Exhibit 10.10
First Financial Corporation
2011 Short-Term Incentive Compensation Plan
(Effective as of January 1, 2011)
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Krieg DeVault LLP
One Indiana Square, Suite 2800
Indianapolis, IN 46204-2079

 

 

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TABLE OF CONTENTS

         
ARTICLE I Introduction
    1  
 
       
1.1 Objective
    1  
1.2 Administration of the Plan
    1  
1.3 Definitions
    1  
 
       
ARTICLE II Eligibility and Participation
    3  
 
       
ARTICLE III Awards
    3  
 
       
3.1 Annual Determination of Awards
    3  
3.2 Communication of Awards
    3  
3.3 Considerations in Establishing Performance Goals
    3  
3.4 Components of Calculation
    4  
3.5 Earning of Awards
    4  
3.6 Time and Form of Payment of Earned Awards
    4  
3.7 Clawback of Awards
    4  
3.8 Withholding of Taxes
    4  
 
       
ARTICLE IV Miscellaneous
    4  
 
       
4.1 Amendment or Termination
    4  
4.2 Employment Rights
    4  
4.3 Evidence
    5  
4.4 Gender and Number
    5  
4.5 Action by the Board or Committee
    5  
4.6 Controlling Laws
    5  
4.7 Mistake of Fact
    5  
4.8 Severability
    5  
4.9 Effect of Headings
    5  
4.10 Nontransferability
    5  
4.11 No Liability
    6  
4.12 Funding
    6  

 

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FIRST FINANCIAL CORPORATION
2011 SHORT-TERM INCENTIVE COMPENSATION PLAN
(Effective January 1, 2011)

ARTICLE I
Introduction
1.1 Objective. The First Financial Corporation 2011 Short-Term Incentive
Compensation Plan is designed to focus the efforts of key employees of the
Company and its Subsidiaries on continued improvement in the profitability of
the Company and its Subsidiaries with the objective of providing an adequate
return to shareholders on their investment in the Company while at the same time
assuring that Awards under the Plan, in combination with the Company’s other
compensation programs: (a) provide Participants incentives that appropriately
balance risk and reward; (b) are compatible with effective controls and
risk-management; and (c) are supported by strong oversight of the Board as
delegated to the Committee.
1.2 Administration of the Plan. The Plan will be administered by the Committee.
The Committee will also (a) adopt such rules and regulations as are appropriate
for the proper administration of the Plan in a manner that provides active and
effective oversight of the Plan, and (b) make such determinations and take such
actions in connection with the Plan as it deems necessary provided that the
Committee may take action only upon the vote of a majority of its members. While
the Committee may appoint individuals to act on its behalf in the administration
of the Plan, it will have the sole, final and conclusive authority to
administer, construe and interpret the Plan. The Committee’s determinations and
interpretations will be final and binding on all persons, including the Company,
its shareholders and persons having any interest in Awards. Any notice or
document required to be given to or filed with the Committee will be properly
given or filed if delivered or mailed, by certified mail, postage prepaid, to
the Compensation Committee, First Financial Corporation Board of Directors, at
P.O. Box 540, Terre Haute, Indiana, 47808.
1.3 Definitions. Whenever the initial letter of the following words or phrases
is capitalized in the Plan, including any Supplements, they will have the
respective meanings set forth below unless otherwise defined herein:

  (a)  
“Award” means the cash compensation awarded to a Participant pursuant to the
Plan.

  (b)  
“Award Rate” means the amount of cash, expressed as a percentage of a
Participant’s Base Salary as determined by the Committee.

  (c)  
“Base Salary” means the regular base salary paid by the Company or a Subsidiary
to an employee while such employee is a Participant during a calendar year,
exclusive of additional forms of compensation such as bonuses, other incentive
payments, automobile allowances, tax gross-ups and other fringe benefits. Base
Salary will include any salary deferral contributions made pursuant to Code
Sections 401(k) and 125.

 

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  (d)  
“Board” means the Board of Directors of the Company.
    (e)  
“Code” means the Internal Revenue Code of 1986, as amended.

  (f)  
“Company” means, unless otherwise stated, First Financial Corporation, organized
and existing under the laws of the State of Indiana, or any successor (by
merger, consolidation, purchase or otherwise) to such corporation which assumes
the obligations of such corporation under the Plan and the Subsidiaries of the
Company.
    (g)  
“Committee” means the Compensation Committee of the Board.

  (h)  
“Effective Date” means January 1, 2011, which is the effective date of the Plan.

  (i)  
“Notice of Award” means the notice provided to a Participant which outlines the
Award Rate, Performance Goals and other terms and conditions of their Award.

