8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 13, 2006

GERMAN AMERICAN BANCORP

(Exact name of registrant as specified in its charter)

Indiana	0-11244	35-1547518
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

711 Main Street Box 810 Jasper, Indiana	47546
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (812) 482-1314

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

࿳ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

࿳ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

࿳ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

࿳ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.Entry into a Material Definitive Agreement.

On February 13, 2006, the Board of Directors (the “Board”) of German American Bancorp (the "Company"), by the vote of the members of the Board who are not “interested directors” within the meaning of the Marketplace Rules of the NASDAQ Stock Market, Inc., established the balanced scorecards for the executive officers that, taken together, constitute the Company's Management Incentive Plan for such executive officers for 2006, all as recommended by the Human Resources Committee of the Board (the “HR Committee”). In addition, on February 15, 2006, the Long-Term Incentive Award Committee of the Board commenced awarding a new type of long-term incentive award under the Company's 1999 Long-Term Equity Incentive Plan (the "1999 Plan").

Adoption of 2006 Management Incentive Plan

As in past years, executive officers of the Company were compensated for their services in 2005 under a program (known as the Management Incentive Plan) that included the opportunity to receive incentive awards in the form of short-term incentive cash awards and long-term equity incentive awards. The Board of Directors on February 13, 2006, accepted the recommendation of the Human Resources Committee that the Management Incentive Plan be continued for 2006, and established the criteria for personal 2006 "balanced scorecards" under the Plan for each of the Company’s five executive officers, including short-term and long-term entitlements.

Short-term Cash Incentive Scorecards. The Board (upon the recommendation of the HR Committee) established target short-term cash incentive awards for executive officers as percentages of their current year base salary (which range from 30% to 50% of 2006 base salary, depending upon the executive), with maximum awards (payable only if targeted performance and other criteria are substantially exceeded) of as much as 200% of the target awards. The scorecard of Mark A. Schroeder, President and Chief Executive Officer of the Company (the "CEO"), specifies a target award of 50% of his base salary for 2006; hence, if all targeted corporate and individual performance criteria are deemed to have been exceeded by the requisite amount with respect to the CEO's scorecard during 2006, the CEO could earn a short-term cash incentive award for his services during 2006 equal to 100% of his 2006 base salary.

Short-term cash incentive award entitlements for services during 2006 under the scorecards will be based on (a) formula assessments of 2006 corporate performance (such corporate performance measures to represent 80% of the potential short-term incentive award), and (b) formula and/or discretionary assessments of personal or departmental performance during 2006 (representing the remaining 20% of the potential award).

Of the corporate performance portion, 50% will be determined by the Company’s performance (benchmarked in relation to the Company’s percentile ranking within a peer group selected by the HR Committee of certain banking companies located in the Midwest) in growth in earnings per share (25% of total corporate performance criteria) and in revenue as a percent of personnel-related expense (an additional 25% of total corporate performance criteria). The remaining 50% of the corporate performance portion of each executive officer’s 2006 short-term incentive scorecard will be determined by the Company’s percentage growth in its core loans and core deposits.

Long-term Incentive Awards Scorecards. Long-term incentive awards under the Management Incentive Plan have historically been awarded in the form of incentive stock options, with the number of shares determined based upon the dollar values of the long-term incentive awards deemed to have been earned pursuant to the prior year’s scorecards. For services during 2006, executive officers participating in the Management Incentive Plan may earn the right to be awarded long-term incentive awards in 2007, based upon the Company’s average performance (as benchmarked against the Company’s average annual percentile ranking within the peer group described above) in earnings per share growth and return on equity over the three-year period ending December 31, 2006. Like the cash incentive award target values, the dollar values of target long-term incentive awards for executive officers are figured as percentages of their current year base salary, which percentages range from 30 % to 50% of 2006 base salary, depending upon the executive; also like the cash incentive award scorecards, long-term incentive awards (payable only if targeted performance and other criteria are substantially exceeded on an average basis over the three-year period ending December 31, 2006) may be of as much as 200% of the target awards. The dollar value of the CEO’s target long-term incentive award for 2006 is equal to 50% of his 2006 base salary; accordingly, his long term incentive award for 2006 could be as much as 100% of his 2006 base salary, but only if the targeted criteria are both substantially exceeded.

Change in Type and Grant of New Long-Term Incentive Awards

Also on February 13, 2006, the Board, upon the recommendation of the HR Committee, determined the dollar amounts of the cash incentive awards and equity incentive awards that are payable in 2006 to the executive officers, including the CEO, for their services during 2005. These amounts were determined in accordance with the criteria for determination of the amounts established by the respective 2005 scorecards that were previously disclosed by the Company in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 4, 2005.

