**Exhibit 10.7**

**CHANGE IN CONTROL AGREEMENT**

THIS CHANGE IN CONTROL AGREEMENT (“Agreement”) isentered into as of the **1st day of January,2006** by and between **MAINSOURCEFINANCIAL GROUP, INC.** (the “Company”), an Indiana corporation, and**JAMES M. ANDERSON**(“Executive”).

**R E C I T A L S:**

WHEREAS,the Company considers the establishment and maintenance of a sound and vitalmanagement to be essential to protecting and enhancing the best interests ofthe Company and its shareholders; and

WHEREAS, the Company recognizes that, as is the casewith many publicly held corporations, the possibility of a change in controlmay arise and that such possibility may result in the departure or distractionof management personnel to the detriment of the Company and its shareholders;and

WHEREAS, the Board of Directors of the Company (the “Board”)has determined that it is in the best interests of the Company and itsshareholders to secure Executive’s continued services and to ensure Executive’scontinued and undivided dedication to his duties in the event of any threat oroccurrence of a Change in Control (as defined in Section 1) of the Company; and

WHEREAS, the Board has authorized the Company to enterinto this Agreement;

NOW, THEREFORE, for and in consideration of thepremises and the mutual covenants and agreements herein contained, andintending to be legally bound hereby, the Company and Executive hereby agree asfollows:

**A G R E E M E N T:**

**1.             Definitions**.  As used in this Agreement, the followingterms shall have the respective meanings set forth below:

(a)   “BonusAmount” means the annual incentive bonus earned by Executive from theCompany during the last completed fiscal year of the Company immediatelypreceding Executive’s Date of Termination (annualized in the event Executivewas not employed by the Company for the whole of any such fiscal year).

(b)   “Cause”means (i) the willful and continued failure of Executive to performsubstantially his duties with the Company (other than any such failureresulting from Executive’s incapacity due to physical or mental illness or anysuch failure subsequent to Executive being delivered a Notice of Terminationwithout Cause by the Company or delivering a Notice of Termination for GoodReason to the Company) after a written demand for substantial performance isdelivered to Executive by the Board that specifically identifies the manner inwhich the Board

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believesthat Executive has not substantially performed Executive’s duties, (ii) thewillful engaging by Executive in illegal conduct or gross misconduct that isdemonstrably and materially injurious to the Company, or (iii) the convictionof Executive of, or a plea by Executive of nolo contendre to, a felony.  For purpose of this paragraph (b), no act orfailure to act by Executive shall be considered “willful” unless done oromitted to be done by Executive in bad faith and without reasonable belief thatExecutive’s action or omission was legal, regulatory compliant, and in the bestinterests of the Company.  Any act, orfailure to act, based upon authority given pursuant to a resolution dulyadopted by the Board, based upon the advice of counsel for the Company or uponthe instructions of the Company’s chief executive officer or another seniorofficer of the Company, shall be conclusively presumed to be done, or omittedto be done, by Executive in good faith and in the best interests of theCompany.  Cause shall not exist unlessand until the Company has delivered to Executive a copy of a resolution dulyadopted by three-fourths (3/4) of the entire Board (excluding Executive ifExecutive is a Board member) at a meeting of the Board called and held for suchpurpose (after reasonable notice to Executive and an opportunity for Executive,together with counsel, to be heard before the Board), finding that in the goodfaith opinion of the Board an event set forth in clauses (i) or (ii) hasoccurred and specifying the particulars thereof in detail. The Company mustnotify Executive of any event constituting Cause within ninety (90) daysfollowing the Company’s knowledge of its existence or such event shall notconstitute Cause under this Agreement.

(c)    “Changein Control” means the occurrence of any one of the following events:

(i)    individualswho, on January 1, 2006, constitute the Board (the “Incumbent Directors”) ceasefor any reason to constitute at least a majority of the Board, provided thatany person becoming a director subsequent to January 1, 2006, whose election ornomination for election was approved by a vote of at least two-thirds of the IncumbentDirectors then on the Board (either by a specific vote or by approval of theproxy statement of the Company in which such person is named as a nominee fordirector, without written objection by such Incumbent Directors to suchnomination) shall be deemed to be an Incumbent Director; provided, however,that no individual elected or nominated as a director of the Company initiallyas a result of an actual or threatened election contest with respect todirectors or any other actual or threatened solicitation of proxies by or onbehalf of any person other than the Board shall be deemed to be an IncumbentDirector;

