MainSource Financial Group,Inc. (NASDAQ:MSFG) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Based upon the foregoing, the Committee determined that the
incentive compensation to be paid to the Companys Chief
Executive Officer, Chief Financial Officer and the other Named
Executive Officers under the STIP for services performed from
January1, 2016, to December31, 2016 is as follows:

*Mr.Tressler retired from the Company on December31, 2016. to
his Retirement and Settlement Agreement, he will be paid the
current portion of any STIP incentive compensation awarded by
the Committee and will forfeit the deferred portion. This chart
reflects only the current portion of the award.

The STIP includes a mandatory deferral feature, by which
two-thirds of the STIP incentive compensation is paid in the
year it is awarded, and one-third is paid on the first
anniversary of the initial payment, provided the employee
remains employed by the Company on such date. STIP awards are
also subject to claw-back to the extent required by federal
laws or regulations, including those required under
Sarbanes-Oxley and Dodd-Frank.

2016 Long-Term Incentive Plan Awards

Additionally, at its meeting on February27, 2017, the Committee
granted Restricted Stock and Performance Share Units to certain
named executive officers to the Companys long term incentive
program (LTI Program).

The LTI Program contemplates the payment of compensation in a
combination of Restricted Stock (50%) and Performance Share
Units (50%). Each named executive officers target payout level
is equal to a percentage of his or her base salary, as set
forth below:

The Restricted Stock is awarded each year equal to one-half of
the target payout, and vests on the third anniversary of the
date of the award provided the employee remains employed on the
vesting date (unless he or she died or became disabled). Each
restricted stock award is evidenced by an award agreement
between the executive and the Company which includes the
following terms:

the grantee will become vested in 50% of the award on the third
anniversary of the grant date; and

the Committee will have the right, in its sole discretion, to
cancel 60% of the award during the first year following the
grant date, 40% of the award during the second year following
the grant date, and 20% of the award during the third year
following the grant date, if it determines that the Company
suffered a material negative impact in one of those years as a
result of a decision or event that occurred during the year in
which the restricted stock was earned.

The Performance Share Units are granted each year equal to
one-half of the target payout. Each year is the beginning of a
new three-year performance period. At that time, the Committee
establishes performance measures, goals and payout calibration
for the Performance Share Units. Then, at the end of each
three-year performance period, the Committee will certify the
results of the performance measures and goals and will pay the
earned awards out in shares of Company common stock. Dividends
earned during each three-year performance period are accrued
and paid at the end of the performance period, based upon the
final number of shares earned.

The performance measures and goals are based on financial and
shareholder measures, and are evaluated relative to internal
goals and the performance of the Companys peers. Once the
performance measures and goals are established, the Committee
establishes threshold, target and superior levels of
performance. The LTI Program payout of shares begins once the
Company achieves the pre-established threshold (thus, no payout
will occur if the performance is equal to or below the
threshold). Each executives target payout is achieved once the
performance equals the target level, and the maximum payout is
achieved once the performance equals the superior level (with
interpolation between discrete points).

The Committee has the authority to change the performance
measures, goals and targets each year at the beginning of each
three-year performance period.

The grant of Performance Share Units by the Committee is
evidenced by an award agreement between the executive and the
Company which provides that each executive will receive shares
of Company stock when the Companys actual performance as
compared to its peers and long-term goals exceeds certain
thresholds, determined as of the end of each three-year period,
provided the executive remains employed by the Company on such
date.

The Committee determined the LTIP grants to the Companys Chief
Executive Officer, Chief Financial Officer and the other Named
Executive Officers for the three year period beginning
January1, 2017 and ending December31, 2019, are as follows:

(1)Based upon a share price of $35.04, which was the closing
price of the Companys common stock on February27, 2017, the
date of grant.

2017 Short Term Incentive Plan.

The Committee also determined the following performance
measures for the STIP applicable to the executives performance
in 2017:

The STIP payout will begin once the Companys performance for
each measure (the Actual Performance) exceeds the
pre-established Threshold for the applicable measure (thus, no
payout will occur if the Actual Performance for all measures is
equal to or below the Threshold). Each executives target payout
is achieved once the Actual Performance equals the Target
level, and the maximum payout is achieved once the Actual
Performance equals the Superior level, each of which are set by
the Committee based on the Companys annual budget.

For Actual Performance at levels in between the Threshold and
150% of the Target, the payout percentage is interpolated. For
example Actual Performance equal to 60% of the Target equates
to a payout of 60% of the Target. Each Named Executive Officers
target payout level is equal to a percentage of his base
salary, as set forth below:

STIP awards are also subject to claw-back to the extent
required by federal laws or regulations. A complete description
of the STIP is set forth in the Companys Proxy Statement for
the 2016 Annual Meeting of Shareholders filed with the
Securities and Exchange Commission on March23, 2016.