Document:

<PAGE>
                                                                    EXHIBIT 10.1

                         SEVERANCE AGREEMENT AND RELEASE

         THIS SEVERANCE AGREEMENT AND RELEASE (this "AGREEMENT") is made and
entered into by and among EDWARD R. POOLEY ("MR. POOLEY"), ST. JOSEPH CAPITAL
CORPORATION, a Delaware corporation (the "COMPANY"), and ST. JOSEPH CAPITAL BANK
(the "BANK"), an Indiana state bank, and this Agreement is effective as of the
Effective Date (as defined in SECTION 15).

         WHEREAS, Mr. Pooley has been employed by the Company and the Bank; and

         WHEREAS, Mr. Pooley's employment with the Company and the Bank
terminated by mutual agreement; and

         WHEREAS, the parties are desirous of effecting an amicable separation,
and to effect such desire, the Company offers Mr. Pooley a severance amount if
Mr. Pooley agrees to settle, compromise and dispose of any and all claims and
issues of any kind and nature that Mr. Pooley has, or may have, or may claim to
have against the Company and the Bank, including, but not limited to, any claims
arising out of, or in any way related to, Mr. Pooley's employment or Mr.
Pooley's separation from employment with the Company and the Bank; and

         NOW, THEREFORE, the parties agree as follows:

         SECTION 1. RESIGNATION FROM EMPLOYMENT AND OFFICER POSITIONS. Mr.
Pooley hereby resigns from his employment with both the Company and the Bank and
from his officer positions with both the Company and the Bank, all such
resignations effective October 9, 2003, and his last date of employment shall be
October 9, 2003.

         SECTION 2. SEVERANCE. In consideration for the promises made in this
Agreement, the Company agrees to pay Mr. Pooley severance pay in the aggregate
sum of one hundred and twenty-six thousand two hundred and ninety-five dollars
($126,295), less applicable withholding taxes, employment taxes, and other
deductions properly chargeable to Mr. Pooley to the extent required by law,
representing salary for a twelve (12) month period and a bonus. The Company
agrees that Mr. Pooley has the option of requesting that all or any portion of
the $126,295.00 shall be paid to Mr. Pooley before December 31, 2003. Any
portion of the severance pay of $126,295.00 that is not paid by December 31,
2003, shall be paid to Mr. Pooley on January 2, 2004. Mr. Pooley expressly
agrees, understands, and acknowledges that the severance pay provided to him
under this SECTION 2 and the rights and benefits conferred in SECTION 5 and
SECTION 6 constitute amounts and rights in excess of that to which a separated
employee of the Company or the Bank would be entitled without entering into this
Agreement and are being provided by the Company as consideration for Mr. Pooley
entering into this Agreement, including, but not limited to, the provisions of
SECTION 10 and SECTION 12 and the release of claims and waiver of rights
provided for in SECTION 11.

         SECTION 3. ACCRUED COMPENSATION AND VACATION PAY. Mr. Pooley will be
provided a final pay check on October 15, 2003, for all salary and vacation pay
earned through his last date of employment in accordance with Company and Bank
policies. No later than October 10,

<PAGE>

2003, Mr. Pooley shall provide to management his accounting of any vacation pay
earned but not taken as of October 9, 2003.

         SECTION 4. COBRA RIGHTS. The Bank shall provide Mr. Pooley with an
opportunity to continue, at Mr. Pooley's expense, health insurance for eighteen
(18) months in accordance with the provisions of COBRA.

         SECTION 5. STOCK OPTIONS. The Company agrees to take all actions
necessary to cause Mr. Pooley's unvested stock options, as set forth below, to
vest and become fully exercisable as of the Effective Date (as defined in
SECTION 15 below). Mr. Pooley agrees and acknowledges that all stock options
held by him must be exercised within ninety (90) days of October 9, 2003, and
shall remain subject to the terms and conditions of the St. Joseph Capital
Corporation 1996 Stock Incentive Plan and the applicable grant agreements by and
between Mr. Pooley and the Company.

                             UNVESTED STOCK OPTIONS

<Table>
<Caption>
            GRANT DATE                 EXERCISE PRICE            NUMBER OF UNVESTED OPTIONS
            ----------                 --------------            --------------------------
<S>                                    <C>                       <C>
        February 22, 1999                  $16.75                          1,000
        November 1, 2001                   $11.60                          4,000
        September 30, 2002                 $19.00                         1,382.50
</Table>