(ii)   any “person”(as such term is defined in Section 3(a)(9) of the Securities Exchange Act of1934, as amended (the “Exchange Act”), and as used in Sections 13(d)(3) and14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined inRule 13d-3 under the Exchange Act), directly or indirectly, of securities ofthe Company representing 25% or more of the combined voting power of theCompany’s then outstanding securities eligible to vote for the election of theBoard (the “Company Voting Securities”); provided, however, that the eventdescribed in this paragraph (ii) shall not be deemed to be a Change in Controlby virtue of any of the following acquisitions: (A) by the Company or anySubsidiary, (B) by any employee benefit plan sponsored or maintained by theCompany or any Subsidiary, or by any employee stock benefit trust created bythe Company or any Subsidiary, (C) by any underwriter temporarily holdingsecurities pursuant to an offering of such securities, (D) pursuant to aNon-Qualifying Transaction (as defined in paragraph (iii)), (E) pursuant to anyacquisition by Executive or any group of persons including

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Executive (or any entity controlled by Executive orany group of persons including Executive); or (F) a transaction (other than onedescribed in (iii) below) in which Company Voting Securities are acquired fromthe Company, if a majority of the Incumbent Directors approves a resolutionproviding expressly that the acquisition pursuant to this clause (F) does notconstitute a Change in Control under this paragraph (ii);

(iii)  theconsummation of a merger, consolidation, share exchange or similar form ofcorporate transaction involving the Company or any of its Subsidiaries thatrequires the approval of the Company’s shareholders, whether for suchtransaction or the issuance of securities in the transaction (a “BusinessCombination”), unless immediately following such Business Combination: (A) morethan 40% of the total voting power of (x) the corporation resulting from theconsummation of such Business Combination (the “Surviving Corporation”), or (y)if applicable, the ultimate parent corporation that directly or indirectly hasbeneficial ownership of 100% of the voting securities eligible to electdirectors of the Surviving Corporation (the “Parent Corporation”), isrepresented by Company Voting Securities that were outstanding immediatelyprior to such Business Combination (or, if applicable, represented by sharesinto which such Company Voting Securities were converted pursuant to suchBusiness Combination), and such voting power among the holders thereof is insubstantially the same proportion as the voting power of such Company VotingSecurities among the holders thereof immediately prior to the BusinessCombination, (B) no person (other than any employee benefit plan sponsored ormaintained by the Surviving Corporation or the Parent Corporation or anyemployee stock benefit trust created by the Surviving Corporation or the ParentCorporation) is or becomes the beneficial owner, directly or indirectly, of 25%or more of the total voting power of the outstanding voting securities eligibleto elect directors of the Parent Corporation (or, if there is no ParentCorporation, the Surviving Corporation) and (C) at least one-half of themembers of the board of directors of the Parent Corporation (or, if there is noParent Corporation, the Surviving Corporation) were Incumbent Directors at thetime of the Board’s approval of the execution of the initial agreementproviding for such Business Combination (any Business Combination whichsatisfies all of the criteria specified in (A), (B) and (C) above shall bedeemed to be a “Non-Qualifying Transaction”); or

(iv)  theshareholders of the Company approve a plan of complete liquidation ordissolution of the Company or a sale of all or substantially all of the Company’sassets.

Notwithstandingthe foregoing, a Change in Control of the Company shall not be deemed to occursolely because any person acquires beneficial ownership of more than 25% of theCompany Voting Securities as a result of the acquisition of Company VotingSecurities by the Company that reduces the number of Company Voting Securitiesoutstanding; provided, that if after such acquisition by the Company suchperson becomes the beneficial owner of additional Company Voting Securitiesthat increases the percentage of outstanding Company Voting Securitiesbeneficially owned by such person, a Change in Control of the Company shallthen occur.

(d)   “Date ofTermination” means (i) the effective date on which Executive’s employmentby the Company terminates as specified in a prior written notice by the Companyor Executive, as the case may be, to the other, delivered pursuant to Section10, or (ii) if Executive’s employment by the Company terminates by reason ofdeath, the date of death of Executive.

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(e)    “Disability”means termination of Executive’s employment by the Company due to Executive’sabsence from Executive’s duties with the Company on a full-time basis for atleast one hundred eighty (180) consecutive days as a result of Executive’sincapacity due to physical or mental illness. The determination of Disability shall be made by a physician mutuallyagreed upon by both the Executive and the Company.

