Union Community Bancorp Stock Option Plan, as amended on and through July 20,
      2005


    Exhibit
      10.2

     

    


     

    UNION
      COMMUNITY BANCORP

     

    STOCK
      OPTION PLAN

     

    1. Purpose.
      The
      purpose of the Union Community Bancorp Stock Option Plan (the “Plan”) is to
      provide to directors, officers and other key employees of Union Community
      Bancorp (the “Holding Company”) and its majority-owned and wholly-owned
      subsidiaries (individually a “Subsidiary” and collectively the -“Subsidiaries”),
      including, but not limited to, Union Federal Savings and Loan Association upon
      its conversion to stock form (“Union”), who are materially responsible for the
      management or operation of the business of the Holding Company or a Subsidiary
      and have provided valuable services to the Holding Company or a Subsidiary,
      a
      favorable opportunity to acquire Common Stock, without par value (“Common
      Stock”), of the Holding Company, thereby providing them with an increased
      incentive to work for the success of the Holding Company and its Subsidiaries
      and better enabling each such entity to attract and retain capable directors
      and
      executive personnel.

     

    2. Administration
      of the Plan.
      The
      Plan shall be administered, construed and interpreted by a committee (the
“Committee”) consisting of at least two members of the Board of Directors of the
      Holding Company, each of whom is a “Non-Employee Director” within the meaning of
      the definition of that term contained in Reg. § 16b-3 promulgated under the
      Securities Exchange Act of 1934, as amended (the “1934 Act”). The members of the
      Committee shall be designated from time to time by the Board of Directors of
      the
      Holding Company. The decision of a majority of the members of the Committee
      shall constitute the decision of the Committee, and the Committee may act either
      at a meeting at which a majority of the members of the Committee is present
      or
      by a written consent signed by all members of the Committee. The Committee
      shall
      have the sole, final and conclusive authority to determine, consistent with
      and
      subject to the provisions of the Plan:

     

    (a) the
      individuals (the “Optionees”) to whom options or successive options shall be
      granted under the Plan;

     

    (b) the
      time
      when options shall be granted hereunder;

     

    (c) the
      number of shares of Common Stock to be covered under each option;

     

    (d) the
      option price to be paid upon the exercise of each option;

     

    (e) the
      period within which each such option may be exercised;

     

    (f) the
      extent to which an option is an incentive stock option or a non-qualified stock
      option; and

     

    (g) the
      terms
      and conditions of the respective agreements by which options granted shall
      be
      evidenced.

     

    The
      Committee shall also have authority to prescribe, amend, waive, and rescind
      rules and regulations relating to the Plan, to accelerate the vesting of any
      stock options made hereunder (subject to Office of Thrift and Supervision
      regulations), to make amendments or modifications in the terms and conditions
      (including exercisability) of the options relating to the effect of termination
      of employment of the optionee (subject to the last sentence of Section 9
      hereof), to waive any restrictions or conditions applicable to any option or
      the
      exercise thereof, and to make all other determinations necessary or advisable
      in
      the administration of the Plan.

     

    3. Eligibility.
      The
      Committee may, consistent with the purposes of the Plan, grant options to
      officers and other key employees and directors or directors emeritus (whether
      or
      not also employees) of the Holding Company or of a Subsidiary who in the opinion
      of the Committee are from time to time materially responsible for the management
      or operation of the business of the Holding Company or of a Subsidiary and
      have
      provided valuable services to the Holding Company or a Subsidiary; provided,
      however, that in no event may any employee who owns (after application of the
      ownership rules in § 425(d) of the Internal Revenue Code of 1986, as
      amended (the “Code”)) shares of stock possessing more than 10 percent of the
      total combined voting power of all classes of stock of the Holding Company
      or
      any of its Subsidiaries be granted an incentive stock option hereunder unless
      at
      the time such option is granted the option price is at least 110% of the fair
      market value of the stock subject to the option and such option by its terms
      is
      not exercisable after the expiration of five (5) years from the 

     

    


     


    
      
        
        

      

      
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    date
      such
      option is granted. Subject to the provisions of Section 7 hereof, an individual
      who has been granted an option under the Plan (an “Optionee”), if he is
      otherwise eligible, may be granted an additional option or options if the
      Committee shall so determine.

