Performance Units or Performance Shares, the Performance Period, the
Performance Goals and such other terms and conditions as the Committee, in its
sole discretion, determines. Notwithstanding the foregoing, any
performance-based Awards of Performance Units or Performance Shares must be held
for at least one-year before they can be earned.

8.3.1. General Performance Goals. The Committee may set Performance Goals based
upon (a) the achievement of Company-wide, Affiliate-based, Subsidiary-based,
divisional, individual Participant or other Performance Goals; (b) in either
absolute terms or relative to the performance of one or more comparable
companies or an index which includes several companies; (c) applicable Federal
or state securities laws; or (d) any other basis determined by the Committee in
its sole discretion. Measurement of Performance Goals may exclude impact of
charges for restructuring, discontinued operations, extraordinary items, other
unusual or non-recurring items and the cumulative effects of accounting changes,
each as defined by generally accepted accounting principles.

8.3.2. Code Section 162(m) Performance Objectives. Notwithstanding any other
provision of this Section 9.3.2 to the contrary, for purposes of qualifying
grants of Performance Units or Performance Shares to Covered Employees as
“performance-based compensation” under Code Section 162(m), the Committee will
establish the specific targets under the Performance Goals applicable to
Performance Units or Performance Shares. Such targets under the Performance
Goals will be set by the Committee on or before the latest date permissible to
enable the Performance Units or Performance Shares, as the case may be, to
qualify as

 

19

--------------------------------------------------------------------------------

“performance-based compensation” under Code Section 162(m). The Performance
Goals for a Covered Employee under this Section 9.3.2 will be one or more of the
business criteria listed under Section 1.3.31. In granting Performance Units or
Performance Shares to Covered Employees which are intended to qualify as
“performance-based compensation” under Code Section 162(m), the Committee will
follow any procedures determined by it from time to time to be necessary or
appropriate in its sole discretion to ensure qualification of the Performance
Units or Performance Shares, as the case may be, as “performance-based
compensation” under Code Section 162(m).

8.4. Earning of Performance Units/Shares. After the applicable Performance
Period has ended, the holder of Performance Units or Performance Shares will be
entitled to receive those Performance Units or Performance Shares, as the case
may be, earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the applicable Performance Goals have been
achieved. Except in the case of Performance Goals applicable to Performance
Units or Performance Shares granted to Covered Employees which are intended to
qualify as “performance-based compensation” under Code Section 162(m) (which
cannot be reduced or waived except as provided in Section 12.1), after the grant
of a Performance Unit or Performance Share, the Committee, in its sole
discretion, may reduce or waive any Performance Goals or related business
criteria applicable to such Performance Unit or Performance Share.

8.5. Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units or Performance Shares will be made as soon as practicable in
the calendar year after the end of the applicable Performance Period. The
Committee, in its sole discretion, may pay earned Performance Units or
Performance Shares in the form of cash, in Shares (which have an aggregate Fair
Market Value equal to the value of the earned Performance Units or Performance
Shares, as the case may be, determined as of the last day of the applicable
Performance Period) or a combination thereof.

8.6. Cancellation of Performance Units/Shares. On the date set forth in the
applicable Award Agreement, all Performance Units or Performance Shares which
have not been earned or vested will be forfeited and thereafter be available for
the grant of new Awards under this Plan.

8.7. Termination of Service. Unless otherwise provided in an Award Agreement or
determined by the Committee in its sole discretion, in the event of a
Participant’s Termination of Service due to death, Disability or Retirement
during a Performance Period, the Participant (or his Beneficiary) will receive
the earned Performance Units or Performance Shares which relate to such
Performance Period. Unless otherwise provided in an Award Agreement or
determined by the Committee in its sole discretion, in the event of a
Participant’s Termination of Service for any other reason, all Performance Units
or Performance Shares will be forfeited and thereafter be available for the
grant of new Awards under this Plan. Distribution of earned Performance Units or
Performance Shares will be made at the same time payments are made to
Participants who did not incur a Termination of Service during the applicable
Performance Period. Notwithstanding any other provision of this Section 9 to the
contrary, in the case of Awards of Performance Units or Performance Shares to
Covered Employees that the Committee intends to qualify as performance-based
compensation” under Code Section 162(m) (the vesting of which cannot be
accelerated except as provided in Section 12.1), no Performance Units or
Performance Shares will become vested until the applicable Performance Goals
have been met.