         SECTION 6. TAG ALONG RIGHTS UPON CHANGE OF CONTROL. If at any time
after October 9, 2003, and through April 9, 2005, there is a public announcement
by the Company of a "Change of Control of Company" (as defined below) and that
publicly-announced Change of Control of Company closes, and if (a) Mr. Pooley
has fully complied with all provisions of SECTION 9, SECTION 10 and SECTION 12
of this Agreement through the closing of the Change of Control of Company, and
(b) Mr. Pooley has, during the period commencing on October 9, 2003, and ending
on the date of the public announcement of the Change of Control of Company,
sold, in a bona fide, arm's length transaction, any Company common stock
acquired pursuant to the exercise of a stock option granted by the Company
("OPTION SHARES"), then the Company, or its successor, agrees to pay to Mr.
Pooley within ten (10) days of Mr. Pooley's written demand an amount equal to:
(i) the per share price received by the Company's stockholders as a result of
the Change of Control of Company minus the per share price, excluding any
commissions, at which Mr. Pooley sold the Option Shares; times (ii) the number
of Option Shares sold. Within three (3) business days of the sale of any Option
Shares, Mr. Pooley shall provide the Company with a signed written notice of the
number of Option Shares sold, the date of sale and the per share price at which
they were sold, and a copy of any trade confirmation statement. For purposes of
this Section, a "Change of Control of Company" shall mean the acquisition by any
person or entity of: (y) legal or beneficial ownership (as defined by Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of greater
than 51% of the then issued and outstanding voting stock of the Company through
any transaction; or (z) all or substantially all of the assets of the Company.
If Mr. Pooley breaches any of his obligations under SECTION 9, SECTION 10 or
SECTION 12 of this Agreement, then he automatically forfeits his tag along
rights under this SECTION 6. In addition, the tag along rights provided in this
SECTION 6 shall not attach to any shares of the Company's common stock that Mr.
Pooley purchases in the open market.

                                       2
<PAGE>

         SECTION 7. EXPENSE REIMBURSEMENT. The Company agrees to reimburse Mr.
Pooley for all appropriate business expense reimbursements incurred through
October 9, 2003, and submitted in accordance with the Company's policy regarding
expense reimbursements. Mr. Pooley agrees to submit such expenses for
reimbursement no later than October 10, 2003.

         SECTION 8. REPRESENTATIONS AND WARRANTIES.

                  (a) Mr. Pooley hereby represents and warrants that any
         business information that he has acquired during his employment and
         that he reasonably believes is or would be of significance to the
         Company or the Bank and that is not otherwise known to the Company or
         the Bank has been conveyed to either Mr. John Rosenthal, Mr. Brian
         Brady or Mr. Todd Martin.

                  (b) Mr. Pooley further represents and warrants to the Company
         and the Bank that he has not said or done anything, or omitted to say
         or do anything, that: violates any law, regulation or policy and
         procedure of the Company or the Bank; or would give rise to any claim,
         suit or action by either the Company or the Bank against him.

         SECTION 9. CONDUCT. The Company, the Bank and Mr. Pooley agree that, at
all times following the signing of this Agreement, they shall not engage in any
vilification of or slander against the other, and shall refrain from making any
false, negative, critical or disparaging statements, implied or expressed,
concerning the other, including, but not limited to, management style,
performance, capability, methods of doing business, the quality of products and
services, role in the community or treatment of employees. The parties further
agree to do nothing that would damage the other's business reputation or good
will. For purposes of this SECTION 9, the persons whose actions may be
attributable to the Company or the Bank are limited to each director of the
Company and each director and the current three Senior Vice Presidents of the
Bank. The Company and the Bank agree that, if called by any prospective employer
of Mr. Pooley for a reference, the Company and the Bank shall simply confirm Mr.
Pooley's dates of employment and his job titles. Mr. Pooley agrees that he shall
direct all communications for references to Mr. Rosenthal, Chairman of the Board
of the Company.

         SECTION 10. EMPLOYMENT AGREEMENT TERMINATION. The Company and Mr.
Pooley agree and acknowledge that the certain Employment Agreement between Mr.
Pooley and the Company dated October 1, 2002, as amended (the "Employment
Agreement"), shall terminate as of the Effective Date, provided, however, that
SECTION 3 and SECTION 5 of the Employment Agreement shall survive the
termination of the Employment Agreement and those sections are expressly
incorporated herein by reference.

         SECTION 11. RELEASE AND WAIVER OF ALL CLAIMS.

                  (a) Mr. Pooley, on his own behalf and that of his heirs,
         representatives, executors, attorneys, administrators, successors, and
         assigns, fully releases and discharges the Company, the Bank, their
         predecessors, successors, subsidiaries, affiliates, and assigns, and
         its and their directors, officers, employees and agents, whether in
         their individual or official capacities, and the current and former
         trustees or administrators of any retirement or other benefit plan
         applicable to the employees or former employees of