     

    4. Stock
      Subject to the Plan.
      There
      shall be reserved for issuance upon the exercise of options granted under the
      Plan, shares of Common Stock of the Holding Company equal to 10% of the total
      number of shares of Common Stock issued by the Holding Company upon the
      conversion of Union from mutual to stock form, which may be authorized but
      unissued shares or treasury shares of the Holding Company. Subject to Section
      7
      hereof, the shares for which options may be granted under the Plan shall not
      exceed that number. If any option shall expire or terminate or be surrendered
      for any reason without having been exercised in full, the unpurchased shares
      subject thereto shall (unless the Plan shall have terminated) become available
      for other options under the Plan.

     

    5. Terms
      of Options.
      Each
      option granted under the Plan shall be subject to the following terms and
      conditions and to such other terms and conditions not inconsistent therewith
      as
      the Committee may deem appropriate in each case:

     

    (a) Option
      Price.
      The
      price to be paid for shares of stock upon the exercise of each option shall
      be
      determined by the Committee at the time such option is granted, but such price
      in no event shall be less than the fair market value, as determined by the
      Committee consistent with Treas. Reg. § 20.2031-2 and any requirements of
§ 422A of the Code, of such stock on the date on which such option is
      granted.

     

    (b) Period
      for Exercise of Option.
      An
      option shall not be exercisable after the expiration of such period as shall
      be
      fixed by the Committee at the time of the grant thereof, but such period in
      no
      event shall exceed ten (10) years and one day from the date on which such option
      is granted; provided, that incentive stock options granted hereunder shall
      have
      terms not in excess of ten (10) years and non-qualified options shall be for
      a
      period of not in excess of ten (10) years and one day from the date of grant
      thereof. Options shall be subject to earlier termination as hereinafter
      provided.

     

    (c) Exercise
      of Options.
      The
      option price of each share of stock purchased upon exercise of an option shall
      be paid in full at the time of such exercise. Payment may be in (i) cash, (ii)
      if the Optionee may do so in conformity with Regulation T (12 C.F.R.
§ 220.3(e)(4)) without violating §16(b) or § 16(c) of the 1934 Act,
      pursuant to a broker’s cashless exercise procedure, by delivering a properly
      executed exercise notice together with irrevocable instructions to a broker
      to
      promptly deliver to the Holding Company the total option price in cash and,
      if
      desired, the amount of any taxes to be withheld from the Optionee’s compensation
      as a result of any withholding tax obligation of the Holding Company or any
      of
      its Subsidiaries, as specified in such notice, or (iii) beginning on a date
      which is three years following Union’s conversion from mutual to stock form and
      with the approval of the Committee, by tendering whole shares of the Holding
      Company’s Common Stock owned by the Optionee and cash having a fair market value
      equal to the cash exercise price of the shares with respect to which the option
      is being exercised. For
      this
      purpose, any shares so tendered by an Optionee shall be deemed to have a fair
      market value equal to the mean between the highest and lowest quoted selling
      prices for the shares on the date of exercise of the option (or if there were
      no
      sales on such date the weighted average of the means between the highest and
      lowest quoted selling prices for the shares on the nearest date before and
      the
      nearest after the date of exercise of the option as prescribed by Treas. Reg.
§
      20-2031-2), as reported in The
      Wall Street Journal
      or a
      similar publication selected by the Committee. The
      Committee shall have the authority to grant options exercisable in full at
      any
      time during their term, or exercisable in such installments at such times during
      their term as the Committee may determine; provided, however, that options
      shall
      not be exercisable during the first six (6) months of their term, and provided
      further that options shall become exercisable no earlier than at the rate of
      20%
      per year beginning on the anniversary of the date of grant of such options,
      subject to earlier vesting in the event of death or disability. Installments
      not
      purchased in earlier periods shall be cumulated and be available for purchase
      in
      later periods. Subject to the other provisions of this Plan, an option may
      be
      exercised at any time or from time to time during the term of the option as
      to
      any or all whole shares which have become subject 

     

    


     


    
      
        
        

      

      
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    to
      purchase pursuant to the terms of the option or the Plan, but not at any time
      as
      to fewer than one hundred (100) shares unless the remaining shares which have
      become subject to purchase are fewer than one hundred (100) shares. An option
      may be exercised only by written notice to the Holding Company, mailed to the
      attention of its Secretary, signed by the Optionee (or such other person or
      persons as shall demonstrate to the Holding Company his or their right to
      exercise the option), specifying the number of shares in respect of which it
      is
      being exercised, and accompanied by payment in full in either cash or by check
      in the amount of the aggregate purchase price therefor, by delivery of the
      irrevocable broker instructions referred to above, or, if the Committee has
      approved the use of the stock swap feature provided for above, followed as
      soon
      as practicable by the delivery of the option price for such shares.