 

20

--------------------------------------------------------------------------------

SECTION 9

AMENDMENT, TERMINATION, AND DURATION

9.1. Amendment, Suspension, or Termination. The Board may supplement, amend,
alter or discontinue this Plan in its sole discretion at any time and from time
to time, but no supplement, amendment, alteration or discontinuation will be
made which would impair the rights of a Participant under an Award without the
Participant’s consent, except that any supplement, amendment, alteration or
discontinuation may be made to (a) avoid a material charge or expense to the
Company or an Affiliate, (b) cause this Plan to comply with applicable law, or
(c) permit the Company or an Affiliate to claim a tax deduction under applicable
law. In addition, subject to the provisions of this Section 10.1, the Board, in
its sole discretion at any time and from time to time, may supplement, amend,
alter or discontinue this Plan without the approval of the Company’s
shareholders (a) to the extent such approval is not required by applicable law
or the terms of a written agreement, and (b) so long as any such amendment or
alteration does not increase the number of Shares subject to this Plan (other
than pursuant to Section 4.6) or increase the maximum number of Options, SARs,
Shares of Restricted Stock, Performance Units or Performance Shares that the
Committee may award to an individual Participant under this Plan. The Committee
may supplement, amend, alter or discontinue the terms of any Award theretofore
granted, prospectively or retroactively, on the same conditions and limitations
(and exceptions to limitations) as apply to the Board under the foregoing
provisions of this Section 10.1, and further subject to any approval or
limitations the Board may impose. Notwithstanding the foregoing, in no event may
the Board or the Committee amend the repricing provisions of the Plan or any
Award without approval of the Company’s shareholders.

9.2. Duration of this Plan and Shareholder Approval. This Plan will be effective
on the Effective Date and, subject to Section 10.1 (regarding the Board’s right
to supplement, amend, alter or discontinue this Plan), will remain in effect
until the tenth anniversary thereof. No Option will be exercised and no other
Award will be exercised or otherwise paid hereunder until this Plan has been
approved by the holders of at least a majority of the outstanding Shares
represented in person or by proxy at a meeting at which approval of this Plan is
considered; and provided further, no Incentive Stock Option may be granted under
this Plan after the tenth anniversary of the Effective Date.

SECTION 10

TAX WITHHOLDING

10.1. Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to the payment or exercise of an Award, the Company will have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy all Federal, state and local income and
employment taxes required by applicable law to be withheld with respect to the
payment or exercise of such Award. In no event will any amount withheld be in an
amount that would require the Company to incur accounting charges.

 

21

--------------------------------------------------------------------------------

10.2. Withholding Arrangements. The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy a tax withholding obligation, in whole or in part, by
(a) electing to have the Company withhold otherwise deliverable Shares (except
in the case of exercises of Incentive Stock Options), or (b) delivering to the
Company Shares then owned by the Participant having a Fair Market Value equal to
the amount required to be withheld. The amount of the withholding requirement
will be deemed to include any amount that the Committee agrees may be withheld
at the time any such election is made, not to exceed, in the case of income tax
withholding, the amount determined, based upon minimum statutory requirements,
by using the maximum federal, state or local marginal income tax rates
applicable to the Participant with respect to the Award on the date the amount
of income tax to be withheld is determined. The Fair Market Value of the Shares
to be withheld or delivered will be determined as of the date that the taxes are
required to be withheld.

SECTION 11

CHANGE IN CONTROL

11.1. Change in Control.

11.1.1. Continuation, Assumption or Replacement of Awards. In the event of a
Change in Control, the surviving or successor entity (or its parent corporation)
may continue, assume or replace Awards outstanding as of the date of the Change
in Control (with such adjustments as may be required or permitted by
Section 3.6), and such Awards or replacements therefore shall remain outstanding
and be governed by their respective terms, subject to Section 11.1.4. A
surviving or successor entity may elect to continue, assume or replace only some
Awards or portions of Awards. For purposes of this Section 11.1.1, an Award
shall be considered assumed or replaced if, in connection with the Change in
Control and in a manner consistent with Code Sections 409A and 424, either
(a) the contractual obligations represented by the Award are expressly assumed
by the surviving or successor entity (or its parent corporation) with
appropriate adjustments to the number and type of securities subject to the
Award and the exercise price thereof that preserves the intrinsic value of the
Award existing at the time of the Change in Control, or (b) the Participant has
received a comparable equity-based award that preserves the intrinsic value of
the Award existing at the time of the Change in Control and provides for a
vesting or exercisability schedule that is the same as or more favorable to the
Participant.