                                       3
<PAGE>

         the Company, in their official and individual capacities, from any and
         all liability, claims and demands, including, but not limited to,
         claims, demands or actions arising under the Company's and the Bank's
         policies and procedures, whether formal or informal; the United States
         or State of Indiana Constitutions; Title VII of the Civil Rights Act of
         1964, as amended; the Civil Rights Act of 1991; the Indiana Civil
         Rights Act; the Employee Retirement Income Security Act of 1974, as
         amended; the Age Discrimination in Employment Act, as amended; the
         Americans With Disabilities Act, as amended; Executive Order 11246; and
         any other federal, state or local statute, ordinance or regulation with
         respect to employment, and in addition thereto, from any other claims,
         demands or actions with respect to Mr. Pooley's employment with the
         Company or the Bank or other association with the Company or the Bank,
         including, but not limited to, Mr. Pooley's termination from employment
         with the Company and the Bank, the Employment Agreement, any right of
         payment for disability or any other statutory or contractual right of
         payment or any claim for relief on the basis of any alleged tort or
         breach of contract under the common law of the State of Indiana or any
         other state including, but not limited to, defamation, intentional or
         negligent infliction of emotional distress, breach of the covenant of
         good faith and fair dealing, promissory estoppel and negligence. This
         release shall not apply to any claim based on any act that occurs after
         the Effective Date or to bar any claim for enforcement of the rights
         under this Agreement.

                  (b) Based on Mr. Pooley's representations and warranties
         contained in SECTION 8, the Company and the Bank, on behalf of
         themselves and their respective directors, officers, successors and
         assigns, hereby release and discharge Mr. Pooley and his heirs,
         representatives, executors, attorneys, administrators, successors and
         assigns, from any and all liability, claims and demands, including, but
         not limited to, claims, demands or action arising under the Company's
         and the Bank's policies and procedures, whether formal or informal; the
         United States or State of Indiana Constitutions; and Mr. Pooley's
         employment with the Company or the Bank or other association with the
         Company or the Bank. This release shall not apply to any claims based
         on any act that occurs after the Effective Date or to bar any claim for
         enforcement of the rights under this Agreement. This release shall be
         considered null and void if any of the representations and warranties
         made by Mr. Pooley in SECTION 8 are, or are proven to be, untrue or
         inaccurate.

         SECTION 12. COVENANT NOT TO SUE.

                  (a) Mr. Pooley represents and warrants that he has not
         assigned or filed any claim, demand or charge to date against the
         Company or the Bank or any of their respective directors, officers or
         employees. Mr. Pooley further represents and warrants that he will not
         sue the Company or the Bank, or its or their officers, directors,
         shareholders, employees, or agents with respect to any action of the
         Company, the Bank or their directors, officers or employees related to
         anything that has occurred or failed to occur from the inception of the
         Company or the Bank until the Effective Date. This covenant shall not
         bar any suit to enforce the rights under this Agreement.

                  (b) Based on Mr. Pooley's representations and warranties
        contained in SECTION 8, the Company and the Bank represent and warrant
        that they have not assigned or

                                       4
<PAGE>

         filed any claim, demand or charge to date against Mr. Pooley or any of
         his heirs or agents. The Company and the Bank further represent and
         warrant that they will not sue Mr. Pooley or his heirs or agents with
         respect to any action by Mr. Pooley related to anything that has
         occurred or failed to occur from the inception of the Company or the
         Bank until the Effective Date. This covenant shall not bar any suit to
         enforce the rights under this Agreement. This covenant shall be
         considered null and void if any of the representations and warranties
         made by Mr. Pooley in SECTION 8 are, or are proven to be, untrue or
         inaccurate.

         SECTION 13. RETURN OF COMPANY PROPERTY AND PROVISION OF PASSWORDS. Mr.
Pooley represents that he has returned all property of the Company and the Bank
that is in his possession, custody or control, including all documents, records
and tangible things that are not publicly available and reflect, refer or relate
to the Company and the Bank's business affairs, operations or customers, and all
copies of the foregoing. In addition, Mr. Pooley hereby provides the following
passwords to the following systems and programs:

         System:                                 Password:
                  ---------------------------               ------------------
         System:                                 Password:
                  ---------------------------               ------------------

         SECTION 14. UNEMPLOYMENT. Mr. Pooley acknowledges that the Company is
providing Mr. Pooley with the severance pay and benefits provided hereunder as a
financial bridge during a possible period of unemployment for Mr. Pooley.
Therefore, Mr. Pooley agrees that, if he applies for unemployment compensation
under the Indiana unemployment insurance law or any other state or federal
unemployment compensation law at any time prior to the date that is twelve (12)
months after the date the severance payment is made hereunder, then in such
event: (a) the Company shall provide the agency investigating that claim with a
copy of this Agreement; and (b) Mr. Pooley shall immediately repay all payments
made to him under SECTION 2 and he shall forfeit entitlement to any payments yet
outstanding under SECTION 2.