     

    (d) Certificates.
      The
      certificate or certificates for the shares issuable upon an exercise of an
      option shall be issued as promptly as practicable after such exercise. An
      Optionee shall not have any rights of a shareholder in respect to the shares
      of
      stock subject to an option until the date of issuance of a stock certificate
      to
      him for such shares. In no case may a fraction of a share be purchased or issued
      under the Plan, but if, upon the exercise of an option, a fractional share
      would
      otherwise be issuable, the Holding Company shall pay cash in lieu
      thereof.

     

    (e) Termination
      of Option.
      If an
      Optionee (other than a director or director emeritus of the Holding Company
      or
      its Subsidiaries who is not an employee of the Holding Company or its
      Subsidiaries (“Outside Director”)) ceases to be an employee of the Holding
      Company and the Subsidiaries for any reason other than retirement, permanent
      and
      total disability (within the meaning of § 22(e)(3) of the Code), or death,
      any option granted to him shall forthwith terminate. Leave of absence approved
      by the Committee shall not constitute cessation of employment. If an Optionee
      (other than an Outside Director) ceases to be an employee of the Holding Company
      and the Subsidiaries by reason of retirement, any option granted to him may
      be
      exercised by him in whole or in part within three (3) years after the date
      of
      his retirement, to the extent the option was otherwise exercisable at the date
      of his retirement; provided, however, that if such employee remains a director
      or director emeritus of the Holding Company, the option granted to him shall
      continue to vest while he serves as a director or director emeritus and may
      be
      exercised by him in whole or in part until the later of (a) three (3) years
      after the date of his retirement, or (b) six months after his service as a
      director or director emeritus of the Holding Company terminates. (The term
      “retirement” as used herein means such termination of employment as shall
      entitle such individual to early or normal retirement benefits under any then
      existing pension plan of the Holding Company or a Subsidiary.) If an Optionee
      (other than an Outside Director) ceases to be an employee of the Holding Company
      and the Subsidiaries by reason of permanent and total disability (within the
      meaning of § 22(e)(3) of the Code), any option granted to him may be
      exercised by him in whole or in part within one (1) year after the date of
      his
      termination of employment by reason of such disability whether or not the option
      was otherwise exercisable at the date of such termination. Options granted
      to
      Outside Directors shall cease to be exercisable six (6) months after the date
      such Outside Director is no longer a director or director emeritus of the
      Holding Company or its Subsidiaries for any reason other than death or
      disability. If an Optionee who is an Outside Director ceases to be a director
      or
      a director emeritus of the Holding Company or its Subsidiaries by reason of
      disability, any option granted to him may be exercised in whole or in part
      within one (1) year after the date the Optionee ceases to be a director or
      a
      director emeritus by reason of such disability, whether or not the option was
      otherwise exercisable at such date. In the event of the death of an Optionee
      while in the employ or service as a director or director emeritus of the Holding
      Company or a Subsidiary, or, if the Optionee is not an Outside Director, within
      three (3) years after the date of his retirement (or, if later, six months
      following his termination of service as a director or director emeritus of
      the
      Holding Company or its Subsidiaries) or within one (1) year after the
      termination of his employment by reason of permanent and total disability
      (within the meaning of § 22(e)(3) of the Code), or, if the Optionee is an
      Outside Director, within six (6) months after he is no longer a director or
      director emeritus of the Holding Company or its Subsidiaries for reasons other
      than disability or, within one (1) year after the termination of his service
      by
      reason of disability, any option 

     

    


     


    
      
        
        

      

      
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    granted
      to him may be exercised in whole or in part at any time within one (1) year
      after the date of such death by the executor or administrator of his estate
      or
      by the person or persons entitled to the option by will or by applicable laws
      of
      descent and distribution until the expiration of the option term as fixed by
      the
      Committee, whether or not the option was otherwise exercisable at the date
      of
      his death. Notwithstanding the foregoing provisions of this subsection (e),
      no
      option shall in any event be exercisable after the expiration of the period
      fixed by the Committee in accordance with subsection (b) above.

     

    (f) Nontransferability
      of Option.
      No
      option may be transferred by the Optionee otherwise than by will or the laws
      of
      descent and distribution or pursuant to a qualified domestic relations order
      as
      defined by the Code or Title I of the Employee Retirement Income Security Act,
      or the rules thereunder, and during the lifetime of the Optionee options shall
      be exercisable only by the Optionee or his guardian or legal
      representative.

     

    (g) No
      Right to Continued Service.
      Nothing
      in this Plan or in any agreement entered into pursuant hereto shall confer
      on
      any person any right to continue in the employ or service of the Holding Company
      or its Subsidiaries or affect any rights the Holding Company, a Subsidiary,
      or
      the shareholders of the Holding Company may have to terminate his service at
      any
      time.