11.1.2. Acceleration of Awards. If and to the extent that outstanding Awards
under the Plan are not continued, assumed or replaced in connection with a
Change in Control, then (a) outstanding Options and Stock Appreciation Rights
issued to the Participant that are not yet fully exercisable shall immediately
become exercisable in full and shall remain exercisable in accordance with their
terms, (b) all unvested Restricted Stock Awards, Stock Unit Awards and
Performance Awards will become immediately fully vested and non-forfeitable; and
(c) any Performance Criteria applicable to Restricted Stock Awards, Stock Unit
Awards and Performance Awards will be deemed to have been satisfied at the
target level of performance specified in connection with the applicable Award.

 

22

--------------------------------------------------------------------------------

11.1.3. Payment for Awards. If and to the extent that outstanding Awards under
the Plan are not continued, assumed or replaced in connection with a Change in
Control, then the Committee may terminate some or all of such outstanding
Awards, in whole or in part, as of the effective time of the Change in Control
in exchange for payments to the holders as provided in this Section 11.1.3. The
Committee will not be required to treat all Awards similarly for purposes of
this Section 11.1.3. The payment for any Award or portion thereof terminated
shall be in an amount equal to the excess, if any, of (a) the fair market value
(as determined in good faith by the Committee) of the consideration that would
otherwise be received in the Change in Control for the number of Shares subject
to the Award or portion thereof being terminated, or, if no consideration is to
be received by the Company’s stockholders in the Change in Control, the Fair
Market Value of such number of shares immediately prior to the effective date of
the Change in Control, over (b) the aggregate exercise price (if any) for the
Shares subject to the Award or portion thereof being terminated. If there is no
excess, the Award may be terminated without payment. Any payment shall be made
in such form, on such terms and subject to such conditions as the Committee
determines in its discretion, which may or may not be the same as the form,
terms and conditions applicable to payments to the Company’s stockholders in
connection with the Change in Control, and may include subjecting such payments
to vesting conditions comparable to those of the Award surrendered.

11.1.4. Termination after a Change in Control. If and to the extent that Awards
are continued, assumed or replaced under the circumstances described in
Section 11.1.1, and if within two years after the Change in Control a
Participant experiences an involuntary Termination of Employment or other
service for reasons other than Cause, then (a) outstanding Options and Stock
Appreciation Rights issued to the Participant that are not yet fully exercisable
shall immediately become exercisable in full and shall remain exercisable in
accordance with their terms, (b) all unvested Restricted Stock Awards,
Performance Units and Performance Shares will become immediately fully vested
and non-forfeitable; and (c) any Performance Criteria applicable to Restricted
Stock Awards, Performance Units and Performance Shares will be deemed to have
been satisfied at the target level of performance specified in connection with
the applicable Award.

11.2. Definition. For purposes of Section 11.1, a “Change in Control” of the
Company will be deemed to have occurred if the conditions or events set forth in
any one or more of the following subsections occur:

(a) The consummation of any merger, consolidation or similar transaction which
involves the Company and in which persons who are the shareholders of the
Company immediately prior to the transaction own, immediately after the
transaction, shares of the surviving or combined entity which possess voting
rights equal to or less than 50 percent of the voting rights of all shareholders
of such entity, determined on a fully diluted basis;

(b) Any sale, lease, exchange, transfer or other disposition of all or any
substantially all of the consolidated assets of the Company;

 

23

--------------------------------------------------------------------------------

(c) Any tender, exchange, sale or other disposition (other than disposition of
the stock of the Company or Horizon Bank in connection with bankruptcy,
insolvency, foreclosure, receivership or other similar transactions) or purchase
(other than purchases by the Company or any Company sponsored employee benefit
plan, or purchases by members of the Board of Directors of the Company or any
subsidiary) of shares of stock which represent more than 25 percent of the
voting power of the Company or Horizon Bank;

(d) During any period of two consecutive years, individuals who at the date of
the adoption of the Plan constitute the Board cease for any reason to constitute
at least a majority thereof, unless the election of each director at the
beginning of the period has been approved by directors representing at least a
majority of the directors then in office;

Notwithstanding the foregoing, a Change in Control of the Company (i) will not
occur as a result of the issuance of stock by the Company in connection with any
public offering of its stock; (ii) will not be deemed to have occurred with
respect to any transaction unless such transaction has been approved or shares
have been tendered by a majority of the shareholders who are not Section 16
Persons; or (iii) will not occur due to stock ownership by the Horizon Bancorp
Employee Stock Ownership Plan Trust Agreement, which forms a part of the Horizon
Bancorp Employee Stock Ownership Plan, the Horizon Bancorp Employee’s Thrift
Plan Trust Agreement, which forms a part of the Horizon Bancorp Employee’s
Thrift Plan, or any other employee benefit plan.