(f)    “GoodReason” means, without Executive’s express written consent, the occurrenceof any of the following events after a Change in Control:

(i)    any changein the duties or responsibilities (including reporting responsibilities) ofExecutive that is inconsistent in any material and adverse respect withExecutive’s positions, duties, responsibilities or status with the Companyimmediately prior to such Change in Control (including any material and adversediminution of such duties or responsibilities);

(ii)   (A) areduction by the Company in Executive’s rate of annual base salary as in effectimmediately prior to such Change in Control, or as the same may be increasedfrom time to time thereafter, or (B) the failure by the Company to payExecutive an annual bonus in respect of the year in which such Change inControl occurs or any subsequent year in an amount greater than or equal to theannual bonus earned for the year prior to the year in which such Change inControl occurs, provided that Executive has met any requisite performancecriteria threshold necessary to the payment of such annual bonus in respect ofthe year in which such Change in Control occurs or such subsequent year.

(iii)  anyrequirement of the Company that Executive (A) be based anywhere more thanthirty (30) miles from the office where Executive is located at the time of theChange in Control, or (B)endure overnight travel on Company business to anextent substantially greater than the travel obligations of Executiveimmediately prior to such Change in Control;

(iv)  the failureof the Company to (A) continue in effect any employee benefit plan,compensation plan, welfare benefit plan or material fringe benefit plan in whichExecutive is participating immediately prior to such Change in Control or thetaking of any action by the Company that would adversely affect Executive’sparticipation in or reduce Executive’s benefits under any such plan, unlessExecutive is permitted to participate in other plans providing Executive withthe same benefits that the party effecting the Change in Control (or, ifapplicable, its Parent Corporation) provides to its most senior executiveofficers (or, in the case of a Parent Corporation, the most senior executiveofficers of its principal banking or financial services subsidiary), or (B)provide Executive with paid time-off in accordance with the most favorabletime-off policies of the Company and its affiliated companies as in effect forExecutive immediately prior to such Change in Control, including the creditingof all service for which Executive had been credited under such vacationpolicies prior to the Change in Control; or

(v)   the failureof the Company to obtain the assumption (and, if applicable, guarantee)agreement from any successor (and Parent Corporation) as contemplated inSection 9(b).

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Notwithstanding anything herein to the contrary,termination of employment by Executive for any reason during the 30-day periodcommencing six (6) months after the date of a Change in Control shallconstitute Good Reason.

An isolated, insubstantial and inadvertent actiontaken in good faith and which is remedied by the Company within ten (10) daysafter receipt of notice thereof given by Executive shall not constitute GoodReason. Executive’s right to terminate employment for Good Reason shall not beaffected by Executive’s incapacities due to mental or physical illness andExecutive’s continued employment shall not constitute consent to, or a waiverof rights with respect to, any event or condition constituting Good Reason;provided, however, that Executive must provide notice of termination ofemployment within one-hundred twenty (120) days following Executive’s knowledgeof an event constituting Good Reason or such event shall not constitute GoodReason under this Agreement.

(g)   “QualifyingTermination” means a termination of Executive’s employment (i) by theCompany other than for Cause, or (ii) by Executive for Good Reason.  Termination of Executive’s employment onaccount of death, Disability or Retirement shall not be treated as a QualifyingTermination.

(h)   “Retirement”means the termination of Executive’s employment on or after the first of themonth coincident with or following Executive’s attainment of age 65, or suchlater date as may be provided in a written agreement between the Company andthe Executive.

(i)     “Subsidiary”means any corporation or other entity in which the Company has a direct orindirect ownership interest of 50% or more of the total combined voting powerof the then outstanding securities or interests of such corporation or otherentity entitled to vote generally in the election of directors or in which theCompany has the right to receive 50% or more of the distribution of profits or50% of the assets upon liquidation or dissolution.

(j)     “TerminationPeriod” means the period of time beginning with a Change in Control andending two (2) years following such Change in Control. Notwithstanding anythingin this Agreement to the contrary, if (i) Executive’s employment is terminatedprior to a Change in Control for reasons that would have constituted aQualifying Termination if they had occurred following a Change in Control; (ii)Executive reasonably demonstrates that such termination (or Good Reason event)was at the request of a third party who had indicated an intention or takensteps reasonably calculated to effect a Change in Control; and (iii) a Changein Control involving such third party (or a party competing with such thirdparty to effectuate a Change in Control) does occur, then for purposes of thisAgreement, the date immediately prior to the date of such termination ofemployment or event constituting Good Reason shall be treated as a Change inControl.  For purposes of determining thetiming of payments and benefits to Executive under Section 4, the date of theactual Change in Control shall be treated as Executive’s Date of Terminationunder Section l(d).