         SECTION 15. REPRESENTATIONS. Mr. Pooley acknowledges that, in
accordance with the Age Discrimination in Employment Act, as amended by the
Older Workers Benefit Protection Act of 1990, he has been advised to seek, and
has been advised by, legal counsel regarding the terms of this Agreement,
including the release of all claims and waiver of rights set forth in SECTION
11. Mr. Pooley acknowledges that he has been offered at least twenty-one (21)
days to consider this Agreement, and further acknowledges that any revisions to
this Agreement will not restart the twenty-one (21) day period. After having
been so advised, and without coercion of any kind, Mr. Pooley FREELY, KNOWINGLY,
and VOLUNTARILY enters into this Agreement. Mr. Pooley further acknowledges that
he may revoke this Agreement within seven (7) days after execution and further
understands that this Agreement shall not become effective or enforceable until
seven (7) days after execution (the "EFFECTIVE DATE"). Any revocation must be in
writing and directed to St. Joseph Capital Corporation, 3820 Edison Lakes
Parkway, Mishawaka, Indiana 46545, Attention: Chairman of the Board. If sent by
mail, any revocation must be postmarked within such seven (7) day period and
sent by certified mail, return receipt requested. If Mr. Pooley revokes this
Agreement, then all obligations of the Company and the Bank under this
Agreement, including, but not limited to, SECTION 2, SECTION 5 and SECTION 6 are
also revoked.

                                       5
<PAGE>

         SECTION 16. NO ADMISSIONS. The Company and the Bank deny that they or
any of their directors, officers, employees or agents have taken any improper
action against Mr. Pooley, and Mr. Pooley agrees that this Agreement shall not
be admissible in any proceeding as evidence of improper action by the Company or
the Bank or any of its respective directors, officers, employees or agents.

         SECTION 17. CONFIDENTIALITY. Mr. Pooley and the Company and the Bank
agree to keep the existence and the terms of this Agreement confidential, except
as may be required by law or in connection with the preparation of tax returns,
or as may be required to be disclosed by the Company in accordance with
applicable federal securities laws.

         SECTION 18. INFORMATION REQUESTS. Mr. Pooley acknowledges and agrees
that, if he has any questions regarding the terms of this Agreement or needs to
contact the Bank relative to any issues in this Agreement, he shall direct all
questions and inquiries to the Chairman of the Human Resources Committee of the
Board of Directors of the Company.

         SECTION 19. NON-WAIVER. The Company's or the Bank's waiver of a breach
of this Agreement by Mr. Pooley shall not be construed or operate as a waiver of
any subsequent breach by Mr. Pooley of the same or of any other provision of
this Agreement.

         SECTION 20. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the parties, and shall be final and binding as to all claims that
have been or could have been advanced by or on behalf of Mr. Pooley pursuant to
any claim arising out of or related in any way to Mr. Pooley's employment with
the Company and the Bank and the termination of that employment.

         SECTION 21. GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement, and the performance of the
obligations imposed by this Agreement shall be governed by the internal laws of
the State of Indiana applicable to contracts made and wholly to be performed in
such state without regard to conflicts of laws, except that the law of the state
of Delaware shall apply to all matters of corporate law and except to the extent
superseded by federal law.

         SECTION 22. ASSIGNMENT. Other than the obligations of the Company under
SECTION 6 of this Agreement, neither this Agreement nor any of the rights or
obligations hereunder may be assigned, in whole or in part, by any of the
parties to this Agreement without the prior written consent of the other parties
to this Agreement and any purported assignment in violation hereof shall be void
and of no effect.

         SECTION 23. JURISDICTION AND SERVICE OF PROCESS. Any action or
proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement shall be brought against any of the parties in the courts
of the State of Indiana, County of St. Joseph or, if it has or can acquire
jurisdiction, in the United States District Court serving the County of St.
Joseph and each of the parties consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.

                                       6
<PAGE>

         SECTION 24. NOTICES. Except as otherwise specifically provided in this
Agreement, all notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given if
delivered by hand or by nationally recognized overnight delivery service
(receipt requested) or if mailed by registered or certified mail (return receipt
requested) to a party at his or its address set forth on the signature page of
this Agreement or to such other place as such party shall furnish to the other
party in writing. Except as otherwise provided herein, all such notices,
consents, waivers and other communications shall be effective: (a) if delivered
by hand, when delivered; (b) if mailed in the manner provided in this Section,
five (5) Business Days after deposit with the United States Postal Service; or
(c) if delivered by overnight express delivery service, on the next Business Day
after deposit with such service.

         SECTION 25. BINDING ON HEIRS. The rights and obligations of the parties
under SECTION 2 and SECTION 6 of this Agreement shall inure to, and be binding
upon, the heirs, representatives, executors and successors of the parties.

                     [THIS SPACE LEFT INTENTIONALLY BLANK]

                                       7
<PAGE>

         IN WITNESS WHEREOF each of the parties has executed this Agreement as
of the dates set forth below each party's respective signature.

