Exhibit
10.2


 


AWARD
AGREEMENT


UNDER THE


MAINSOURCE
FINANCIAL GROUP, INC.


2007 Stock
Incentive Plan


 


Notice of
Grant


 


The individual named below has been granted
an “Award” with respect to the common stock of MainSource Financial Group, Inc.,
an Indiana corporation (the “Company”), subject to the terms and conditions of
the MainSource Financial Group, Inc. 2007 Stock Incentive Plan (the “Plan”)
and this Award Agreement (the “Agreement”).


 


	
  1.

  	
  Grantee:

  	
  Archie M. Brown, Jr.

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Grant Date:

  	
  August 4, 2008

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Type and Size of Award:

  	
  Incentive Stock Option to purchase 25,000 Shares*

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Exercise Price per Share:

  	
                         (this
  is the Fair Market Value of the Share on the Grant Date)

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Expiration Date:

  	
  August 3, 2018 (ten years from the Grant Date)

  



 






*For an Incentive Stock Option (an “Option Award”),
this represents the number of shares of common stock of the Company (“Company
Stock”) the Grantee is entitled to purchase upon subsequent exercise of the
Option Award.


 


Agreement
Regarding Terms and Conditions of Grant


 


This Agreement is dated as of the Grant Date
and is between the Company and the Grantee, in accordance with the terms of the
Plan.  Capitalized terms used in this
Agreement and not otherwise defined have the meanings given to them in the
Plan.


 


1.                                      The Plan.  The Plan contains terms and
conditions applicable to the Award that are not explicitly set forth in this
Award Agreement, but which are incorporated herein by reference.  The terms of this Agreement shall be subject
to the terms of the Plan.  In the case of
any conflict between the terms of this Agreement and the terms of the Plan, the
terms of the Plan shall control.  Grantee
acknowledges receipt of a copy of the Plan and represents that he or she is
familiar with the terms and provisions of the Plan.  Grantee has reviewed the Plan and this
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to signing this Agreement and fully understands all provisions of
the Award.  Grantee agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator (as defined in the Plan) upon any questions arising under the
Plan or this Agreement.


 


2.                                      Grant of Option Award. 
Subject to the terms of this Agreement and the Plan, the Company hereby
grants to Grantee an Option Award which entitles Grantee to purchase 25,000
shares of common stock of Company Stock set forth in the Notice of Grant above
(the “Shares”), 


 

















 


at the price per Share set forth in the Notice of Grant above (the “Exercise
Price”) and in the manner and subject to the conditions provided in this
Agreement.


 


3.                                      Vesting.


 


(a)                                  Except as otherwise provided in subsection
4(b), the Award is subject to forfeiture upon the Grantee’s Termination of
Employment, unless and until the Award vests as provided in this
subsection.  Vesting shall occur in
accordance with the following schedule:


 


	
  Date of Vesting

  	
   

  	
  Percent of Option Shares Vested

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  August 4, 2012

  	
   

  	
  100

  	
  %

  



 


(b)                                 Upon a Change in Control, the Award will be
immediately vested and immediately exercisable.


 


4.                                       Exercise of Option Award.  The
following terms and conditions shall apply to the exercise of the Option Award.


 


(a)                                  The Option Award shall not be exercisable
after the Expiration Date.  The Grantee
may exercise the Option Award in whole or in part, at any time on or before the
Expiration Date, as to any Shares which have vested as set forth in this
Agreement.  Shares owned by Grantee as a
result of his or her exercise of the Option Award shall be referred to herein
as “Purchased Shares.”


 


(b)                                 Except to the extent the Grantee uses the
sale and remittance procedure described in this subsection, the Grantee must
pay cash for the Exercise Price for the Shares on the Exercise Date.  The Grantee may also pay the Exercise Price
as follows:


 


(i)                                     In shares of equivalent equity interests,
held for the requisite period necessary to avoid a charge to the Company’s
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date, or


 


(ii)                                  Through a special sale and remittance
procedure pursuant to which the Grantee concurrently provides irrevocable
written instructions to (A) a brokerage firm designated by the Company to
effect the immediate sale of the purchased interests and remit to the Company,
out of the sale proceeds available on the settlement date, sufficient funds to
cover the aggregate Exercise Price payable for the purchased interests plus all
applicable federal, state and local income and employment taxes required to be
withheld by the Company by reason of such exercise, and (B) the Company to
deliver the certificates for the purchased interests directly to such brokerage
firm to complete the sale.