**2.             Obligationof Executive**.  In theevent of a tender or exchange offer, proxy contest, or the execution of anyagreement that, if consummated, would constitute a Change in Control,

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Executiveagrees not to voluntarily leave the employ of the Company that may employExecutive, other than as a result of Disability, Retirement or an event thatwould constitute Good Reason if a Change in Control had occurred, until theChange in Control occurs or, if earlier, such tender or exchange offer, proxycontest, or agreement is terminated or abandoned.

**3.             Termof Agreement**.  ThisAgreement shall be effective on the date hereof and shall continue in effectuntil the Company shall have given two (2) years’ written notice ofcancellation; provided, that, notwithstanding the delivery of any such notice,this Agreement shall continue in effect for a period of two (2) years after aChange in Control, if such Change in Control shall have occurred during theterm of this Agreement.  Notwithstandinganything in this Section to the contrary, this Agreement shall terminate ifExecutive or the Company terminates Executive’s employment prior to a Change inControl except as provided in Section 1(j).

**4.             PaymentsUpon Termination of Employment**.

(a)    QualifyingTermination — Cash Payment.  Ifduring the Termination Period the employment of Executive shall terminatepursuant to a Qualifying Termination, then the Company shall provide toExecutive, subject to the provisions of Section 11 hereunder:

(i)    withintwenty (20) days following the Date of Termination a lump-sum cash amount equalto the sum of (A) Executive’s base salary through the Date of Termination andany bonus amounts that have become payable, to the extent not theretofore paidor deferred, (B) a pro rata portion of Executive’s annual bonus for the fiscalyear in which Executive’s Date of Termination occurs in an amount at leastequal to (x) Executive’s Bonus Amount, multiplied by (y) a fraction, thenumerator of which is the number of days in the fiscal year in which the Dateof Termination occurs through the Date of Termination and the denominator ofwhich is three hundred sixty-five (365), and reduced by (z) any amounts paidfrom the Company’s annual incentive plan for the fiscal year in which Executive’sDate of Termination occurs and (C) any accrued vacation pay, to the extent nottheretofore paid; plus

(ii)   withintwenty (20) days following the Date of Termination, a lump-sum cash amountequal to the sum of (1) two times Executive’s highest annual rate of basesalary during the 12-month period immediately prior to Executive’s Date of Termination,plus (2) two times Executive’s Bonus Amount; provided, however, that if Executive’s Date of Termination is within twoyears****of the earliest date onwhich termination by the Executive could otherwise be considered a Retirement (“RetirementDate”), such sum shall be multiplied by a fraction (“Adjustment Fraction”), thenumerator of which is equal to the number of full months from the Date ofTermination to the Retirement Date, and the denominator of which is equal to24.

(b)   QualifyingTermination — Continued Coverage.  Ifduring the Termination Period the employment of Executive shall terminatepursuant to a Qualifying Termination, the Company shall continue to provide,for a period of two (2) years****followingExecutive’s Date of Termination, Executive (and Executive’s dependents, ifapplicable) with the same level of medical, dental, accident, disability andlife insurance benefits upon substantially the same terms and conditions(including contributions required by Executive for such benefits) as existedimmediately prior to

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Executive’sDate of Termination (or, if more favorable to Executive, as such benefits andterms and conditions existed immediately prior to the Change in Control);provided, however, that if Executive’s Date of Termination is within one (1)year of Executive’s Retirement Date, the number of years of continued benefitscoverage (as described in this Section 4(b)) shall be equal to the product of(x) one, and (y) the Adjustment Fraction; provided, further, if Executivecannot continue to participate in the Company plans providing such benefits,the Company shall otherwise provide such benefits on the same after-tax basisas if continued participation had been permitted.  Notwithstanding the foregoing, in the eventExecutive becomes reemployed with another employer and becomes eligible toreceive welfare benefits from such employer, the welfare benefits describedherein shall be secondary to such benefits during the period of Executive’seligibility, but only to the extent that the Company reimburses Executive forany increased cost and provides any additional benefits necessary to giveExecutive the benefits provided hereunder. The Executive’s accrued benefits as of the Date of Termination under theCompany’s employee benefit plans shall be paid to Executive in accordance withthe terms of such plans.

