Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (the “Agreement”) is effective as
of January 12, 2013, by and between FIRST HARRISON BANK (the “Bank”), a
federally chartered financial institution, with its principal offices at 220
Federal Drive NW, Corydon, IN 47112, FIRST CAPITAL, INC. (the “Company”), an
Indiana corporation and the holding company of the Bank, and WILLIAM W. HARROD
(“Executive”).

WHEREAS, Executive serves in a position of substantial responsibility pursuant
to an employment agreement with the Bank and the Company dated January 12, 2000
and amended on January 18, 2008; and

WHEREAS, the Bank and the Company desire to continue to assure the services of
Executive for the period provided for in this Agreement; and

WHEREAS, Executive desires to continue to remain employed by the Bank and the
Company during the term of this Agreement; and

WHEREAS, the parties wish to amend and restate this Agreement to incorporate
prior amendments and clarify the terms and conditions of Executive’s employment
hereunder.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
upon the terms and conditions provided in this Agreement, the parties hereby
agree as follows:

 

1. Position and Responsibilities.

(a) During the period of Executive’s employment under this Agreement, Executive
agrees to serve as President and Chief Executive Officer of the Bank and the
Company. Executive shall perform all duties and shall have all powers which are
commonly incident to the offices of the President and Chief Executive Officer,
which consistent with the office, are delegated to him by the Board of Directors
of the Bank or the Company (collectively referred to herein unless otherwise
stated as the “Board of Directors”).

(b) During the period of Executive’s employment under this Agreement, except for
periods of absence occasioned by illness, vacation, and reasonable leaves of
absence, Executive shall devote substantially all of his business time,
attention, skill and efforts to the faithful performance of his duties under
this Agreement, including activities and services related to the organization,
operation and management of the Company and its affiliates, as well as
participation in community, professional and civic organizations; provided,
however, that, with the approval of the Board of Directors, as evidenced by a
resolution of the Board of Directors, from time to time, Executive may serve, or
continue to serve, on the boards of directors of, and hold any other offices or
positions in, companies or organizations, which, in the judgment of the Board of
Directors, will not present any conflict of interest with the Company or its
affiliates, or materially affect the performance of Executive’s duties pursuant
to this Agreement.

(c) The Bank will furnish Executive with the working facilities and staff
customary for executive officers with the title and duties set forth in this
Agreement and as are necessary for him to perform his duties. The location of
such facilities and staff shall be at the principal administrative offices of
the Bank.

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2. Term of Employment.

(a) The term of this Agreement shall be (i) the initial term, consisting of the
period commencing on the date of this Agreement (the “Effective Date”), and
ending on January 12, 2015.

 

3. Compensation and Benefits.

(a) Base Salary. The Bank agrees to pay Executive during the term of this
Agreement a base salary at the rate of $170,445 per annum, payable in accordance
with the Bank’s customary payroll practices. However, payments made pursuant to
this Section 3 shall be allocated between the Bank and the Company in proportion
to the services rendered and the time expended on such activities by Executive
as determined by the Bank and the Company. The Board of Directors shall review
at least annually the rate of Executive’s base salary based upon factors it
deems relevant, and may maintain or increase his base salary, provided that no
such action shall reduce the rate of base salary below the rate in effect on the
Effective Date. In the absence of action by the Board of Directors, Executive
shall continue to receive a base salary at the per annum rate specified on the
Effective Date or, if another rate has been established under the provisions of
this Section 3, the rate last properly established by action of the Board of
Directors.

(b) Incentive Compensation. Executive shall be eligible to participate in
discretionary bonuses or other incentive compensation programs that the Board of
Directors may award from time to time to senior management employees pursuant to
bonus plans or otherwise.