ST. JOSEPH CAPITAL CORPORATION

/s/ John W. Rosenthal                        /s/ Edward R. Pooley
-------------------------------------        -----------------------------------
By:     John W. Rosenthal                    Edward R. Pooley
Title:  Chief Executive Officer

3820 Edison Lakes Parkway                    50600 Pine Row Court
-------------------------------------        -----------------------------------
Mishawaka, Indiana  46545                    Granger, IN 46530
-------------------------------------        -----------------------------------
            Address                                       Address

Date:  October 15, 2003                      Date:  10/15/03
       ------------------------------               ----------------------------

ST. JOSEPH CAPITAL BANK

/s/  John W. Rosenthal
-------------------------------------
By:     John W. Rosenthal
Title:  Chief Executive Officer

3820 Edison Lakes Parkway
-------------------------------------
Mishawaka, Indiana  46545
-------------------------------------
              Address

Date:  October 15, 2003
       ------------------------------

                                       8<PAGE>
                                                                    EXHIBIT 10.2

                         SEVERANCE AGREEMENT AND RELEASE

         THIS SEVERANCE AGREEMENT AND RELEASE (this "AGREEMENT") is made and
entered into by and among NANCY N. KING ("MS. KING"), ST. JOSEPH CAPITAL
CORPORATION, a Delaware corporation (the "COMPANY"), and ST. JOSEPH CAPITAL BANK
(the "BANK"), an Indiana state bank, and this Agreement is effective as of the
Effective Date (as defined in SECTION 15).

         WHEREAS, Ms. King has been employed by the Company and the Bank; and

         WHEREAS, Ms. King's employment with the Company and the Bank terminated
by mutual agreement; and

         WHEREAS, the parties are desirous of effecting an amicable separation,
and to effect such desire, the Company offers Ms. King a severance amount if Ms.
King agrees to settle, compromise and dispose of any and all claims and issues
of any kind and nature that Ms. King has, or may have, or may claim to have
against the Company and the Bank, including, but not limited to, any claims
arising out of, or in any way related to, Ms. King's employment or Ms. King's
separation from employment with the Company and the Bank; and

         NOW, THEREFORE, the parties agree as follows:

         SECTION 1. RESIGNATION FROM EMPLOYMENT AND OFFICER POSITIONS. Ms. King
hereby resigns from her employment with both the Company and the Bank and from
her officer positions with both the Company and the Bank, all such resignations
effective October 9, 2003, and her last date of employment shall be October 9,
2003.

         SECTION 2. SEVERANCE. In consideration for the promises made in this
Agreement, the Company agrees to pay Ms. King severance pay in the aggregate sum
of one hundred and thirty thousand nine hundred and fifty-five dollars
($130,955), less applicable withholding taxes, employment taxes, and other
deductions properly chargeable to Ms. King to the extent required by law,
representing salary for a twelve (12) month period and a bonus. The Company
agrees that Ms. King has the option of requesting that all or any portion of the
$130,955.00 shall be paid to Ms. King before December 31, 2003. Any portion of
the severance pay of $130,955.00 that is not paid by December 31, 2003, shall be
paid to Ms. King on January 2, 2004. Ms. King expressly agrees, understands, and
acknowledges that the severance pay provided to her under this SECTION 2 and the
rights and benefits conferred in SECTION 5 and SECTION 6 constitute amounts and
rights in excess of that to which a separated employee of the Company or the
Bank would be entitled without entering into this Agreement and are being
provided by the Company as consideration for Ms. King entering into this
Agreement, including, but not limited to, the provisions of SECTION 10 and
SECTION 12 and the release of claims and waiver of rights provided for in
SECTION 11.

         SECTION 3. ACCRUED COMPENSATION AND VACATION PAY. Ms. King will be
provided a final pay check on October 15, 2003, for all salary and vacation pay
earned through her last date of employment in accordance with Company and Bank
policies. No later than October 10, 2003,

<PAGE>

Ms. King shall provide to management her accounting of any vacation pay earned
but not taken as of October 9, 2003.

         SECTION 4. COBRA RIGHTS. The Bank shall provide Ms. King with an
opportunity to continue, at Ms. King's expense, health insurance for eighteen
(18) months in accordance with the provisions of COBRA.

         SECTION 5. STOCK OPTIONS. The Company agrees to take all actions
necessary to cause Ms. King's unvested stock options, as set forth below, to
vest and become fully exercisable as of the Effective Date (as defined in
SECTION 15 below). Ms. King agrees and acknowledges that all stock options held
by her must be exercised within ninety (90) days of October 9, 2003, and shall
remain subject to the terms and conditions of the St. Joseph Capital Corporation
1996 Stock Incentive Plan and the applicable grant agreements by and between Ms.
King and the Company.

                             UNVESTED STOCK OPTIONS

<Table>
<Caption>
            GRANT DATE                 EXERCISE PRICE             NUMBER OF UNVESTED OPTIONS
            ----------                 --------------             --------------------------
<S>                                    <C>                        <C>
        February 22, 1999                  $16.75                            1,200
        November 1, 2001                   $11.60                            4,000
        September 30, 2002                 $19.00                          1,452.50
</Table>