     

    (h) Maximum
      Incentive Stock Options.
      The
      aggregate fair market value of stock with respect to which incentive stock
      options (within the meaning of § 422A of the Code) are exercisable for the
      first time by an Optionee during any calendar year under the Plan or any other
      plan of the Holding Company or its Subsidiaries shall not exceed $100,000.
      For
      this purpose, the fair market value of such shares shall be determined as of
      the
      date the option is granted and shall be computed in such manner as shall be
      determined by the Committee, consistent with the requirements of § 422A of
      the Code.

     

    (i) Agreement.
      Each
      option shall be evidenced by an agreement between the Optionee and the Holding
      Company which shall provide, among other things, that, with respect to incentive
      stock options, the Optionee will advise the Holding Company immediately upon
      any
      sale or transfer of the shares of Common Stock received upon exercise of the
      option to the extent such sale or transfer takes place prior to the later of
      (a)
      two (2) years from the date of grant or (b) one (1) year from the date of
      exercise.

     

    (j) Investment
      Representations.
      Unless
      the shares subject to an option are registered under applicable federal and
      state securities laws, each Optionee by accepting an option shall be deemed
      to
      agree for himself and his legal representatives that any option granted to
      him
      and any and all shares of Common Stock purchased upon the exercise of the option
      shall be acquired for investment and not with a view to, or for the sale in
      connection with, any distribution thereof, and each notice of the exercise
      of
      any portion of an option shall be accompanied by a representation in writing,
      signed by the Optionee or his legal representatives, as the case may be, that
      the shares of Common Stock are being acquired in good faith for investment
      and
      not with a view to, or for sale in connection with, any distribution thereof
      (except in case of the Optionee’s legal representatives for distribution, but
      not for sale, to his legal heirs, legatees and other testamentary
      beneficiaries). Any shares issued pursuant to an exercise of an option may
      bear
      a legend evidencing such representations and restrictions.

     

    6. Incentive
      Stock Options and Non-Qualified Stock Options.
      Options
      granted under the Plan may be incentive stock options under § 422A of the
      Code or non-qualified stock options, provided, however, that Outside Directors
      shall be granted only non-qualified stock options. All options granted hereunder
      will be clearly identified as either incentive stock options or non-qualified
      stock options. In no event will the exercise of an incentive stock option affect
      the right to exercise any non-qualified stock option, nor shall the exercise
      of
      any non-qualified stock option affect the right to exercise any incentive stock
      option. Nothing in this Plan shall be construed to prohibit the grant of
      incentive stock options and non-qualified stock options to the same person,
      provided, further, that incentive stock options and non-qualified stock options
      shall not be granted in a manner whereby the exercise of one non-qualified
      stock
      option or incentive stock option affects the exercisability of the
      other.

     

    7. Adjustment
      of Shares.
      In the
      event of any change after the effective date of the Plan in the outstanding
      

     

    


     


    
      
        
        

      

      
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    stock
      of
      the Holding Company by reason of any reorganization, recapitalization, stock
      split, stock dividend, combination of shares, exchange of shares, merger or
      consolidation, liquidation, extraordinary distribution (consisting of cash,
      securities, or other assets), or any other change after the effective date
      of
      the Plan in the nature of the shares of stock of the Holding Company, the
      Committee shall determine what changes, if any, are appropriate in the number
      and kind of shares reserved under the Plan, and the Committee shall determine
      what changes, if any, are appropriate in the option price under and the number
      and kind of shares covered by outstanding options granted under the Plan. Any
      determination of the Committee hereunder shall be conclusive.

     

    8. Tax
      Withholding.
      Whenever the Holding Company proposes or is required to issue or transfer shares
      of Common Stock under the Plan, the Holding Company shall have the right to
      require the Optionee or his or her legal representative to remit to the Holding
      Company an amount sufficient to satisfy any federal, state and/or local
      withholding tax requirements prior to the delivery of any certificate or
      certificates for such shares, and whenever under the Plan payments are to be
      made in cash, such payments shall be net of an amount sufficient to satisfy
      any
      federal, state and/or local withholding tax requirements. If permitted by the
      Committee and pursuant to procedures established by the Committee, an Optionee
      may make a written election to have shares of Common Stock having an aggregate
      fair market value, as determined by the Committee, consistent with the
      requirements of Treas. Reg. § 20.2031-2, sufficient to satisfy the
      applicable withholding taxes, withheld from the shares otherwise to be received
      upon the exercise of a non-qualified option. 