SECTION 12

LEGAL CONSTRUCTION

12.1. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also includes the feminine, the plural includes the
singular, and the singular includes the plural.

12.2. Severability. In the event any provision of this Plan is held illegal or
invalid for any reason, the illegality or invalidity will not affect the
remaining parts of this Plan, and this Plan will be construed and enforced as if
the illegal or invalid provision had never been included herein.

12.3. Requirements of Law. The grant of Awards and the issuance of Shares under
this Plan will be subject to all applicable statutes, laws, rules and
regulations and to such approvals and requirements as may be required from time
to time by any governmental authorities or any securities exchange or market on
which the Shares are then listed or traded.

12.4. Governing Law. Except to the extent preempted by the Federal laws of the
United States of America, this Plan and all Award Agreements will be construed
in accordance with and governed by the laws of the State of Indiana without
giving effect to any choice or conflict of law provisions, principles or rules
(whether of the state of Indiana or any other jurisdiction) that would cause the
application of any laws of any jurisdiction other than the state of Indiana.

 

24

--------------------------------------------------------------------------------

12.5. Headings. The descriptive headings and sections of this Plan are provided
herein for convenience of reference only and will not serve as a basis for
interpretation or construction of this Plan.

12.6. Mistake of Fact. Any mistake of fact or misstatement of facts will be
corrected when it becomes known by a proper adjustment to an Award or Award
Agreement.

12.7. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.

12.8. 409A Compliance. It is intended the Plan and all Awards hereunder be
administered in a manner that will comply with, or comply with an exemption
from, as applicable, the requirements of Code Section 409A, including any final
regulations guidance issued by the Secretary of the Treasury and the Internal
Revenue Service. The Committee is authorized to adopt rules or regulations
deemed necessary or appropriate to qualify for an exemption from or to comply
with the requirements of Code Section 409A. Notwithstanding anything in this
Section to the contrary, with respect to any Award subject to Code Section 409A,
no amendment to or payment under such Award will be made unless permitted under
Code Section 409A and the regulations or rulings issued thereunder. Without
limiting the generality of the foregoing, if any amount shall be payable with
respect to any Award hereunder as a result of a Participant’s Termination from
Service at such time as the Participant is a “specified employee” (as defined
for purposes of Code Section 409A) and such amount is subject to the provisions
of Code Section 409A, then no payment shall be made, except as permitted under
Code Section409A prior to the first day of the seventh calendar month beginning
after the participants’ separation from service (or the date of his or her
earlier death).

Notwithstanding anything in the Plan to the contrary, none of the Company, the
Committee nor any other person involved in the administration of this Plan shall
in any way be responsible for ensuring the exemption of any Award from, or
compliance by any Award with, the requirements of Code Section 409A. By
accepting an Award under this Plan, each Participant acknowledges that neither
the Company, the Committee nor any other person involved with the administration
of this Plan has any duty or obligation to design or administer the Plan or
Awards granted thereunder in an manner that minimizes a Participant’s tax
liabilities, including the avoidance of additional tax liabilities under Code
Section 409A.

SECTION 13

MISCELLANEOUS

13.1. No Effect on Employment or Service. Neither this Plan nor the grant of any
Awards or the execution of any Award Agreement will confer upon any Participant
any right to continued employment by the Company, retention on or nomination to
the Board or will interfere with or limit in any way the right of the Company to
terminate any Employee’s employment or service at any time, with or without
Cause, or removal from the Board. Employment with the Company and its Affiliates
is on an at-will basis only, unless otherwise provided by a written employment
or severance agreement, if any, between the Employee and the Company or an

 

25

--------------------------------------------------------------------------------

Affiliate, as the case may be. If there is any conflict between the provisions
of this Plan and an employment or severance agreement between a Participant and
the Company, the provisions of such employment or severance agreement will
control, including, but not limited to, the vesting and forfeiture of any
Awards.