         SECTION 6. TAG ALONG RIGHTS UPON CHANGE OF CONTROL. If at any time
after October 9, 2003, and through April 9, 2005, there is a public announcement
by the Company of a "Change of Control of Company" (as defined below) and that
publicly-announced Change of Control of Company closes, and if (a) Ms. King has
fully complied with all provisions of SECTION 9, SECTION 10 and SECTION 12 of
this Agreement through the closing of the Change of Control of Company, and (b)
Ms. King has, during the period commencing on October 9, 2003, and ending on the
date of the public announcement of the Change of Control of Company, sold, in a
bona fide, arm's length transaction, any Company common stock acquired pursuant
to the exercise of a stock option granted by the Company ("OPTION SHARES"), then
the Company, or its successor, agrees to pay to Ms. King within ten (10) days of
Ms. King's written demand an amount equal to: (i) the per share price received
by the Company's stockholders as a result of the Change of Control of Company
minus the per share price, excluding any commissions, at which Ms. King sold the
Option Shares; times (ii) the number of Option Shares sold. Within three (3)
business days of the sale of any Option Shares, Ms. King shall provide the
Company with a signed written notice of the number of Option Shares sold, the
date of sale and the per share price at which they were sold, and a copy of any
trade confirmation statement. For purposes of this Section, a "Change of Control
of Company" shall mean the acquisition by any person or entity of: (y) legal or
beneficial ownership (as defined by Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) of greater than 51% of the then issued and
outstanding voting stock of the Company through any transaction; or (z) all or
substantially all of the assets of the Company. If Ms. King breaches any of her
obligations under SECTION 9, SECTION 10 or SECTION 12 of this Agreement, then
she automatically forfeits her tag along rights under this SECTION 6. In
addition, the tag along rights provided in this SECTION 6 shall not attach to
any shares of the Company's common stock that Ms. King purchases in the open
market.

                                       2
<PAGE>

         SECTION 7. EXPENSE REIMBURSEMENT. The Company agrees to reimburse Ms.
King for all appropriate business expense reimbursements incurred through
October 10, 2003, and submitted in accordance with the Company's policy
regarding expense reimbursements. Ms. King agrees to submit such expenses for
reimbursement no later than October 10, 2003.

         SECTION 8. REPRESENTATIONS AND WARRANTIES.

                  (a) Ms. King hereby represents and warrants that any business
         information that she has acquired during her employment and that she
         reasonably believes is or would be of significance to the Company or
         the Bank and that is not otherwise known to the Company or the Bank has
         been conveyed to either Mr. John Rosenthal, Mr. Brian Brady or Mr. Todd
         Martin.

                  (b) Ms. King further represents and warrants to the Company
         and the Bank that she has not said or done anything, or omitted to say
         or do anything, that: violates any law, regulation or policy and
         procedure of the Company or the Bank; or would give rise to any claim,
         suit or action by either the Company or the Bank against her.

         SECTION 9. CONDUCT. The Company, the Bank and Ms. King agree that, at
all times following the signing of this Agreement, they shall not engage in any
vilification of or slander against the other, and shall refrain from making any
false, negative, critical or disparaging statements, implied or expressed,
concerning the other, including, but not limited to, management style,
performance, capability, methods of doing business, the quality of products and
services, role in the community or treatment of employees. The parties further
agree to do nothing that would damage the other's business reputation or good
will. For purposes of this SECTION 9, the persons whose actions may be
attributable to the Company or the Bank are limited to each director of the
Company and each director and the current three Senior Vice Presidents of the
Bank. The Company and the Bank agree that, if called by any prospective employer
of Ms. King for a reference, the Company and the Bank shall simply confirm Ms.
King's dates of employment and her job titles. Ms. King agrees that she shall
direct all communications for references to Mr. Rosenthal, Chairman of the Board
of the Company.

         SECTION 10. EMPLOYMENT AGREEMENT TERMINATION. The Company and Ms. King
agree and acknowledge that the certain Employment Agreement between Ms. King and
the Company dated October 1, 2002, as amended (the "Employment Agreement"),
shall terminate as of the Effective Date, provided, however, that SECTION 3 and
SECTION 5 of the Employment Agreement shall survive the termination of the
Employment Agreement and those sections are expressly incorporated herein by
reference.

         SECTION 11. RELEASE AND WAIVER OF ALL CLAIMS.

                  (a) Ms. King, on her own behalf and that of her heirs,
         representatives, executors, attorneys, administrators, successors, and
         assigns, fully releases and discharges the Company, the Bank, their
         predecessors, successors, subsidiaries, affiliates, and assigns, and
         its and their directors, officers, employees and agents, whether in
         their individual or official capacities, and the current and former
         trustees or administrators of any retirement or other benefit plan
         applicable to the employees or former employees of

                                       3
<PAGE>

         the Company, in their official and individual capacities, from any and
         all liability, claims and demands, including, but not limited to,
         claims, demands or actions arising under the Company's and the Bank's
         policies and procedures, whether formal or informal; the United States
         or State of Indiana Constitutions; Title VII of the Civil Rights Act of
         1964, as amended; the Civil Rights Act of 1991; the Indiana Civil
         Rights Act; the Employee Retirement Income Security Act of 1974, as
         amended; the Age Discrimination in Employment Act, as amended; the
         Americans With Disabilities Act, as amended; Executive Order 11246; and
         any other federal, state or local statute, ordinance or regulation with
         respect to employment, and in addition thereto, from any other claims,
         demands or actions with respect to Ms. King's employment with the
         Company or the Bank or other association with the Company or the Bank,
         including, but not limited to, Ms. King's termination from employment
         with the Company and the Bank, the Employment Agreement, any right of
         payment for disability or any other statutory or contractual right of
         payment or any claim for relief on the basis of any alleged tort or
         breach of contract under the common law of the State of Indiana or any
         other state including, but not limited to, defamation, intentional or
         negligent infliction of emotional distress, breach of the covenant of
         good faith and fair dealing, promissory estoppel and negligence. This
         release shall not apply to any claim based on any act that occurs after
         the Effective Date or to bar any claim for enforcement of the rights
         under this Agreement.