(c) Reimbursement of business expenses. Executive shall be entitled to
reimbursement for all reasonable business expenses (including mileage at the
prevailing rate established by the Internal Revenue Service) incurred while
performing his obligations under this Agreement, including but not limited to
all reasonable business travel and entertainment expenses incurred while acting
at the request of or in the service of the Bank or the Company and reasonable
expenses for attendance at annual and other periodic meetings of trade
associations. Expenses will be reimbursed if they are submitted in accordance
with the Bank’s policies and procedures.

(d) Vacation and Holidays. Executive shall take vacation at a time mutually
agreed upon by the Bank, the Company and Executive. Executive shall receive his
base salary and other benefits during periods of vacation. Executive shall also
be entitled to paid legal holidays in accordance with the policies of the Bank.

(e) Other Employee Benefits. In addition to any other compensation or benefits
provided for under this Agreement, Executive shall be entitled to continue to
participate in any employee benefit plans, arrangements and perquisites of the
Bank and the Company in which he participated or was eligible to participate as
of the Effective Date. Executive shall also be entitled to participate in any
employee benefits or perquisites the Bank or the Company offers to full-time
employees or executive management in the future. Unless otherwise provided
herein, nothing paid to Executive under any compensation or benefit plan shall
be deemed to be in lieu of other compensation Executive is entitled to under
this Agreement.

 

4. Payments to Executive Upon an Event of Termination.

(a) Upon the occurrence of an Event of Termination (as herein defined), the
provisions of this Section 4 shall apply. As used in this Agreement, an “Event
of Termination” shall mean and include

 

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any one or more of the following: (i) the termination by the Bank or the Company
of Executive’s full-time employment for any reason other than a termination
governed by Sections 5 or 7 of this Agreement; or (ii) Executive’s resignation
from the Bank and the Company, upon any event constituting “Good Reason.” For
purposes of this Agreement, “Good Reason” shall mean the occurrence of any of
the following events without Executive’s consent:

(i) The assignment to Executive of duties that constitute a material diminution
of his authority, duties, or responsibilities;

(ii) A material diminution in Executive’s base salary;

(iii) Relocation of Executive’s principal place of employment by more than 35
miles from its location as of the Effective Date; or

(iv) Any other action or inaction by the Bank or the Company that constitutes a
material breach of this Agreement;

provided, that within ninety (90) days after the initial existence of such
event, the Bank or the Company shall be given notice and an opportunity, not
less than thirty (30) days, to effectuate a cure for such asserted “Good Reason”
by Executive. Executive’s resignation hereunder for Good Reason shall not occur
later than one hundred fifty (150) days following the initial date on which the
event Executive claims constitutes Good Reason occurred.

(b) Upon Executive’s termination of employment in accordance with paragraph
(a) of this Section 4, as of the Date of Termination, as defined in this
Agreement, the Bank or the Company shall be obligated to pay Executive, or, in
the event of his death following the Date of Termination, his beneficiary or
beneficiaries, or his estate, as the case may be, an amount equal to the sum of:
(i) the base salary and incentive compensation that would have been paid to
Executive for the remaining term of this Agreement had the Event of Termination
not occurred (based on Executive’s then current base salary and most recently
paid or accrued bonus (incentive compensation) at the time of the Event of
Termination), plus (ii) the value, as calculated by a recognized firm
customarily performing such valuation, of any stock options which, as of the
Date of Termination, have been granted to Executive but are not exercisable by
Executive and the value of any restricted stock awards which have been granted
to Executive, but in which Executive does not have a non-forfeitable or
fully-vested interest as of the Date of Termination, plus (iii) the value of all
employee benefits that would have been provided to Executive for the remaining
term of this Agreement had the Event of Termination not occurred, based on the
most recent level of contribution, accrual or other participation by or on
behalf of Executive. All payments made under this Section 4(b) shall be paid in
substantially equal monthly installments over the remaining term of this
Agreement following the Date of Termination; provided, however, that if the
remaining term of the Agreement is less than one (1) year (determined as of the
Date of Termination) such payments and benefits shall be paid in a lump sum to
Executive (or his estate) within thirty (30) days of the Date of Termination.