 


The Company’s obligations to
deliver purchased equity interests under the sale and remittance procedure
described in this subsection shall be conditioned


 


2

















 


upon receiving sufficient funds and/or other
assets to cover the Exercise Price and tax withholding obligations described
herein.


 


5.                                      Conditions.  The Company’s obligation to
issue or transfer Shares to Grantee after the exercise of the Option Award, in
whole or in part, is conditioned upon Grantee’s payment in full for the Shares
with respect to which the Option Award was exercised.


 


6.                                      Change in Company Stock.  In
the event of any change in the Shares, as described in Section 12.9 of the
Plan, the Administrator will make appropriate adjustment or substitution in the
number, kind and price of Shares under this Agreement, all as provided in the
Plan.  Such adjustment or substitution in
the number, kind and price of Shares under this Agreement will be automatic and
no formal amendment will be required to be made to this Agreement to effect the
adjustment or substitution, provided the Participant is provided with adequate
notice of such adjustment or substitution. 
The Administrator’s determination
in this respect will be final, conclusive and binding on all parties.


 


7.                                      No Shareholder Rights; No Guarantee of
Employment.  Grantee shall not have any of the rights of a
shareholder with respect to the Shares until such Shares are issued or
transferred to Grantee after the exercise of the Option Award.  Nothing in this Agreement (a) confers on
Grantee any right to continue in the employment of the Company, or (b) interferes
with the Company’s right to terminate the employment of Grantee at any time,
with or without cause.


 


8.                                      Certain Tax Consequences. 
Grantee acknowledges that the exercise of the Option Award and any sale
of the Purchased Shares may have various tax consequences under federal and
state law.  Grantee has discussed these
consequences with his personal tax advisor. 
Grantee may be required to report the grant of the Option Award to the
Internal Revenue Service and/or to state tax authorities under applicable state
law.  The Company is not obligated to
deliver Shares upon the exercise of any Option Award issued under the Plan
until all applicable federal, state, local and foreign income and employment
tax withholding requirements have been satisfied.  In accordance with the foregoing, the Company
has the right to withhold sums from compensation otherwise due to Grantee to
satisfy such withholding requirements.


 


9.                                      Transferability.  An
Option Award granted hereby shall be neither transferable nor assignable by a
Grantee other than by will or by the laws of descent and distribution and may
be exercised, during the lifetime of the Grantee, only by the Grantee, or in
the event of his legal incapacity, by his guardian or legal representative
acting on behalf of the Grantee in a fiduciary capacity under state law and
court supervision.  A Restricted Stock
Award or Bonus Stock Award may not be transferred or assigned prior to the
lapse of all restrictions imposed upon the grant of a Restricted Stock Award or
Bonus Stock Award.


 


10.                                Successors and Assigns.  The
provisions of this Agreement shall inure to the benefit of, and be binding
upon, the Company and its successors and assigns and Grantee, Grantee’s assigns
and the legal representatives, heir and legatees of Grantee’s estate.


 


3

















 


11.                                Compliance with Laws and Regulations.


 


(a)                                  The grant and exercise of the Award, as
applicable, and the issuance of the Shares shall be subject to compliance by
the Company and Grantee with all applicable requirements of law relating
thereto, including but not limited to federal and state securities laws, and
with all applicable regulations of any stock exchange (or The Nasdaq Stock
Market, if applicable) on which the Shares or an equivalent equity interest may
be listed for trading at the time of such exercise and issuance.


 


(b)                                 The inability of the Company to obtain
approval from any regulatory body having authority deemed by the Company to be
necessary to the lawful issuance and sale of any Share pursuant to the Award
shall relieve the Company of any liability with respect to the non-issuance or
sale of the Shares as to which such approval shall not have been obtained.  The Company, however, shall use its best
efforts to obtain all such approvals.