13.2. No Company Obligation. Unless required by applicable law, the Company, an
Affiliate, the Board of Directors and the Committee will not have any duty or
obligation to affirmatively disclose material information to a record or
beneficial holder of Shares or an Award, and such holder will have no right to
be advised of any material information regarding the Company or any Affiliate at
any time prior to, upon or in connection with the receipt, exercise or
distribution of an Award. In addition, the Company, an Affiliate, the Board, the
Committee and any attorneys, accountants, advisors or agents for any of the
foregoing will not provide any advice, counsel or recommendation to any
Participant with respect to, without limitation, any Award, any exercise of an
Option or any tax consequences relating to an Award.

13.3. Participation. No Employee or Non-employee Director will have the right to
be selected to receive an Award under this Plan or, having been selected, to be
selected to receive a future Award. Participation in the Plan will not give any
Participant any right or claim to any benefit under this Plan, unless such right
or claim has specifically accrued under the terms of this Plan.

13.4. Liability and Indemnification. No member of the Board, the Committee or
any officer or employee of the Company or any Affiliate will be personally
liable for any action, failure to act, decision or determination made in good
faith in connection with this Plan. By participating in this Plan, each
Participant agrees to release and hold harmless the Company and its Affiliates
(and their respective directors, officers and employees) and the Committee from
and against any tax liability, including, but not limited to, interest and
penalties, incurred by the Participant in connection with his receipt of Awards
under this Plan and the deferral, payment and exercise thereof. Each person who
is or was a member of the Committee, or of the Board, will be indemnified and
held harmless by the Company against and from (a) any loss, cost, liability or
expense (including, but not limited to, attorneys’ fees) that may be imposed
upon or reasonably incurred by him in connection with or resulting from any
claim, action, suit or proceeding to which he may be a party or in which he may
be involved by reason of any action taken or failure to act under this Plan or
any Award Agreement; and (b) any and all amounts paid by him in settlement
thereof, with the Company’s prior written approval, or paid by him in
satisfaction of any judgment in any such claim, action, suit or proceeding
against him; provided, however, that he will give the Company an opportunity, at
the Company’s expense, to handle and defend such claim, action, suit or
proceeding before he undertakes to handle and defend the same on his own behalf.
The foregoing right of indemnification is exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Articles of Incorporation or By-Laws, by contract, as a matter of law or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

13.5. Successors. All obligations of the Company under this Plan, with respect
to Awards granted hereunder, are binding on any successor to the Company,
whether or not the existence of such successor is the result of a Change in
Control of the Company.

 

26

--------------------------------------------------------------------------------

The Company will not, and will not permit its Affiliates to, recommend,
facilitate or agree or consent to a transaction or series of transactions which
would result in a Change in Control of the Company unless and until the person
or persons or entity or entities acquiring control of the Company as a result of
such Change in Control agree(s) to be bound by the terms of this Plan insofar as
it pertains to Awards theretofore granted and agrees to assume and perform the
obligations of the Company and its Successor (as defined in Section 4.6.2)
hereunder.

13.6. Beneficiary Designations. Any Participant may designate, on such forms as
may be provided by the Committee for such purpose, a Beneficiary to whom any
vested but unpaid Award will be paid in the event of the Participant’s death.
Each such designation will revoke all prior designations by the Participant and
will be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant’s death will be paid to the Participant’s spouse, if
any, and the to the Participant’s estate and, subject to the terms of this Plan
and of the applicable Award Agreement, any unexercised vested Award may be
exercised by the spouse, if any, and if not by the administrator or executor of
the Participant’s estate.

13.7. Nontransferability of Awards. Except as provided in Sections 14.7.1 and
14.7.2, no Award under this Plan can be sold, transferred, assigned, margined,
encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise
disposed of, whether by operation of law, whether voluntarily or involuntarily
or otherwise, other than by will or by the laws of descent and distribution. In
addition, no Award under this Plan will be subject to execution, attachment or
similar process. Any attempted or purported transfer of an Award in
contravention of this Plan or an Award Agreement will be null and void ab initio
and of no force or effect whatsoever. All rights with respect to an Award
granted to a Participant will be exercisable during his lifetime only by the
Participant.