                  (b) Based on Ms. King's representations and warranties
         contained in SECTION 8, the Company and the Bank, on behalf of
         themselves and their respective directors, officers, successors and
         assigns, hereby release and discharge Ms. King and her heirs,
         representatives, executors, attorneys, administrators, successors and
         assigns, from any and all liability, claims and demands, including, but
         not limited to, claims, demands or action arising under the Company's
         and the Bank's policies and procedures, whether formal or informal; the
         United States or State of Indiana Constitutions; and Ms. King's
         employment with the Company or the Bank or other association with the
         Company or the Bank. This release shall not apply to any claims based
         on any act that occurs after the Effective Date or to bar any claim for
         enforcement of the rights under this Agreement. This release shall also
         be considered null and void if any of the representations and
         warranties made by Ms. King in SECTION 8 are, or are proven to be,
         untrue or inaccurate.

         SECTION 12. COVENANT NOT TO SUE.

                  (a) Ms. King represents and warrants that she has not assigned
         or filed any claim, demand or charge to date against the Company or the
         Bank or any of their respective directors, officers or employees. Ms.
         King further represents and warrants that she will not sue the Company
         or the Bank, or its or their officers, directors, shareholders,
         employees, or agents with respect to any action of the Company, the
         Bank or their directors, officers or employees related to anything that
         has occurred or failed to occur from the inception of the Company or
         the Bank until the Effective Date. This covenant shall not bar any suit
         to enforce the rights under this Agreement.

                  (b) Based on Ms. King's representations and warranties
         contained in SECTION 8, the Company and the Bank represent and warrant
         that they have not assigned or filed any claim, demand or charge to
         date against Ms. King or any of her heirs or agents. The

                                       4
<PAGE>

         Company and the Bank further represent and warrant that they will not
         sue Ms. King or her heirs or agents with respect to any action by Ms.
         King related to anything that has occurred or failed to occur from the
         inception of the Company or the Bank until the Effective Date. This
         covenant shall not bar any suit to enforce the rights under this
         Agreement. This covenant shall be considered null and void if any of
         the representations and warranties made by Ms. King in SECTION 8 are,
         or are proven to be, untrue or inaccurate.

         SECTION 13. RETURN OF COMPANY PROPERTY AND PROVISION OF PASSWORDS. Ms.
King represents that she has returned all property of the Company and the Bank
that is in her possession, custody or control, including all documents, records
and tangible things that are not publicly available and reflect, refer or relate
to the Company and the Bank's business affairs, operations or customers, and all
copies of the foregoing. In addition, Ms. King hereby provides the following
passwords to the following systems and programs:

         System:                                 Password:
                  --------------------------                -------------------
         System:                                 Password:
                  --------------------------                -------------------

         SECTION 14. UNEMPLOYMENT. Ms. King acknowledges that the Company is
providing Ms. King with the severance pay and benefits provided hereunder as a
financial bridge during a possible period of unemployment for Ms. King.
Therefore, Ms. King agrees that, if she applies for unemployment compensation
under the Indiana unemployment insurance law or any other state or federal
unemployment compensation law at any time prior to the date that is twelve (12)
months after the date the severance payment is made hereunder, then in such
event: (a) the Company shall provide the agency investigating that claim with a
copy of this Agreement; and (b) Ms. King shall immediately repay all payments
made to her under SECTION 2 and she shall forfeit entitlement to any payments
yet outstanding under SECTION 2.

         SECTION 15. REPRESENTATIONS. Ms. King acknowledges that, in accordance
with the Age Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act of 1990, she has been advised to seek, and has been
advised by, legal counsel regarding the terms of this Agreement, including the
release of all claims and waiver of rights set forth in SECTION 11. Ms. King
acknowledges that she has been offered at least twenty-one (21) days to consider
this Agreement, and further acknowledges that any revisions to this Agreement
will not restart the twenty-one (21) day period. After having been so advised,
and without coercion of any kind, Ms. King freely, knowingly, and voluntarily
enters into this Agreement. Ms. King further acknowledges that she may revoke
this Agreement within seven (7) days after execution and further understands
that this Agreement shall not become effective or enforceable until seven (7)
days after execution (the "EFFECTIVE DATE"). Any revocation must be in writing
and directed to St. Joseph Capital Corporation, 3820 Edison Lakes Parkway,
Mishawaka, Indiana 46545, Attention: Chairman of the Board. If sent by mail, any
revocation must be postmarked within such seven (7) day period and sent by
certified mail, return receipt requested. If Ms. King revokes this Agreement,
then all obligations of the Company and the Bank under this Agreement,
including, but not limited to, SECTION 2, SECTION 5 and SECTION 6 are also
revoked.