 


12.                                Restrictive Covenants. 
Grantee acknowledges that without his or her making the covenants and
agreements hereinafter contained in this Section, the Company would not have
granted this Award to the Grantee and the grant of such Award is in reliance
upon Grantee’s compliance with the covenants and agreements made in this
Section.


 


(a)                                  Noncompetition. 
Grantee hereby covenants and agrees that during Grantee’s employment
with the Company and its Affiliates and for a period of 2.99 years following
the termination of that employment, for any reason, Grantee agrees that he or
she shall not, directly or directly, whether individually or as a partner,
shareholder, officer, director, employee, independent representative, broker,
agent, consultant or in any other capacity for any other individual,
partnership, firm, corporation, company or other entity, engage in the
following prohibited activities without prior written authorization from the
Company:


 


(i)                                     Have any ownership interest in any Restricted
Organization (as hereinafter defined);


 


(ii)                                 Work or provide services for any Restricted
Organization;


 


(iii)                              Employ or seek to employ or engage or seek to engage any person who has
worked for or in conjunction with the Company or an Affiliate during the
12-month period preceding the termination of Grantee’s employment, specifically
including any consultant, employee, provider or vendor used by the Company or
an Affiliate;


 


(iv)                             Solicit or induce any person currently employed by or otherwise
associated with the Company or an Affiliate to terminate such employment or
relationship;


 


(v)                                Solicit or provide or offer to solicit or provide any Restricted
Product or Service to any business account or customer of the Company or an
Affiliate who was a business account or customer of the Company or an Affiliate


 


4

















 


during the 12-month period preceding
termination of Grantee’s employment or about whom Grantee obtained confidential
information;


 


(vi)                              Accept business from any business account or
customer of the Company or an Affiliate who was a business account or customer
of the Company or an Affiliate during the term of Grantee’s employment,
including, but not limited to, any business account or customer serviced or
contacted by Grantee, or for whom Grantee had direct or indirect
responsibility, on behalf of the Company or an Affiliate within the 12-month
period preceding the termination of Grantee’s employment or about whom Grantee
obtained confidential information, when that business pertains to products or
services which are competitive with or substantially similar to any Restricted
Product or Service; or


 


(vii)                           Otherwise attempt to interfere with the
Company or an Affiliate’s business or its relationship with its business
accounts, consultants, customers, employees or vendors.


 


(b)                                 Definitions.  For purposes of this Section:


 


(i)                                     “Restricted Product or Service” shall
mean a product or service in development or design, or produced, marketed, sold,
disseminated, offered or distributed by the Company or an Affiliate at any time
on or after the date of this Award Agreement and until Grantee’s termination of
employment.


 


(ii)                                  “Restricted Area” shall mean any
county in which MainSource Bank conducts business.


 


(iii)                               “Restricted Organization” shall mean
any bank holding company, savings association holding company, financial
services holding company, bank, savings bank, thrift, any other financial
institution or other organization or entity that is primarily engaged in the
financial services industry within the Restricted Area, which competes with the
Company or an Affiliate.


 


(c)                                  Adjustments and Extension of Restrictive
Period. Should any covenant
or restriction included in this Section be held to be unreasonable or
unenforceable for any reason, including without limitation the temporal
limitation, geographic restrictions, or scope of activity covered by a
restrictive covenant, then such provision or restriction shall be given effect
and enforced to whatever extent would be reasonable and enforceable.  All remaining covenants and restrictions
shall remain in full force and effect in accordance with the terms
thereof.  If Grantee is deemed to have
breached any of the foregoing restrictive covenants, Grantee agrees that the
restrictive period shall be automatically extended by a period of time equal to
the period of such breach, measured from the date of the breach through the
date of such determination.


 


(d)                                 Survival of Obligations. 
Grantee agrees that his obligations contained in this Section shall
survive the termination of Grantee’s employment with the Company, whether such
termination is voluntary or involuntary. 
Grantee further acknowledges that


 


5

















 


any breach by the Company of any contractual,
statutory, or other legal obligation to the Grantee shall not excuse or
terminate the Grantee’s obligations hereunder or otherwise preclude the Company
from seeking relief pursuant to any provision of this Agreement.