Effective February 15, 2006, the Long-Term Incentive Award Committee (formerly known as the Stock Option Committee) (the "Award Committee") awarded a new type of long-term incentive award under the 1999 Plan. In prior years, awards representing the dollar amounts of long-term incentives deemed to be earned by the executives under their respective personal scorecards were granted in the form of incentive stock options. At the recommendation of the Board and the Human Resources Committee, the Award Committee effective February 15, 2006, determined that future awards of long-term incentives under the 1999 Plan should generally be made in the form of restricted stock, granted in tandem with cash credit entitlements (such tandem grants of restricted stock and cash entitlements together are referred to in this Report as "Restricted Stock Awards"). The Restricted Stock Awards are subject to forfeiture in the event that the recipient of the grant does not continue in employment with the Company through December 15 of the year of grant, at which time they generally vest 100 percent. These and other terms of the Restricted Stock Awards granted on February 15, 2006, by the Award Committee to the Company’s executive officers are more fully set forth in the form of Restricted Stock Award Agreement, the form of which is filed as part of this report as Exhibit 99, and is incorporated herein by reference.

On February 15, 2006, the Award Committee awarded Restricted Stock Awards on the form of the Restricted Stock Award Agreement to executive officers and other management employees, each consisting of newly-issued common stock of the Company (subject to the restrictions and forfeiture conditions set forth in the form of Restricted Stock Award Agreement) which were deemed to have a value of $12.94 per share (based on the NASDAQ Official Closing Price of the Company's common stock on February 14, 2006), and rights to receive cash payments in a dollar amount approximately equal to the dollar value of the restricted stock (which cash rights are subject to similar forfeiture conditions). Of these Restricted Stock Awards, the Award Committee granted to the five executive officers of the Company (in satisfaction of the Company's obligations to make long-term incentive awards in respect of the performance of the Company under their respective personal 2005 scorecards) Restricted Stock Awards with face values (approximately half in the form of restricted stock and half in the form of cash entitlements) as follows: $62,400 to Mr. Schroeder (CEO), $29,867 to Mr. Ewing, $18,400 to Mr. Ruhe, $18,400 to Mr. Rust, and $29,867 to Mr. Sendelweck.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits. The exhibit listed in the Exhibit Index that immediately follows the Signatures page to this Report is incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	German American Bancorp
Date: February 17, 2006	By:	/s/ Mark A. Schroeder
		Mark A. Schroeder
		President and Chief Executive Officer

EXHIBIT INDEX

99 Form of Restricted Stock Award Agreement that evidences the terms of awards of restricted stock grants and related cash entitlements granted under the 1999 Long-Term Equity Incentive Plan

EX-99

GERMAN AMERICAN BANCORP

Restricted Stock Award Agreement for _______________ (“Participant”)

______________, 200__

German American Bancorp (the "Company") is pleased to grant to you an incentive award pursuant to its long-term incentive ("LTI") award program consisting of certain shares of Common Stock of the Company (including the accompanying preferred stock purchase rights) (the "Common Stock"), and rights to receive cash payments and credits (such shares and cash rights being referred to as "your Award") subject to certain restrictions under the Company's 1999 Long-Term Equity Incentive Plan (the "Plan") and this Agreement ("Agreement"). This Agreement and the shares and cash rights granted hereby are subject to the terms and conditions of the Plan, the terms of which are incorporated herein. Any capitalized term that is not defined in this Agreement has the meaning described by the Plan. Please see the Plan document for more information regarding your rights and obligations under this Agreement.

Please execute this Agreement by signing both copies. Return one copy within thirty (30) days of its date to Terri Eckerle, Shareholder Relations, German American Bancorp, 711 Main Street, Box 810, Jasper, Indiana 47546. Retain one copy of the Agreement for yourself along with the enclosed Plan.

1.Grant of the Award. The Company hereby grants you, as of the date specified above (the "Grant Date") an Award consisting of (a) _________ (____) [here insert number in both words and in figures] shares of Common Stock, with an aggregate value as of the Grant Date of ________ Dollars ($__________)[here insert number in both words and in figures] based on the NASDAQ Official Closing Price of the Common Stock on the last trading day before the Grant Date, and (b) a cash credit (payable without interest as set forth in this Agreement to you or for credit to your account as provided by Section 10 of this Agreement) of _________ Dollars ($__________) [here insert number in both words and in figures]. We sometimes refer in this Agreement to the shares of Common Stock that are part of the Award (including any other securities distributed in respect of the shares of Common Stock, or in substitution for those shares, by reason of an adjustment provided for in Section 8) as the "Restricted Stock" and to the cash credit that is part of this Award as the "LTI Cash Right." This Award is granted to you subject to the terms and conditions specified in this Agreement and the Plan.