13.7.1. Limited Transfers of Nonqualified Stock Options. Notwithstanding the
foregoing, the Committee may, in its sole discretion, permit the transfer of
Nonqualified Stock Options by a Participant to (a) the Participant’s spouse, any
children or lineal descendants of the Participant or the Participant’s spouse,
or the spouse(s) of any such children or lineal descendants (“Immediate Family
Members”), (b) a trust or trusts for the exclusive benefit of Immediate Family
Members, or (c) a partnership or limited liability company in which the
Participant and/or the Immediate Family Members are the only equity owners,
(collectively, “Eligible Transferees”); provided, however, in the event the
Committee permits the transferability of Nonqualified Stock Options granted to
the Participant, the Committee may subsequently, in its sole discretion, amend,
modify, revoke or restrict, without the prior consent, authorization or
agreement of the Eligible Transferee, the ability of the Participant to transfer
Nonqualified Stock Options that have not been already transferred to an Eligible
Transferee. An Option that is transferred to an Immediate Family Member will not
be transferable by such Immediate Family Member, except for any transfer by such
Immediate Family Member’s will or by the laws of descent and distribution upon
the death of such Immediate Family Member. Incentive Stock Options granted under
this Plan are not transferable pursuant to this Section 14.7.

 

27

--------------------------------------------------------------------------------

13.7.2. Exercise by Eligible Transferees. In the event that the Committee, in
its sole discretion, permits the transfer of Nonqualified Stock Options by a
Participant to an Eligible Transferee under Section 14.7.1, the Options
transferred to the Eligible Transferee must be exercised by such Eligible
Transferee and, in the event of the death of such Eligible Transferee, by such
Eligible Transferee’s executor or administrator only in the same manner, to the
same extent and under the same circumstances (including, but not limited to, the
time period within which the Options must be exercised) as the Participant could
have exercised such Options. The Participant, or in the event of his death, the
Participant’s estate, will remain liable for all federal, state, local and other
taxes applicable upon the exercise of a Nonqualified Stock Option by an Eligible
Transferee.

13.8. No Rights as Shareholder. Except to the limited extent provided in
Sections 4.5 and 8.6, no Participant (or any Beneficiary) will have any of the
rights or privileges of a shareholder of the Company with respect to any Shares
issuable pursuant to an Award (or the exercise thereof), unless and until
certificates representing such Shares have been recorded on the Company’s
official shareholder records (or the records of its transfer agents or
registrars) as having been issued and transferred to the Participant (or his or
her Beneficiary).

13.9. Mitigation of Excise Tax. Subject to any other agreement providing for the
Company’s indemnification of the tax liability described herein, if any payment
or right accruing to a Participant under this Plan (without the application of
this Section 14.9), either alone or together with other payments or rights
accruing to the Participant from the Company or an Affiliate would constitute a
“parachute payment,” as defined in Code Section 280G and regulations thereunder,
such payment or right will be reduced to the largest amount or greatest right
that will result in no portion of the amount payable or right accruing under
this Plan being subject to an excise tax under Code Section 4999 or being
disallowed as a deduction under Code Section 280G. The determination of whether
any reduction in the rights or payments under this Plan is to apply will be made
by the Committee in good faith after consultation with the Participant, and such
determination will be conclusive and binding on the Participant. The Participant
will cooperate in good faith with the Committee in making such determination and
providing the necessary information for this purpose.

13.10. Funding. Benefits payable under this Plan to any person will be paid by
the Company from its general assets. Shares to be issued hereunder will be
issued directly by the Company from its authorized but unissued Shares or
acquired by the Company on the open market, or a combination thereof. Neither
the Company nor any of its Affiliates will be required to segregate on its books
or otherwise establish any funding procedure for any amount to be used for the
payment of benefits under this Plan. The Company or any of its Affiliates may,
however, in its sole discretion, set funds aside in investments to meet any
anticipated obligations under this Plan. Any such action or set-aside will not
be deemed to create a trust of any kind between the Company and any of its
Affiliates and any Participant or other person entitled to benefits under the
Plan or to constitute the funding of any Plan benefits. Consequently, any person
entitled to a payment under the Plan will have no rights greater than the rights
of any other unsecured general creditor of the Company or its Affiliates.

 

28

--------------------------------------------------------------------------------

SIGNATURES

IN WITNESS WHEREOF, the Company has caused this Horizon Bancorp 2013 Omnibus
Equity Incentive Plan to be executed by its officers thereunder duly authorized,
this 18th day of June, 2013, but effective as of February 1, 2013.

 

HORIZON BANCORP

By:

 

/s/ Craig M. Dwight

 

Craig M. Dwight, President and Chief Executive Officer

 

ATTEST:

By:

 

/s/ Daniel F. Hopp

 

Daniel F. Hopp, Chairman of the Compensation Committee

 

29