  (j)  
“Participant” means an individual who is employed by the Company and who is
designated as a Participant by the Committee. The Committee may designate one or
more tiers of participation under the Plan given an individual’s position with
the Company or a Subsidiary.

  (k)  
“Performance Goals” means the financial performance levels with respect to the
Company and/or the Subsidiaries which must be met during a Performance Period
before an Award may be earned as set forth in a Notice of Award. The Performance
Goals will be determined on an annual basis by the Committee utilizing the
United States Treasury Department final “Guidance on Sound Incentive
Compensation Policies” and any subsequent guidance hereafter provided by
applicable statute, rule or regulation.

  (l)  
“Performance Period” means the period of time specified by the Committee during
which an Award may be earned.

  (m)  
“Permanent and Total Disability” means a disability as determined under a
long-term disability insurance policy sponsored by the Company or a Subsidiary.

  (n)  
“Plan” means the short-term incentive compensation plan contained in this
instrument and any subsequent amendment to this instrument, which shall have
been adopted by the Board or Committee known as the First Financial Corporation
2011 Short-Term Incentive Compensation Plan.

  (o)  
“Retirement” means a Participant’s Termination of Service on or after attaining
age 65 for reasons other than death or Permanent and Total Disability.

  (p)  
“Subsidiary” means First Financial Bank and such other subsidiary corporations
of the Company which are designated by the Board or Committee as eligible to
participate in the Plan.

 

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  (q)  
“Termination of Service” means the occurrence of any act or event or any failure
to act, whether pursuant to an employment agreement or otherwise, that actually
or effectively causes or results in a Participant ceasing, for whatever reason,
to be an employee of the Company or a Subsidiary, including, but not limited to,
death, Permanent and Total Disability, Retirement, termination by the Company or
a Subsidiary of the Participant’s employment with the Company or a Subsidiary
and voluntary resignation or termination by the Participant of his or her
employment with the Company or a Subsidiary.

ARTICLE II
Eligibility and Participation
Participation in the Plan is limited to those individuals who have been
designated as Participants by resolution of the Committee. A Participant will
become covered by the Plan effective as of the date on which the individual is
designated a Participant by resolution of the Committee.
ARTICLE III
Awards
3.1 Annual Determination of Awards. The Committee shall determine on an annual
basis (a) whether or not to make Awards, and (b) the terms and conditions of an
Award. The Committee may take into account such factors as it determines in its
discretion in determining the terms and conditions of an Award and the Award
Rate. These factors may include, but are not limited to, the nature of the
services rendered by the Participant, his or her current and potential
contributions to the success of the Company, the Participant’s Base Salary, and
such other factors as the Committee, in its sole discretion, considers relevant.
3.2 Communication of Awards. The Committee will communicate in writing to
Participants in a Notice of Award the Award Rates, Performance Period,
Performance Goals (and their respective weightings) and any requirements or
other criteria with respect to an Award.
3.3 Considerations in Establishing Performance Goals. In determining appropriate
Performance Goals for each calendar year and the relative weight accorded each
Performance Goal, the Committee must:

  (a)  
Balance risk and financial results in a manner that does not encourage
Participants to expose the Company and its Subsidiaries to imprudent risks;

  (b)  
Make such determination in a manner designed to ensure that Participant’ overall
compensation is balanced and that the Awards are consistent with the policies
and procedures of the Company and its Subsidiaries regarding such compensation
arrangements; and

  (c)  
Monitor the success of the Performance Goals and weighting established in prior
years, alone and in combination with other incentive compensation awarded to the
same Participants, and make appropriate adjustments in future calendar years as
needed so that payments appropriately incentivize Participants and appropriately
reflect risk.

 

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3.4 Components of Calculation. For each Performance Period, the Committee, in
its sole discretion, will establish the following business criteria for
calculating Awards to Participants with respect to the Company and the
Subsidiaries:

  (a)  
The Performance Goals;

  (b)  
The relative weight accorded each Performance Goal; and

  (c)  
The threshold, target and maximum Award Rates for each Participant. The
calculation of Awards will be made by interpolating within the interval between
the threshold Award Rate and the target Award Rate and between the target Award
Rate and the maximum Award Rate, and rounding to the nearest dollar.