2.Vesting of the Award. Subject to earlier forfeiture and cancellation pursuant to the Plan and this Agreement and possible acceleration as provided by Article VIII of the Plan, your rights to retain the Award (including the Restricted Stock and the LTI Cash Right) will vest as of 12:01 A.M. Jasper time on the morning of December 15 of this year ("Vesting Date"). The period prior to the Vesting Date is referred to in this Agreement as the Restricted Period. The Long-Term Incentive Award Committee of the Board of Directors of the Company, which administers the Plan (the "Committee"), shall have the authority, in its sole judgment (which shall be conclusive and binding) to determine whether the conditions to vesting specified by this Agreement and the Plan have been satisfied as of the Vesting Date or any other date. The Committee may also waive the provisions of Section 5 or otherwise shorten the Restricted Period as to any or all of the Award, and in connection with such actions may cause the Award to vest at an earlier date, whenever the Committee may determine that such action is appropriate by reason of changes in applicable tax or other laws or accounting principles or interpretations, or by reason of other changes in circumstances occurring after the Grant Date.

3.Your Rights in Award before Vesting. Except as otherwise

provided in this Agreement, you shall have all the rights of a holder of Common Stock in respect of each of your shares of Restricted Stock that are included in the Award during the Restricted Period, including, but not limited to, the right to receive all cash dividends paid on the Restricted Stock that are declared with a record date on or after the Grant Date and the right to vote the Restricted Stock on all matters to come for a vote by the holders of the Common Stock with a record date on or after the Grant Date. You shall have no right to receive any benefit with respect to the LTI Cash Right during the Restricted Period.

4.Non-Certificated Nature of Restricted Stock during the Restricted Period. The Company has directed its registrar and transfer agent (the "Transfer Agent") to issue the shares of Restricted Stock in your name as of the Grant Date, and to evidence the issuance of such shares of Restricted Stock to you by crediting the number of such shares of Restricted Stock to an account that has been established in your name on the Transfer Agent's books (your "Restricted Stock Account"). During the Restricted Period, the Company shall have no obligation to cause a certificate evidencing any of the shares of Restricted Stock to be prepared or delivered. Any cash dividends payable in respect of the Restricted Stock during the Restricted Period pursuant to Section 3 shall similarly be credited, without interest, to your Restricted Stock Account, unless you otherwise direct, in which event such dividends will be paid to such account as you direct.

5.Forfeiture and Cancellation of the Award; Conversion of Award in Certain Cases

(a)   Continuing Employment Condition. If your period of continuing employment ("Employment Period") with the Company and its Subsidiaries terminates during the Restricted Period otherwise than by reason of a Qualifying Circumstance (as defined below), your Award (including your Restricted Stock and all associated property and rights, and your right to receive the benefit of the cash credit) shall be forfeited and cancelled in its entirety effective as of the last day of your Employment Period. If your Employment Period terminates during the Restricted Period by reason of a Qualifying Circumstance, your Award will be deemed to be fully earned, but in such event the Restricted Stock (including any and all associated property and rights) portion of the Award shall be deemed to have been automatically converted as of the last day of the Employment Period into a right to receive payment of additional cash, without interest (in an amount equal to the aggregate value of the Restricted Stock as of the Grant Date that is specified in Section 1 of this Agreement) at the same time as the payment (or credit) is made to you or for your account pursuant to the LTI Cash Right portion of the Award. In the event of any forfeiture or cancellation of your Restricted Stock pursuant to this Section 5 (including any automatic conversion of your Restricted Stock into additional cash rights as described in the preceding sentence), your shares of Restricted Stock shall be deemed to have been reacquired by the Company and cancelled effective as of the last day of your Employment Period, and you therefore shall not have the right to receive any cash dividends or other distributions with respect to the Restricted Stock that are declared with a record date after the Employment Period. The existence or non-existence of a Qualifying Circumstance, and the existence and effective date of any termination of your Employment Period, shall, in the event of any uncertainty or dispute, be determined for all purposes under the Plan and this Agreement by the Committee, whose judgment on such matters shall be conclusive and binding.

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(b)   Qualifying Circumstance. For purposes of this Section 5, a "Qualifying Circumstance" means, with reference to an interruption or termination of your status as an employee of the Company or any of its Subsidiaries, an interruption or termination (i) that occurs due to the your death or disability (as determined by any disability policy or program maintained by the Company), or (ii) that occurs after you have attained the age of 62.