         SECTION 16. NO ADMISSIONS. The Company and the Bank deny that they or
any of their directors, officers, employees or agents have taken any improper
action against Ms. King,

                                       5
<PAGE>

and Ms. King agrees that this Agreement shall not be admissible in any
proceeding as evidence of improper action by the Company or the Bank or any of
its respective directors, officers, employees or agents.

         SECTION 17. CONFIDENTIALITY. Ms. King and the Company and the Bank
agree to keep the existence and the terms of this Agreement confidential, except
as may be required by law or in connection with the preparation of tax returns,
or as may be required to be disclosed by the Company in accordance with
applicable federal securities laws.

         SECTION 18. INFORMATION REQUESTS. Ms. King acknowledges and agrees
that, if she has any questions regarding the terms of this Agreement or needs to
contact the Bank relative to any issues in this Agreement, she shall direct all
questions and inquiries to the Chairman of the Human Resources Committee of the
Board of Directors of the Company.

         SECTION 19. NON-WAIVER. The Company's or the Bank's waiver of a breach
of this Agreement by Ms. King shall not be construed or operate as a waiver of
any subsequent breach by Ms. King of the same or of any other provision of this
Agreement.

         SECTION 20. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the parties, and shall be final and binding as to all claims that
have been or could have been advanced by or on behalf of Ms. King pursuant to
any claim arising out of or related in any way to Ms. King's employment with the
Company and the Bank and the termination of that employment.

         SECTION 21. GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement, and the performance of the
obligations imposed by this Agreement shall be governed by the internal laws of
the State of Indiana applicable to contracts made and wholly to be performed in
such state without regard to conflicts of laws, except that the law of the state
of Delaware shall apply to all matters of corporate law and except to the extent
superseded by federal law.

         SECTION 22. ASSIGNMENT. Other than the obligations of the Company under
SECTION 6 of this Agreement, neither this Agreement nor any of the rights or
obligations hereunder may be assigned, in whole or in part, by any of the
parties to this Agreement without the prior written consent of the other parties
to this Agreement and any purported assignment in violation hereof shall be void
and of no effect.

         SECTION 23. JURISDICTION AND SERVICE OF PROCESS. Any action or
proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement shall be brought against any of the parties in the courts
of the State of Indiana, County of St. Joseph or, if it has or can acquire
jurisdiction, in the United States District Court serving the County of St.
Joseph and each of the parties consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.

         SECTION 24. NOTICES. Except as otherwise specifically provided in this
Agreement, all notices, consents, waivers and other communications under this
Agreement must be in writing

                                       6
<PAGE>

and will be deemed to have been duly given if delivered by hand or by nationally
recognized overnight delivery service (receipt requested) or if mailed by
registered or certified mail (return receipt requested) to a party at her or its
address set forth on the signature page of this Agreement or to such other place
as such party shall furnish to the other party in writing. Except as otherwise
provided herein, all such notices, consents, waivers and other communications
shall be effective: (a) if delivered by hand, when delivered; (b) if mailed in
the manner provided in this Section, five (5) Business Days after deposit with
the United States Postal Service; or (c) if delivered by overnight express
delivery service, on the next Business Day after deposit with such service.

         SECTION 25. BINDING ON HEIRS. The rights and obligations of the parties
under SECTION 2 and SECTION 6 of this Agreement shall inure to, and be binding
upon, the heirs, representatives, executors and successors of the parties.

                      [THIS SPACE LEFT INTENTIONALLY BLANK]

                                       7
<PAGE>

         IN WITNESS WHEREOF each of the parties has executed this Agreement as
of the dates set forth below each party's respective signature.

ST. JOSEPH CAPITAL CORPORATION

/s/  John W. Rosenthal                      /s/  Nancy N. King
-------------------------------------       ------------------------------------
By:     John W. Rosenthal                   Nancy N. King
Title:  Chief Executive Officer

3820 Edison Lakes Parkway                   8167 N. Tippecanoe Dr.
-------------------------------------       ------------------------------------
Mishawaka, Indiana  46545                   Walkerton, IN 46574
-------------------------------------       ------------------------------------
            Address                                     Address

Date:  October 15, 2003                     Date:  10/15/03
       ------------------------------              -----------------------------

ST. JOSEPH CAPITAL BANK

/s/ John W. Rosenthal
-------------------------------------
By:     John W. Rosenthal
Title:  Chief Executive Officer

3820 Edison Lakes Parkway
-------------------------------------
Mishawaka, Indiana  46545
-------------------------------------
              Address

Date:  October 15, 2003
       ------------------------------

                                       8

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