Non-qualified Stock Option Agreement

10 and 13 Amended as of 2/19/97
13 Amended as of 12/11/97


1ST SOURCE CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT


This option is granted effective as of January 1, 1992, by 1ST SOURCE CORPORATION (the "Corporation") to Christopher J. Murphy, III (the "Optionee") in accordance with the following terms and conditions:


1. OPTION GRANT. The Corporation hereby grants to the optionee options (the "Options"), which options are not intended to qualify under Section 422A of the Internal Revenue Code of 1986, as amended, to purchase 50,000 shares (the "Option Shares") of the common stock of the Corporation at the price of $29.75 per share (the "Exercise Price"). The Exercise Price is equal to the last sale price as reported for the Corporation's common stock on December 31, 1991, by the NASDAQ Exchange.


2. EXERCISE PERIOD. The Options shall be exercisable only during the period (the "Exercise Period") commencing from the date on which such Options vest (as defined in Section 3) and ending at 5:00 p.m., South Bend, Indiana time, on the date ten (10) years after the date on which such options vest, such later time and date being hereinafter referred to as the "Expiration Date." For example, the Exercise Period for the 10,000 Option Shares which vest on January 1, 1992, shall begin on January 1, 1992, and expire on December 31, 2002. During the Exercise Period, all vested Options as defined in Section 3 below shall be immediately exercisable in whole at any time or in part from time to time.


3. VESTING OF OPTIONS. Twenty percent (20%) of the aggregate Options granted hereunder will vest on January 1, 1992, with the remaining Options to vest at the rate of twenty percent (20%) of the aggregate options per year on each succeeding January 1 (i. e., 20% on January 1, 1993, 20% on
- - January 1, 1994, etc.).


4. METHOD OF EXERCISE. All vested Options may be exercised during the applicable Exercise Period in whole or in part by giving written notice to the corporation specifying the number of Option Shares to be purchased. The notice must be directed to the Corporation at its principal office address, which currently is the address set forth in Paragraph 14. The date of exercise is the date on which such notice is received by the Corporation. Such notice must be accompanied by payment to the Corporation in full for the Option Shares to be purchased upon such exercise, in cash, certified check, cashier's check, money order or other form of payment acceptable to the Corporation.


2


Exhibit 10(h)


5. DELIVERY OF SHARES. Promptly after such payment referred to in Section 4, the Corporation shall issue and deliver to the Optionee a certificate or certificates representing the shares of stock so purchased, registered in the name of the Optionee.


6. NON-TRANSFERABILITY. The Options may not be assigned or transferred except, in the event of the death of the Optionee, by will or the laws of descent and distribution to the extent provided in Section 7 below. The Options are exercisable during the Optionee's lifetime only by the Optionee.


7. TERMINATION OF SERVICE OF THE OPTIONEE.


(a) Death or Disability. If the Optionee dies or becomes
------------------- disabled (as hereinafter defined) following the date of the grant of the Options and while in the employ of the Corporation, and while Options granted hereunder are still in force and unexpired, the Optionee or his designated beneficiary or estate may exercise such options within a period of one year succeeding the death or disability of the optionee but only to the extent that the Option was vested at date of death or disability and, therefore, the Optionee was entitled to exercise such Options on the date of death or disability. No Options shall vest on or after date of termination of employment for death or disability. The term "disabled" means, the Optionee is unable to engage in employment activity for the Corporation by reason of a physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration, as verified by competent medical evidence.


(b) Reasons Other Than Death or Disability. If the Optionee's
-------------------------------------- employment with the Corporation is terminated for any reason other than death or disability, any and all unexercised Options shall expire and terminate immediately.


8. ADJUSTMENTS FOR CHANGES IN CAPITALIZATION OF THE CORPORATION. In the event of any change in the outstanding shares of common stock by reason of any reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation, or any change in the corporate structure of the Corporation or in the shares of common stock, the number and class of shares covered by the Options and the Exercise Price shall be appropriately adjusted by the Corporation, whose determination shall be conclusive.


9. EFFECT OF CHANGE IN CONTROL WHERE CORPORATION SURVIVES. Each of the events specified in the following clauses (i) through (iii) of this Paragraph 9 shall be deemed a "change in control": (i) any third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial owner of 25% or more of the then outstanding shares of common stock of the Corporation or the combined voting power of the then outstanding voting securities of the Corporation entitled to vote for the election of the Board of Directors of the Corporation (ii) as a result of, or in connection with, any cash tender offer, exchange offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Corporation shall cease to constitute a majority of the Board of Directors of the Corporation or (iii) the shareholders of the Corporation shall approve an agreement providing a sale or other disposition of all or substantially all the assets of the Corporation. In the event of a "change in control," all Options theretofore granted and not fully exercisable shall become fully vested and become exercisable in full upon the happening of such event and shall remain so exercisable in accordance with their t ...