(c)   Immediate Vesting in Event of Change of Control. In the event that a Change of Control (as defined by Section 11.01(d) of the Plan) occurs during the Restricted Period, and prior to the date of any forfeiture and cancellation of your Award, then the Vesting Date of your Award shall be deemed to have been accelerated to the date of the Change of Control, and your Award (including the Restricted Stock and the LTI Cash Right) shall be deemed fully non-restricted and non-forfeitable as of such date, unless and to the extent otherwise specifically provided by Article VIII of the Plan.

(d)   Deemed Terminations (In Absence of Any Change of Control). For purposes of this section 5, your Employment Period shall be deemed to terminate before the end of the Restricted Period, even if it does not actually so terminate, if, before the end of the Restricted Period, and before the occurrence of a Change of Control (as defined by Section 11.01(d) of the Plan), (i) you give notice to the Company or any of its Subsidiaries of the termination of your association with them in all capacities (whether as a director, officer, employee or consultant) effective as of a date before or within 60 days after the end of the Restricted Period, (ii) you take any action, such as accepting another position, that, in the judgment of the Committee, indicates that you definitely plan to terminate your association with the Company and its Subsidiaries before or within 60 days after the end of the Restricted Period, or (iii) the Company and/or any of its Subsidiaries gives notice to you that your association with them in all capacities (whether as a director, officer, employee or consultant) is being terminated as of a date prior to or within 30 days after the end of the Restricted Period.

6.Non-Transferability. Prior to expiration of the Restricted Period, you may not sell, assign, transfer, pledge or otherwise encumber any of your rights under the Award, including the Restricted Stock and the LTI Cash Right.

7.Disclaimer of Employment Contract. Nothing contained in this Agreement shall be construed as an obligation of the Company or any of its Subsidiaries or any other person to retain you in its employ.

8.Adjustments for Changes in Capitalization of the Company. In the

event of any change in the outstanding shares of Common Stock during the Restricted Period 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 Company or in the shares of Common Stock, the number and class of the shares of your Restricted Stock covered by your Award shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any shares of Common Stock or other securities distributed during the Restricted Period in respect of your Restricted Stock as a result of any of the foregoing to which you may be determined by the Committee to be entitled shall be held without interest by the Transfer Agent for your account until the expiration of the Restricted Period, and shall be subject to the forfeiture and other provisions of this Agreement to the same extent and in the same manner as the previously issued shares of Restricted Stock in respect of which they were distributed.

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9.Securities Laws. The Company's obligation to issue to you, or to deliver to you any stock certificates evidencing, shares of Common Stock hereunder shall, if the Committee so requests, be conditioned upon the Company's receipt of a representation by you as to your investment intention, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of the Securities Act of 1933, as amended, or any other federal, state or local securities legislation. The Company shall not be required to deliver any certificates for shares under this Agreement or to issue any shares hereunder prior to (i) the admission of such shares to listing on any stock exchange on which the shares of Common Stock may then be listed, and (ii) the completion of such registration or other qualification of such shares under any state or federal law, rule or regulation, as the Committee shall determine to be necessary or advisable.

10.Tax and Other Withholding Obligations. The Company’s obligation to pay or deliver to you the Restricted Stock and the cash payments (or credit) that together constitute the Award shall be subject to the Company’s compliance with applicable tax withholding and other required withholding or deductions, if any, with respect to the compensation realized by you as a result of having received the Award (including the non-cash compensation income that you may be deemed to realize for income tax purposes upon the lapsing of the restrictions upon the Award) including any deductions that may be required under the Company's employee benefit plans (collectively, the “Withholding”). The Company intends to satisfy its Withholding with respect to the Award by charging the aggregate amount of the Withholding against the cash credit portion of your Award. In the event that the cash credit portion of the Award is greater than the aggregate amount of the Withholding, the Company shall, as soon as practicable following the Vesting Date, pay to you the excess amount, without interest. In the event that the cash credit portion of the Award is less than the aggregate amount of the Withholding, then the Company shall have the right to adjust subsequent withholdings, and to withhold from other forms of compensation, in order to cover the deficiency.

11.Agreement. By signing this Agreement below as the Participant, you acknowledge that you have received a copy of the Plan, and that you are familiar with the terms and provisions of the Plan and the Agreement, and that you accept their terms. You also acknowledge your agreement (on behalf of yourself and your estate, including your personal representatives, guardians, executors and heirs) to accept as binding, conclusive, and final all decisions and interpretations of the Company’s Board of Directors or of the Committee upon any question arising under the Plan or this Agreement.

	GERMAN AMERICAN BANCORP
___________________________________	By:________________________
Participant

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