 


(e)                                  Reasonableness of Restrictions. 
Grantee hereby agrees and acknowledges that (i) the provisions of
this Section are reasonable, and (ii) Grantee has (A) read the
foregoing provisions of this Section, (B) been given ample time and
opportunity to consult with counsel concerning the meaning and effect of this
Section, and (C) in no way been coerced or in any way forced to agree to
the provisions of those Sections.


 


(f)                                    Remedies.  Grantee acknowledges and
agrees that any actual or threatened breach of the foregoing provisions of this
Agreement will cause irreparable harm to the Company and/or its Affiliates and
that it may be difficult to determine or adequately compensate the Company and
its Affiliates through monetary damages. 
Accordingly, Grantee hereby agrees that the Company may seek a
restraining order or other injunctive remedy to prevent or restrain such breach
without the requirement to post or obtain a bond or other security.  Grantee further agrees that the Company shall
also be entitled to recover reasonable costs and attorneys fees incurred by it
to enforce the foregoing covenants and agreement.  Grantee further acknowledges that nothing
contained herein shall be construed to prohibit or limit the Company and its
Affiliates from pursuing any other remedies, whether such remedies are
contractual or arise at law or in equity. 
Grantee further agrees to indemnify and hold harmless the Company and
its Affiliates, directors, officers, employees, agents, successors and assigns
from and against any and all losses or liabilities which may result from the
breach of the restrictive covenants set forth in this Section.


 


13.                                 Amendment.  Subject to Section 409A
of the Internal Revenue Code of 1986, as amended, if applicable, the
Administrator shall have complete and exclusive power and authority to amend or
modify this Agreement (and the Administrator shall have the power and authority
to amend or modify the Plan) in any or all respects; provided, however, that no
such amendment or modification shall adversely affect, in any material respect,
any rights of the Grantee with respect to an Award granted pursuant to this
Agreement, unless the Grantee consents to such amendment or modification.  However, the Administrator shall have the
power and authority to amend or modify this Agreement (and the Administrator
shall have the power and authority to amend or modify the Plan) in any manner
(including in a manner that adversely affects the rights of the Grantee with
respect to the Award) if such amendment or modification applies equally to all
holders of the type of award granted under the Plan and is approved by holders
of the type of award granted representing a majority of the Shares issued or
issuable pursuant to such awards granted under the Plan.


 


14.                                 Termination.  Except as otherwise provided
in the Plan, this Agreement and any unvested Shares or Option Awards granted
hereby will terminate immediately upon Grantee’s termination of employment.


 


15.                                 Entire Agreement; Governing Law; Attorneys’
Fees.  The Plan is incorporated into this Agreement
by reference.  The Plan and this
Agreement constitute the entire agreement


 


6

















 


of the parties with respect to the subject matter of this Agreement and
supersede in their entirety all prior undertakings and agreements of the
Company and Grantee with respect to subject matter of this Agreement.  The Award and this Agreement shall be
construed, administered and governed in all respects under and by the internal
laws (but not the choice of law rules) of the State of Indiana.  The Company, its Affiliates and the Grantee
irrevocably consent to the jurisdiction and venue of the Courts of the State of
Indiana and the United States federal courts serving Decatur County, Indiana
with respect to any and all actions related to the Award and this Agreement or
the enforcement hereof, and the parties hereto hereby irrevocably waive any and
all objections thereto.  If the Plan or
this Agreement is challenged in a court of law, the prevailing party shall be
entitled to receive from the other party reasonable attorneys’ fees and other
costs and expenses incurred by the prevailing party in connection with such
suit regardless of whether such suit is prosecuted to judgment.


 


16.                                 Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but all of which collectively will constitute one and the
same instrument.


 


IN WITNESS WHEREOF, the Company has caused
this Agreement to be executed on its behalf by its duly authorized officer and
Grantee, after thoroughly reviewing and developing a complete understanding of
the restrictions and covenants imposed by Section 12, has also executed
this Agreement as of the date first above written.


 


 


	
  GRANTEE:

  	
   

  	
  MAINSOURCE FINANCIAL GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  (Signature)

  	
   

  	
   

  	
  [insert name, title]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Printed Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Designate Office)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (County and State)

  	
   

  	
   

  



 


7