(c)    QualifyingTermination — SERP Accrual. If during the Termination Period the employmentof Executive shall terminate pursuant to a Qualifying Termination, the Companyshall provide Executive with one (1) additional year of service credit underall non-qualified retirement plans and excess benefit plans in which theExecutive participated as of his Date of Termination; provided, however, thatif Executive’s Date of Termination is within two (2) years of Executive’sRetirement Date, the number of years of additional service credit (as describedin this Section 4(c)) shall be equal to the product of (x) two, and (y) theAdjustment Fraction.

(d)   QualifyingTermination — Voluntary Reduction of Payments. If during the TerminationPeriod the employment of Executive shall terminate pursuant to a QualifyingTermination, Executive shall have the right to direct that the Company reducethe amounts which it is otherwise required to pay to Executive under Section 4of this Agreement to the Safe Harbor Cap (as defined in Section 5(a) of thisAgreement).

(e)    Otherthan Qualifying Termination. If during the Termination Period theemployment of Executive shall terminate other than by reason of a QualifyingTermination, then the Company shall pay to Executive within thirty (30) daysfollowing the Date of Termination, a lump-sum cash amount equal to the sum of(1) Executive’s base salary through the Date of Termination and any bonusamounts that have become payable, to the extent not theretofore paid ordeferred, and (2) any accrued vacation pay, to the extent not theretofore paid.The Company may make such additional payments, and provide such additionalbenefits, to Executive as the Company and Executive may agree in writing. TheExecutive’s accrued benefits as of the Date of Termination under the Company’semployee benefit plans shall be paid to Executive in accordance with the termsof such plans.

(f)    Suspensionof Payments to Specified Employees. To the extent such suspension is required by Section 409A of theInternal Revenue Code of 1986, as amended (the “Code”) or Treasury Regulationsissued pursuant to Section 409A of the Code, if an amount is payable to theExecutive due to a Qualifying Termination, and if at the time of the QualifyingTermination the Executive is a “Specified Employee,” payment of all amountsunder Section 4(a)(ii) and Section 5, to

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theextent such payments constitute deferred compensation for purposes of Section409A of the Code, will be suspended for six months following the date of theQualifying Termination.  The Executivewill receive payment of such amounts on the first day following the six-monthsuspension period with interest on any delayed payment at the 30-year TreasuryBond rate as published in the Wall Street Journal.

(i)    A “SpecifiedEmployee” means an individual who is a “Key Employee” of the Company at a timewhen the Company’s stock is publicly traded on an established securitiesmarket.  The Executive will be a SpecifiedEmployee on the first day of the fourth month following any “IdentificationDate” on which the Executive is a Key Employee.

(ii)   TheExecutive is a “Key Employee” if at any time during the 12-month period endingon an Identification Date the Executive is: (A) an officer of the Companyhaving annual compensation greater than $140,000 (as adjusted in the samemanner as under Section 415(d) of the Code except that the base period will bethe calendar quarter beginning July 1, 2001, and any increase under thissentence which is not a multiple of $5,000 will be rounded to the next lowermultiple of $5,000); (B) a five-percent owner of the Company; or (C) aone-percent owner of the Company having an annual compensation greater than$150,000.  For purposes of determiningwhether an Executive is an officer under clause (A), nor more than 50 employees(or, if lesser, the greater of three or ten percent of the employees) will betreated as officers, and those categories of employees listed in Section414(q)(5) of the Code will be excluded.

(iii)  The “IdentificationDate” for purposes of this Agreement is December 31 of each calendar year.

**5.             CertainAdditional Payments by the Company.**

(a)   Anything inthis Agreement to the contrary notwithstanding, in the event it shall bedetermined that any payment, award, benefit or distribution (or anyacceleration of any payment, award, benefit or distribution) by the Company (orany affiliated entity) or any entity that effectuates a Change in Control (orany of its affiliated entities) to or for the benefit of Executive (whetherpursuant to the terms of this Agreement or otherwise, but determined withoutregard to any additional payments required under this Section 5) (the “Payments”)would be subject to the excise tax imposed by Section 4999 of the Code, or anyinterest or penalties are incurred by Executive with respect to such excise tax(such excise tax, together with any such interest and penalties, arehereinafter collectively referred to as the “Excise Tax”), then the Companyshall pay to Executive an additional payment (a “Gross-Up Payment”) in anamount such that after payment by Executive of all taxes (including any ExciseTax) imposed upon the Gross-Up Payment, Executive retains an amount of theGross-Up Payment equal to the sum of (i) the Excise Tax imposed upon thePayments, and (ii) the product of any deductions disallowed because of theinclusion of the Gross-up Payment in Executive’s adjusted gross income and thehighest applicable marginal rate of federal income taxation for the calendaryear in which the Gross-up Payment is to be made. Such Gross-Up Payment will bemade at the same time payment is made to the Executive pursuant to Section4(a)(ii).  For purposes of determiningthe amount of the Gross-up Payment, the Executive shall be deemed to (A) payfederal income taxes at the highest marginal rates of federal income taxationfor the calendar