(c) In addition to the payments provided for in paragraph (b) of this Section 4,
upon Executive’s separation from service in accordance with the provisions of
paragraph (a) of this Section 4, to the extent that the Company or the Bank
continues to offer any life, medical, health, disability or dental insurance
plan or arrangement in which Executive or his dependents participates as of the
date of the Event of Termination (each being a “Welfare Plan”), Executive and
his covered dependents shall continue participating in such Welfare Plans,
subject to the same premium contributions on the part of Executive as

 

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were required immediately prior to the Event of Termination until the earlier of
(i) his death; (ii) his employment by another employer other than one of which
he is the majority owner; or (iii) the end of the remaining term of this
Agreement. If the Company or the Bank does not offer the Welfare Plans at any
time after the Event of Termination, then the Company or the Bank shall provide
Executive with a payment equal to the premiums for such benefits for the period
which runs until the earlier of (i) his death; (ii) his employment by another
employer other than one of which he is the majority owner; or (iii) the end of
the remaining term of this Agreement.

(d) Payments and benefits provided to Executive under this Section 4 are subject
to Executive’s compliance with Section 10 of this Agreement.

 

5. Change in Control.

(a) Change in Control Defined. A “Change in Control” of the Company or the Bank
shall be deemed to occur if and when (a) there occurs a change in control of the
Bank or the Company within the meaning of the Home Owners Loan Act of 1933 and
12 C.F.R. Part 238, (b) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company or the Bank representing twenty-five
percent (25%) or more of the combined voting power of the Company’s then
outstanding securities, (c) the membership of the board of directors of the
Company or the Bank changes as the result of a contested election, such that
individuals who were directors at the beginning of any twenty-four (24) month
period (whether commencing before or after the date of adoption of this
Agreement) do not constitute a majority of the Board of Directors at the end of
such period, or (d) shareholders of the Company approve a merger, consolidation,
sale or disposition of all or substantially all of the Company assets, or a plan
of partial or complete liquidation.

(b) If a Change in Control, Executive shall be entitled to the benefits provided
in paragraphs (c) and (d) of this Section 5 upon his subsequent involuntary
termination following the effective date of a Change in Control (or voluntary
termination within twelve (12) months of the effective date of a Change in
Control for Good Reason (as defined in Section 4 of this Agreement), unless such
termination is because of his death, retirement as provided in Section 7,
Termination for Cause, or termination for Disability.

(c) Upon the occurrence of a Change in Control followed by Executive’s
termination of employment as noted in paragraph (b) above, the Company or its
successor shall pay Executive, or in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, a sum equal to 2.99 times Executive’s “base
amount,” within the meaning of §280G(b)(3) of the Internal Revenue Code of 1986
(“Code”), as amended. Such payment shall be made in a lump sum paid within ten
(10) days of Executive’s Date of Termination.

(d) Upon the occurrence of a Change in Control followed by Executive’s
termination of employment as noted in paragraph (b) above, the Company or its
successor will cause to be continued life, medical, dental and disability
coverage substantially identical to the coverage maintained for Executive prior
to his severance. Such coverage shall cease upon the expiration of thirty-six
(36) months. In addition, Executive shall be entitled to receive the value of
employer contributions that would have been made on Executive’s behalf over the
remaining term of the agreement to any tax-qualified retirement plan sponsored
by the Bank or the Company as of the Date of Termination.

 

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6. Change in Control Related Provisions.

Notwithstanding anything to the contrary in this Agreement, in the event that
the aggregate payments or benefits to be made or afforded to Executive under
Section 5 of this Agreement, together with any other payments or benefits
received or to be received by Executive in connection with a Change in Control,
would be deemed to include an “excess parachute payment” under §280G of the
Code, then, at the election of Executive, (i) such payments or benefits shall be
payable or provided to Executive over the minimum period necessary to reduce the
present value of such payments or benefits to an amount which is one dollar
($1.00) less than three (3) times Executive’s “base amount” under §280G(b)(3) of
the Code or (ii) the payments or benefits to be provided under this Section 5
shall be reduced to the extent necessary to avoid treatment as an excess
parachute payment with the allocation of the reduction among such payments and
benefits to be determined by Executive.