3.5 Earning of Awards. An Award will be treated as earned to the extent (a) the
threshold, target or maximum Performance Goals are met; and (b) the Participant
is employed on the last day of the Performance Period.
3.6 Time and Form of Payment of Earned Awards. Earned Awards will be paid in a
single sum in cash within 75 days after the end of the Performance Period. If a
Participant incurs a Termination of Service before the date payment is made,
unless the Termination of Service is due to death, Permanent and Total
Disability or Retirement, he will forfeit his Award.
3.7 Clawback of Awards. In the event the Company is required to prepare an
accounting restatement due to the Company’s material noncompliance with any
financial reporting requirement under securities laws, and the Company paid an
Award to a Participant which was based on the erroneous data within three years
preceding the date of the accounting restatement, then the Participant is
required to repay the Company the excess amount which should not have been paid
to the Participant under the accounting restatement.
3.8 Withholding of Taxes. Each Participant will be solely responsible for, and
the Company will withhold from any amounts payable under the Plan, all
applicable federal, state, city and local income taxes and the Participant’s
share of applicable employment taxes.
ARTICLE IV
Miscellaneous
4.1 Amendment or Termination. The Board or the Committee may, at any time,
alter, amend, modify, suspend or terminate the Plan, but may not, except as
provided in Section 3.7, without the consent of a Participant to whom an Award
has been made, make any alteration which would adversely affect an Award
previously granted under the Plan.
4.2 Employment Rights. The Plan does not constitute a contract of employment,
and participation in the Plan will not give a Participant the right to be
rehired or retained in the employ of the Company or any Subsidiary, nor will
participation in the Plan give any Participant any right or claim to any benefit
under the Plan, unless such right or claim exists under the terms of the Plan.

 

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4.3 Evidence. Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information which the person relying thereon
considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
4.4 Gender and Number. Where the context permits, words in the masculine gender
will include the feminine gender, the plural will include the singular and the
singular will include the plural.
4.5 Action by the Board or Committee. Any action required of or permitted by the
Board or Committee under this Plan will be by resolution of the Board, the
Committee or by a person or persons authorized by resolution of the Board or
Committee.
4.6 Controlling Laws. Except to the extent superseded by laws of the United
States, the laws of Indiana will be controlling in all matters relating to the
Plan. The Plan and all Awards are intended to be exempt from the applicable
provision of Code Section 409A. To the extent Code Section 409A applies, the
Plan and all Awards intend to comply, and will be construed by the Board or
Committee, as the case may be, in a manner which complies with the applicable
provisions of Code Section 409A. To the extent there is any conflict between a
provision of the Plan or a Notice of Award and a provision of Code Section 409A,
the applicable provision of Code Section 409A will control.
4.7 Mistake of Fact. Any mistake of fact or misstatement of fact will be
corrected when it becomes known and proper adjustment made by reason thereof.
4.8 Severability. In the event any provision of the Plan is held to be illegal
or invalid for any reason, such illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and endorsed as if
such illegal or invalid provision had never been contained in the Plan.
4.9 Effect of Headings. The descriptive headings of the Articles and Sections of
the Plan are inserted for convenience of reference and identification only and
do not constitute a part of the Plan for purposes of interpretation.
4.10 Nontransferability. No Award or Award payment will be transferable, except
by the Participant’s will or the applicable laws of descent and distribution.
During the Participant’s lifetime, his Award will be payable only to the
Participant or his guardian or attorney-in-fact. The payment and any rights and
privileges pertaining thereto may not be transferred, assigned, pledged or
hypothecated by him in any way, whether by operation of law or otherwise and
will not be subject to execution, attachment or similar process.

 

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4.11 No Liability. No member of the Board or the Committee or any officer or
Participant of the Company or Subsidiary will be personally liable for any
action, omission or determination made in good faith in connection with the
Plan. The Company will indemnify and hold harmless the members of the Committee,
the Board and the officers and Participants of the Company and its Subsidiaries,
and each of them, from and against any and all loss which results from liability
to which any of them may be subjected by reason of any act or conduct (except
willful misconduct or gross negligence) in their official capacities in
connection with the administration of the Plan, including all expenses
reasonably incurred in their defense, in case the Company fails to provide such
defense. By participating in the Plan, each Participant agrees to release and
hold harmless each of the Company, the Subsidiaries (and their respective
directors, officers and employees), the Board and the Committee, from and
against any tax or other liability, including without limitation, interest and
penalties, incurred by the Participant in connection with his participation in
the Plan.
4.12 Funding. All amounts payable under the Plan will be paid by the Company
from its general assets. The Company is not required to segregate on its books
or otherwise establish any funding procedure for any amount to be used for the
payment of benefits under the Plan. The Company may, however, in its sole
discretion, set funds aside in investments to meet its anticipated obligations
under the Plan. Any such action or set-aside amount may not be deemed to create
a trust of any kind between the Company and any Participant or beneficiary or to
constitute the funding of any Plan benefits. Consequently, any person entitled
to a payment under the Plan will have no rights against the assets of the
Company greater than the rights of any other unsecured creditor of the Company.

 

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