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yearin which the Gross-up Payment is to be made, (B) pay applicable state and localincome taxes at the highest marginal rate of taxation for the calendar year inwhich the Gross-up Payment is to be made, net of the maximum reduction infederal income taxes which could be obtained from deduction of such state andlocal taxes and (C) have otherwise allowable deductions for federal income taxpurposes at least equal to the Gross-up Payment.

Notwithstandingthe foregoing provisions of this Section 5(a), if it shall be determined thatExecutive is entitled to a Gross-Up Payment, but that the Payments would not besubject to the Excise Tax if the Payments were reduced by an amount that isless than 5% of the portion of the Payments that would be treated as “parachutepayments” under Section 28OG of the Code, then the amounts payable to Executiveunder this Agreement shall be reduced (but not below zero) to the maximumamount that could be paid to Executive without giving rise to the Excise Tax(the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to Executive.The reduction of the amounts payable hereunder, if applicable, shall be made byreducing first the payments under Section 4(a)(ii), unless an alternativemethod of reduction is elected by Executive. For purposes of reducing thePayments to the Safe Harbor Cap, only amounts payable under this Agreement (andno other Payments) shall be reduced. If the reduction of the amounts payablehereunder would not result in a reduction of the Payments to the Safe HarborCap, no amounts payable under this Agreement shall be reduced pursuant to thisprovision.

(b)   Subject tothe provisions of Section 5(a), all determinations required to be made underthis Section 5, including whether and when a Gross-Up Payment is required, theamount of such Gross-Up Payment, the reduction of the Payments to the SafeHarbor Cap and the assumptions to be utilized in arriving at suchdeterminations, shall be made by the public accounting firm that is retained bythe Company as of the date immediately prior to the Change in Control (the “AccountingFirm”), which shall provide detailed supporting calculations both to theCompany and Executive within fifteen (15) business days of the receipt ofnotice from the Company or the Executive that there has been a Payment, or suchearlier time as is requested by the Company (collectively, the “Determination”).In the event that the Accounting Firm is serving as accountant or auditor forthe individual, entity or group effecting the Change in Control, Executive mayappoint another regionally or nationally recognized public accounting firm tomake the determinations required hereunder (which accounting firm shall then bereferred to as the Accounting Firm hereunder). All fees and expenses of theAccounting Firm shall be borne solely by the Company and the Company shallenter into any agreement requested by the Accounting Firm in connection withthe performance of the services hereunder. The Gross-up Payment under thisSection 5 with respect to any Payments shall be made no later than thirty (30)days following such Payment. If the Accounting Firm determines that no ExciseTax is payable by Executive, it shall furnish Executive with a written opinionto such effect, and to the effect that failure to report the Excise Tax, ifany, on Executive’s applicable federal income tax return will not result in theimposition of a negligence or similar penalty. In the event the Accounting Firmdetermines that the Payments shall be reduced to the Safe Harbor Cap, it shallfurnish Executive with a written opinion to such effect. The Determination bythe Accounting Firm shall be binding upon the Company and Executive. As aresult of the uncertainty in the application of Section 4999 of the Code at thetime of the Determination, it is possible that Gross-Up Payments which will nothave been made by the Company should have been made (“Underpayment”) orGross-up Payments are made by the Company which should not have

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beenmade (“Overpayment”), consistent with the calculations required to be madehereunder. In the event that the Executive thereafter is required to makepayment of any Excise Tax or additional Excise Tax, the Accounting Firm shalldetermine the amount of the Underpayment that has occurred and any suchUnderpayment (together with interest at the rate provided in Section1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for thebenefit of Executive. In the event the amount of the Gross-up Payment exceedsthe amount necessary to reimburse the Executive for his Excise Tax, theAccounting Firm shall determine the amount of the Overpayment that has beenmade and any such Overpayment (together with interest at the rate provided inSection 1274(b)(2) of the Code) shall be promptly paid by Executive (to theextent he has received a refund if the applicable Excise Tax has been paid tothe Internal Revenue Service) to or for the benefit of the Company. Executiveshall cooperate, to the extent his expenses are reimbursed by the Company, withany reasonable requests by the Company in connection with any contests ordisputes with the Internal Revenue Service in connection with the Excise Tax.