 

7. Termination for Cause.

For purposes of this Agreement, “Termination for Cause” shall include
termination because of Executive’s personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule, or
regulation (other than traffic violations or similar infractions) or final
cease-and-desist order, or material breach of any provision of this Agreement.
Notwithstanding the foregoing, Executive shall not be deemed to have been
terminated for Cause pursuant to this Section 7 unless and until there shall
have been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than three-fourths (3/4) of the members of the
Board at a meeting of the Board called and held for that purpose (after
reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying termination for Cause
and specifying the reasons thereof. Executive shall not have the right to
receive compensation or other benefits for any period after Termination for
Cause. Any stock options granted to Executive under any stock option plan or any
unvested awards granted under any other stock benefit plan of the Bank, the
Company, or any subsidiary or affiliate thereof, shall become null and void
effective upon Executive’s receipt of Notice of Termination for Cause pursuant
to Section 8 hereof, and shall not be exercisable by Executive at any time
subsequent to such Termination for Cause.

 

8. Notice.

(a) Any purported termination by the Bank, the Company or by Executive shall be
communicated by Notice of Termination to the other party hereto. For purposes of
this Agreement, a “Notice of Termination” shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision so
indicated.

(b) “Date of Termination” shall mean the date specified in the Notice of
Termination.

 

9. Non-Competition and Non-Disclosure.

(a) Upon any termination of Executive’s employment pursuant to Section 4 of this
Agreement, Executive agrees not to compete with the Company or its affiliates
for a period of one (1) year following such termination in any city, town or
county in which Executive’s normal business office is located and the Bank or
any of its affiliates has an office or has filed an application for regulatory

 

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approval to establish an office, determined as of the effective date of such
termination, except as agreed to pursuant to a resolution duly adopted by the
Board of Directors. Executive agrees that during such period and within said
cities, towns and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose business
materially competes with the depository, lending or other business activities of
the Bank or its affiliates. The parties hereto, recognizing that irreparable
injury will result to the Bank or its affiliates, its business and property in
the event of Executive’s breach of this Subsection 9(a), agree that in the event
of any such breach by Executive, the Bank or its affiliates will be entitled, in
addition to any other remedies and damages available, to an injunction to
restrain the violation hereof by Executive, Executive’s partners, agents,
servants, employees and all persons acting for or under the direction of
Executive. Executive represents and admits that in the event of the termination
of his employment pursuant to Section 4 of this Agreement, Executive’s
experience and capabilities are such that Executive can obtain employment in a
business engaged in other lines and/or of a different nature than the Bank or
its affiliates, and that the enforcement of a remedy by way of injunction will
not prevent Executive from earning a livelihood. Nothing herein will be
construed as prohibiting the Company or its affiliates from pursuing any other
remedies available to the Company or its affiliates for such breach or
threatened breach, including the recovery of damages from Executive.

(b) Executive recognizes and acknowledges that his knowledge of the business
activities and plans for business activities of the Company and its affiliates,
as it may exist from time to time, is a valuable, special and unique asset of
the business of the Bank and its affiliates. Executive will not, during or after
the term of his employment, disclose any knowledge of the past, present, planned
or considered business activities of the Bank and its affiliates thereof to any
person, firm, corporation or other entity for any reason or purpose whatsoever
unless expressly authorized by the Board of Directors or required by law.
Notwithstanding the foregoing, Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Bank or its
affiliates. In the event of a breach or threatened breach by Executive of the
provisions of this Section 9(b), the Bank will be entitled to an injunction
restraining Executive from disclosing, in whole or in part, knowledge of the
past, present, planned or considered business activities of the Bank or its
affiliates or from rendering any services to any person, firm, corporation or
other entity to whom such knowledge, in whole or in part, has been disclosed or
is threatened to be disclosed. Nothing herein will be construed as prohibiting
the Bank from pursuing any other remedies available to the Bank for such breach
or threatened breach, including the recovery of damages from Executive.