     

    9. Amendment.
      Subject
      to Section 13, the Board of Directors of the Holding Company may amend the
      Plan
      from time to time and, with the consent of the Optionee, the terms and
      provisions of his option, except that without the approval of the holders of
      at
      least a majority of the shares of the Holding Company voting in person or by
      proxy at a duly constituted meeting or adjournment thereof:

     

    (a) the
      number of shares of stock which may be reserved for issuance under the Plan
      may
      not be increased except as provided in Section 7 hereof;

     

    (b) the
      period during which an option may be exercised may not be extended beyond ten
      (10) years and one day from the date on which such option was granted;
      and

     

    (c) the
      class
      of persons to whom options may be granted under the Plan shall not be modified
      materially.

     

    No
      amendment of the Plan, however, may, without the consent of the Optionees,
      make
      any changes in any outstanding options theretofore granted under the Plan which
      would adversely affect the rights of such Optionees.

     

    10. Termination.
      The
      Board of Directors of the Holding Company may terminate the Plan at any time
      and
      no option shall be granted thereafter. Such termination, however, shall not
      affect the validity of any option theretofore granted under the Plan. In any
      event, no incentive stock option may be granted under the Plan after the date
      which is ten (10) years from the effective date of the Plan.

     

    11. Successors.
      This
      Plan shall be binding upon the successors and assigns of the Holding
      Company.

     

    12. Governing
      Law.
      The
      terms of any options granted hereunder and the rights and obligations hereunder
      of the Holding Company, the Optionees and their successors in interest shall,
      except to the extent governed by federal law, be governed by Indiana
      law.

     

    13. Government
      and Other Regulations.
      The
      obligations of the Holding Company to issue or transfer and deliver shares
      under
      options granted under the Plan shall be subject to compliance with all
      applicable laws, governmental rules and regulations (including Office of Thrift
      and Supervision regulations), and administrative action. In particular, grants
      of stock options under the Plan shall comply with the requirements of 12. C.F.R.
      § 563b.3(g)(4)(vi), to the extent applicable to such grants.

     

    14. Effective
      Date.
      The
      Plan shall become effective on the date it is approved by the holders of at
      least a majority of the shares of the Holding Company entitled to vote at a
      duly
      constituted meeting or adjournment thereof. The options granted pursuant to
      the
      Plan may not be exercised until the Board of Directors of the Holding Company
      has been advised by counsel that such approval has been obtained and all other
      applicable legal requirements have been met.

     

    


     


    
      
        
        

      

      
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      Resolutions
        Adopted by the Board of Directors

      of
        Union Community Bancorp

       

      WHEREAS,
        the Union Community Bancorp Stock Option Plan (the “Option Plan”) permits the
        Corporation’s Board of Directors to amend the Option Plan, subject to Office of
        Thrift Supervision (the “OTS”) regulations, without shareholder approval except
        in circumstances not here relevant;

       

      WHEREAS,
        the OTS has recently amended its regulations to permit the vesting of stock
        options and management recognition grants in the event of a change in control
        of
        the corporation making such awards.

       

      WHEREAS,
        the Board of Directors deems it advisable to amend the Option Plan to permit
        vesting of options and other awards under the Option Plan in the event of
        a
        change in control of the Corporation or its savings association
        subsidiary.

       

      NOW,
        THEREFORE, BE IT RESOLVED, that the Option Plan shall be amended by adding
        a new
        Section 15 thereto which shall read in its entirety as follows:

       

      “21.
        Change in Control. Notwithstanding any other provision in this Plan, in the
        event of a Change in Control, all options previously granted and still
        outstanding under the Plan regardless of their terms shall become exercisable
        in
        full immediately prior to the consummation of the Change in Control, and
        holders
        of such options, in addition to any other rights they may have with respect
        to
        such options under this Plan and the instrument evidencing the grant of the
        option, shall have thirty (30) days following a Change in Control to exercise
        those options. For this purpose, “Change in Control” shall mean a change in
        control of the Corporation or of Union, within the meaning of 12 C.F.R. §
        574.4(a) (other than a change of control resulting from a trustee or other
        fiduciary holding shares under an employee benefit plan of the Corporation
        or
        any of its subsidiaries).”

       

      RESOLVED
        FURTHER, that the foregoing amendment to the Option Plan be applied to
        outstanding stock options and that the Corporation’s officers notify the current
        holders of stock options granted under the Option Plan of this amendment
        and
        advise them of its impact on the vesting of their stock options.