**6.             WithholdingTaxes.**  The Company maywithhold from all payments due to Executive (or his beneficiary or estate)hereunder all taxes that, by applicable federal, state, local or other law, theCompany is required to withhold therefrom.

**7.             Reimbursementof Expenses**.  If anycontest or dispute shall arise under this Agreement involving termination ofExecutive’s employment with the Company or involving the failure or refusal ofthe Company to perform fully in accordance with the terms hereof, the Companyshall reimburse Executive, on a current basis, for all reasonable legal feesand expenses, if any, incurred by Executive in connection with such contest ordispute (regardless of the result thereof), together with interest in an amountequal to the prime rate as published in the Wall Street Journal fromtime to time in effect, but in no event higher than the maximum legal ratepermissible under applicable law, such interest to accrue from the date theCompany receives Executive’s statement for such fees and expenses through thedate of payment thereof, regardless of whether or not Executive’s claim isupheld by an arbitration panel.

**8.             Scopeof Agreement**.  Nothingin this Agreement shall be deemed to entitle Executive to continued employmentwith the Company or its Subsidiaries, and if Executive’s employment with theCompany shall terminate prior to a Change in Control, Executive shall have nofurther rights under this Agreement (except as otherwise provided hereunder);provided, however, that any termination of Executive’s employment during theTermination Period shall be subject to all of the provisions of this Agreement.

**9.             Successors;Binding Agreement.**

(a)   ThisAgreement shall not be terminated by any Business Combination. In the event ofany Business Combination, the provisions of this Agreement shall be bindingupon the Surviving Corporation, and such Surviving Corporation shall be treatedas the Company hereunder.

(b)   The Companyagrees that in connection with any Business Combination, it will cause anysuccessor entity to the Company unconditionally to assume (and for any ParentCorporation in such Business Combination to guarantee), by written instrumentdelivered to

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Executive(or his beneficiary or estate), all of the obligations of the Companyhereunder. Failure of the Company to obtain such assumption and guarantee priorto the effectiveness of any such Business Combination that constitutes a Changein Control shall be a breach of this Agreement and shall constitute Good Reasonhereunder and shall entitle Executive to compensation and other benefits fromthe Company in the same amount and on the same terms as Executive would beentitled hereunder if Executive’s employment were terminated following a Changein Control by reason of a Qualifying Termination. For purposes of implementingthe foregoing, the date on which any such Business Combination becomeseffective shall be deemed the date Good Reason occurs, and shall be the Date ofTermination if requested by Executive.

(c)   This Agreementshall inure to the benefit of and be enforceable by Executive’s personal orlegal representatives, executors, administrators, successors, heirs,distributees, devisees and legatees. If Executive shall die while any amountswould be payable to Executive hereunder had Executive continued to live, allsuch amounts, unless otherwise provided herein, shall be paid in accordancewith the terms of this Agreement to such person or persons appointed in writingby Executive to receive such amounts or, if no person is so appointed, toExecutive’s estate.

**10.           Notice.**

(a)   Forpurposes of this Agreement, all notices and other communications required orpermitted hereunder shall be in writing and shall be deemed to have been dullygiven when delivered or five (5) days after deposit in the United States mail,certified and return receipt requested, postage prepaid, addressed as follows:
| If to Executive:    | At the address  set forth below the signatory |
|---------------------|-----------------------------------------------|
|                |                                          |
|                |                                          |
| If to the  Company: | MainSource  Financial Group, Inc.             |
|                | 201 North  Broadway                           |
|                | Greensburg,  Indiana 47240                    |
|                | Attn: Chief  Executive Officer                |

 

orto such other address as either party may have furnished to the other inwriting in accordance herewith, except that notices of change of address shallbe effective only upon receipt.

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(b)   A writtennotice of Executive’s date of termination by the Company or Executive, as thecase may be, to the other, shall (i) indicate the specific terminationprovision in this Agreement relied upon, (ii) to the extent applicable, setforth in reasonable detail the facts and circumstances claimed to provide abasis for termination of Executive’s employment under the provision soindicated and (iii) specify the Date of Termination (which date shall not beless than fifteen (15) days (thirty (30), if termination is by the Company forDisability) nor more than sixty (60) days after the giving of suchnotice).  The failure by Executive or theCompany to set forth in such notice any fact or circumstance that contributesto a showing of Good Reason or Cause shall not waive any right of Executive orthe Company hereunder or preclude Executive or the Company from asserting suchfact or circumstance in enforcing Executive’s or the Company’s rightshereunder.