 

10. Death, Disability, Retirement and Voluntary Termination without Good Reason.

(a) Death. Notwithstanding any other provision of this Agreement to the
contrary, in the event of Executive’s death during the term of this Agreement,
the Bank shall immediately pay his estate any salary and bonus accrued but
unpaid as of the date of his death. This provision shall not negate any rights
Executive or his beneficiaries may have to death benefits under any employee
benefit plan of the Bank or the Company.

(b) Disability.

(i) If Executive shall become disabled as defined in the Bank’s then current
disability plan (or, if no such plan is then in effect, if Executive is
permanently and totally disabled within the meaning of Section 22(e)(3) of the
Code as determined by a physician designated by the Board of Directors) the Bank
or the Company may terminate Executive’s employment for “Disability.”

(ii) Upon Executive’s termination of employment for Disability the Bank will pay
Executive, as disability pay, a bi-weekly payment equal to three-quarters
(3/4) of Executive’s semi-monthly rate of base salary on the effective date of
such termination. These disability payments shall commence on the effective date
of Executive’s termination and will end on the earlier of (i) the date Executive
returns to the full-time employment of the Bank and the Company in the same
capacity as he was employed prior to his termination for Disability and pursuant
to an employment agreement between Executive, the Company and the Bank;
(ii) Executive’s full-time employment by another employer; (iii) Executive
attaining the age of sixty-five (65); (iv) Executive’s death; or (v) the
expiration of the term of this Agreement. The disability pay shall be reduced by
the amount, if any, paid to Executive under any plan of the Bank providing
disability benefits to Executive.

 

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(c) Retirement. Upon Executive’s termination of employment on or after age
sixty-five (65) he shall be entitled to all benefits under any retirement plan
maintained by the Bank or the Company.

(d) Voluntary Termination without Good Reason. Upon Executive’s voluntary
termination of employment during the term of this Agreement (other than for Good
Reason), the Company or the Bank shall pay Executive his base salary and accrued
bonus through his Date of Termination.

 

11. Source of Payments.

All payments provided for in this Agreement shall be timely paid in cash or
check from the general funds of the Bank. The Company, however, unconditionally
guarantees payment and provision of all amounts and benefits due hereunder to
Executive and, if such amounts and benefits due from the Bank are not timely
paid or provided by the Bank, such amounts and benefits shall be paid or
provided by the Company.

 

12. Effect of Prior Agreements and Existing Benefit Plans.

This Agreement contains the entire understanding between the parties hereto and
supersedes any prior employment agreement between the Bank, the Company or any
predecessor of the Bank and the Company, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Executive of
a kind elsewhere provided. No provision of this Agreement shall be interpreted
to mean that Executive is subject to receiving fewer benefits than those
available to him without reference to this Agreement.

 

13. No Attachment.

(a) Except as required by law, no right to receive payments under this Agreement
shall be subject to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge or hypothecation, or to execution, attachment, levy
or similar process or assignment by operation of law, and any attempt, voluntary
or involuntary, to affect any such action shall be null, void and of no effect.

(b) This Agreement shall be binding upon, and inure to the benefit of,
Executive, the Bank, the Company and their respective successors and assigns.

 

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14. Modification and Waiver.

(a) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.

(b) No term or condition of this Agreement shall be deemed to have been waived,
nor shall there be any estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future as to any act other than that specifically waived.

 

15. Severability.

If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any remaining part of such provision not held so invalid,
and each such other provision and part thereof shall to the full extent
consistent with law continue in full force and effect.