**11.           FullSettlement; Resolution of Disputes.**  The Company’s obligation to make any paymentsprovided for in this Agreement and otherwise to perform its obligationshereunder shall be in lieu of and in full settlement of all other severancepayments to Executive under any other severance or employment agreement betweenExecutive and the Company, and any severance plan of the Company.  The Company’s obligations hereunder shall notbe affected by any set-off, counterclaim, recoupment, defense or other claim,right or action that the Company may have against Executive or others.  In no event shall Executive be obligated toseek other employment or take other action by way of mitigation of the amountspayable to Executive under any of the provisions of this Agreement and, exceptas provided in Section 4(b), such amounts shall not be reduced whether or notExecutive obtains other employment.  Anydispute or controversy arising under or in connection with this Agreement shallbe settled exclusively by arbitration in Indianapolis, Indiana by threearbitrators in accordance with the rules of the American ArbitrationAssociation then in effect.  The resultsof the arbitration will be binding on both parties and may not be appealed.  Judgment may be entered on the arbitrators’award in any court having jurisdiction. The Company shall bear all costs and expenses arising in connection withany arbitration proceeding pursuant to this Section.

**12.           Employmentwith Subsidiaries**. Employment with the Company for purposes of this Agreement shall includeemployment with any Subsidiary.

**13.           Survival**.  The respective obligations and benefitsafforded to the Company and Executive as provided in Sections 4 (to the extentthat payments or benefits are owed as a result of a termination of employmentthat occurs during the term of this Agreement), 5 (to the extent that Paymentsare made to Executive as a result of a Change in Control that occurs during theterm of this Agreement), 6, 7, 9(c) and 11 shall survive the termination ofthis Agreement.

**14.           GoverningLaw; Validity**.  Theinterpretation, construction and performance of this Agreement shall begoverned by and construed and enforced in accordance with the internal laws ofthe State of Indiana without regard to the principle of conflicts of laws.  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provision of this Agreement, which other provisions shall remain infull force and effect.

**15.           Counterparts**.  This Agreement may be executed incounterparts, each of which shall be deemed to be an original and all of whichtogether shall constitute one and the same instrument.

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**16.           Miscellaneous.**  No provision of this Agreement may bemodified or waived unless such modification or waiver is agreed to in writingand signed by Executive and by a duly authorized officer of the Company.  No waiver by either party hereto at any timeof any breach by the other party hereto of, or compliance with, any conditionor provision of this Agreement to be performed by such other party shall bedeemed a waiver of similar or dissimilar provisions or conditions at the sameor at any prior or subsequent time. Except as set forth in Sections l(b) and l(f), the failure by Executiveor the Company to insist upon strict compliance with any provision of thisAgreement or to assert any right Executive or the Company may have hereundershall not be deemed to be a waiver of such provision or right or any otherprovision or right of this Agreement. Except as otherwise specifically provided herein, the rights of, andbenefits payable to, Executive, his estate or his beneficiaries pursuant tothis Agreement are in addition to any rights of, or benefits payable to,Executive, his estate or his beneficiaries under any other employee benefitplan or compensation program of the Company.

**IN WITNESS WHEREOF**,the Company has caused this Agreement to be executed by a duly authorizedofficer of the Company and Executive has executed this Agreement, in each caseas of the day and year first set forth above.
|            | **MAINSOURCE  FINANCIAL GROUP, INC.** |
|------------|---------------------------------------|
| ** ** | ** **                            |
| ** ** | ** **                            |
| ** ** | By:                                   | ** ** |
| ** ** | James L. Saner, Sr.                   |
| ** ** | President and Chief Executive Officer |
| ** ** | ** **                            |
| ** ** | ** **                            |
| ** ** | **EXECUTIVE**                         |
| ** ** | ** **                            |
| ** ** | ** **                            |
| ** ** | ** **                            |
| ** ** | ** **                            |   | James M.  Anderson |
| ** ** | ** **                            |   | 88 Dogwood Trail |
| ** ** | ** **                            |   | Batesville,  Indiana 47006 |
|            |                                       |  |  |  |

 

 

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