 

16. Headings for Reference Only.

The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

 

17. Governing Law.

Except to the extent preempted by federal law, the validity, interpretation,
performance, and enforcement of this Agreement shall be governed by the laws of
the State of Indiana, without regard to principles of conflicts of law of
Indiana.

 

18. Arbitration.

Any dispute or controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a panel of three
(3) arbitrators sitting in a location selected by Executive within fifty
(50) miles from the location of the Bank, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.

In the event any dispute or controversy arising under or in connection with
Executive’s termination is resolved in favor of Executive, whether by judgment,
arbitration or settlement, Executive shall be entitled to the payment of all
back-pay, including salary, bonuses and any other cash compensation, fringe
benefits and any compensation and benefits due Executive under this Agreement.

 

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19. Payment of Legal Fees.

All reasonable legal fees paid or incurred by Executive pursuant to any dispute
or question of interpretation relating to this Agreement shall be paid or
reimbursed by the Bank or the Company only if Executive is successful pursuant
to a legal judgment, arbitration or settlement.

 

20. Indemnification.

The Bank shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors’ and officers’
liability insurance policy at its expense and shall indemnify Executive (and his
heirs, executors and administrators) to the fullest extent permitted under
applicable law against all expenses and liabilities reasonably incurred by him
in connection with or arising out of any action, suit or proceeding in which he
may be involved by reason of him having been a director or officer of the Bank
or the Company (whether or not he continues to be a director or officer at the
time of incurring such expenses or liabilities), such expenses and liabilities
to include, but not be limited to, judgments, court costs and attorneys’ fees
and the costs of reasonable settlements.

 

21. Successors to the Bank and the Company.

The Bank and the Company shall require any successor or assignee, whether direct
or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all of the business or assets of the Bank or the Company,
expressly and unconditionally to assume and agree to perform the Bank’s and the
Company’s obligations under this Agreement, in the same manner and to the same
extent that the Bank and the Company would be required to perform if no such
succession or assignment had taken place.

 

22. Required Provisions.

In the event any of the provisions of this Section 22 are in conflict with the
other terms of this Agreement, this Section 22 shall prevail.

(a) The Board of Directors may terminate Executive’s employment at any time, but
any termination, other than a Termination for Cause, shall not prejudice
Executive’s right to compensation or other benefits under this Agreement.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 7 of this
Agreement.

(b) If Executive is suspended from office and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
§1818(e)(3) or (g)(1); the Bank’s obligations under this contract shall be
suspended as of the date of service, unless stayed by appropriate proceedings.
If the charges in the notice are dismissed, the Bank may in its discretion:
(i) pay Executive all or part of the compensation withheld while its contract
obligations were suspended; and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.

(c) If Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1),
all obligations of the Bank under this contract shall terminate as of the
effective date of the order, but vested rights of the contracting parties shall
not be affected.

 

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(d) If the Bank is in default as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act, 12 U.S.C. §1813(x)(1) all obligations of the Bank under
this contract shall terminate as of the date of default, but this paragraph
shall not affect any vested rights of the contracting parties.

(e) All obligations under this contract shall be terminated, except to the
extent a determination is made that continuation of the contract is necessary
for the continued operation of the Bank (i) by the director of the Office of the
Comptroller of the Currency (the “OCC”) or the director’s designee (the
“Director”), at the time the OCC enters into an agreement to provide assistance
to or on behalf of the Bank under the authority contained in Section 13(c) of
the Federal Deposit Insurance Act; or (ii) by the Director, at the time the
Director approves a supervisory merger to resolve problems related to the
operations of the Bank or when the Bank is determined by the Director to be in
an unsafe or unsound condition. Any rights of Executive that have already
vested, however, shall not be affected by such action.

(f) Any payments made to employees pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C. §1828(k) and
FDIC regulation 12 C.F.R. Part 359, Golden Parachute and Indemnification
Payments.

 

23. Section 409A of the Code.

(a) This Agreement is intended to comply with the requirements of Section 409A
of the Code, and specifically, with the “short-term deferral exception” under
Treasury Regulation Section 1.409A-1(b)(4) and the “separation pay exception”
under Treasury Regulation Section 1.409A-1(b)(9)(iii), and shall in all respects
be administered in accordance with Section 409A of the Code. If any payment or
benefit hereunder cannot be provided or made at the time specified herein
without incurring sanctions on Executive under Section 409A of the Code, then
such payment or benefit shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed. For purposes of Section 409A
of the Code, all payments to be made upon a termination of employment under this
Agreement may only be made upon a “separation from service” (within the meaning
of such term under Section 409A of the Code), each payment made under this
Agreement shall be treated as a separate payment, the right to a series of
installment payments under this Agreement (if any) is to be treated as a right
to a series of separate payments, and if a payment is not made by the designated
payment date under this Agreement, the payment shall be made by December 31 of
the calendar year in which the designated date occurs. To the extent that any
payment provided for hereunder would be subject to additional tax under
Section 409A of the Code, or would cause the administration of this Agreement to
fail to satisfy the requirements of Section 409A of the Code, such provision
shall be deemed null and void to the extent permitted by applicable law, and any
such amount shall be payable in accordance with (b) below. In no event shall
Executive, directly or indirectly, designate the calendar year of payment.

(b) If when separation from service occurs Executive is a “specified employee”
within the meaning of Section 409A of the Code, and if the cash severance
payment under Section 4(b) or 5(c), (e) would be considered deferred
compensation under Section 409A of the Code, and, finally, if an exemption from
the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not
available (i.e., the “short-term deferral exception” under Treasury Regulations
Section 1.409A-1(b)(4) or the “separation pay exception” under Treasury
Section 1.409A-1(b)(9)(iii)), the Bank will make the maximum severance payment
possible in order to comply with an exception from the six month requirement and
make any remaining severance payment under Section 4(b) or 5(c), (e) to
Executive in a single lump sum without interest on the first payroll date that
occurs after the date that is six (6) months after the date on which Executive
separates from service.

 

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(c) If (x) under the terms of the applicable policy or policies for the
insurance or other benefits specified in Section 4(c) or 5(d) it is not possible
to continue coverage for Executive and her dependents, or (y) when a separation
from service occurs Executive is a “specified employee” within the meaning of
Section 409A of the Code, and if any of the continued insurance coverage or
other benefits specified in Section 4(c) or 5(d) would be considered deferred
compensation under Section 409A of the Code, and, finally, if an exemption from
the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not
available for that particular insurance or other benefit, the Bank shall pay to
Executive in a single lump sum an amount in cash equal to the present value of
the Bank’s projected cost to maintain that particular insurance benefit (and
associated income tax gross-up benefit, if applicable) had Executive’s
employment not terminated, assuming continued coverage for 36 months. The
lump-sum payment shall be made thirty (30) days after employment termination or,
if Section 24(b) applies, on the first payroll date that occurs after the date
that is six (6) months after the date on which Executive separates from service.

(d) References in this Agreement to Section 409A of the Code include rules,
regulations, and guidance of general application issued by the Department of the
Treasury under Internal Revenue Section 409A of the Code.

 

24. Miscellaneous

Executive shall, upon reasonable notice, furnish information and assistance as
may be reasonably required by the Bank or the Company in connection with any
litigation to which the Bank, Company or any affiliates of the Bank or the
Company is, or may become, a party.

 

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SIGNATURES

IN WITNESS WHEREOF, First Harrison Bank and First Capital, Inc. have caused this
Agreement to be executed by their duly authorized officers and directors, and
Executive has signed this Agreement, on March     , 2013.

 

ATTEST:     FIRST HARRISON BANK

 

    By:  

 

      For the Entire Board of Directors ATTEST:     FIRST CAPITAL, INC.

 

    By:  

 

      For the Entire Board of Directors [SEAL]       WITNESS:     EXECUTIVE

 

   

 

 

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