Document:

Exhibit 10.3

EXHIBIT 10.3 —  Schedule of Director Compensation

Compensation of Directors. Each director of the Corporation is also a director of First
Financial Bank (“FFB”), the lead subsidiary bank of the Corporation, and receives directors’ fees
from each organization. For 2011 a director of the Corporation and FFB will receive a fee of $750
for each board meeting attended.

Non-employee directors also receive a fee for meetings attended of the Audit Committee of
$1,000, the Compensation Committee of $1,000, the Governance/Nominating Committee of $500, and the
Loan Discount Committee of $300. Each director also will receive from a quarterly director’s fee of
$11,250. No non-employee director served as a director of any other subsidiary of the Corporation.

Directors of the Corporation and FFB who are not yet 70 years of age may participate in a
deferred director’s fee program at each institution. Under this program, a director may defer
$6,000 of his or her director’s fees each year over a five-year period. When the director reaches
the age of 65 or age 70, the director may elect to receive payments over a ten-year period. The
amount of the deferred fees is used to purchase an insurance product which funds these payments.
Each year from the initial date of deferral until payments begin at age 65 or 70, the Corporation
accrues a non-cash expense which will equal in the aggregate the amount of the payments to be made
to the director over the ten-year period. The Corporation expects that the cash surrender value of
the insurance policy will offset the amount of expenses accrued. If a director fails for any reason
other than death to serve as a director during the entire five-year period, or the director fails
to attend at least 60 regular or special meetings, the amount to be received at age 65 or 70, as
applicable, will be pro-rated appropriately.

Directors also may receive compensation previously accrued under the Corporation’s 2005
Long-Term Incentive Plan, no other benefits may be accrued under this plan. Under this plan,
directors received 90, 100 or 110 percent of the director’s “award amount” if the Corporation and
FFB attained certain goals established by the Corporation’s Compensation Committee. See Exhibit
10.3 to this Form 10-K for a description of this plan.Exhibit 10.4

EXHIBIT 10.4 —  Schedule of Named Executive Officers Compensation

On December 21, 2010, the Compensation Committee of First Financial Corporation (the “Corporation”)
set the 2011 annual base salaries of the named executive officers. These amounts are set forth in
the table below.

	 	 	 	 	 
	Name and Principal Position	 	2011 Base Salary	 
	Donald E. Smith
	 	$	709,931	 
	President and Chairman of the Corporation; Chairman of
First Financial Bank, NA
	 	 	 	 
	Norman L. Lowery
	 	$	585,826	 
	Vice Chairman, CEO and Vice President of the Corporation;
President and CEO of First Financial Bank, NA
	 	 	 	 
	Thomas S. Clary
	 	$	182,206	 
	Senior Vice President and CCO of First Financial Bank, NA
	 	 	 	 
	Norman D. Lowery
	 	$	180,400	 
	Vice President and COO of First Financial Bank, NA
	 	 	 	 
	Rodger A. McHargue
	 	$	179,812	 
	CFO of the Corporation; Vice President and CFO of First
Financial Bank, NA
	 	 	 	 
	Richard O. White
	 	$	170,831	 
	Senior Vice President of First Financial Bank, NAExhibit 10.8

Exhibit 10.8

FIRST FINANCIAL CORPORATION

2010 SHORT-TERM INCENTIVE COMPENSATION PLAN

(Effective January 1, 2010)

ARTICLE I

Introduction

1.1 Objective. The First Financial Corporation 2010 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 and board of director fees actually
paid by the Company or a Subsidiary to an employee while such employee is a Participant
during the 2010 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 and salary
deferral contributions made to the First Financial Corporation 2005 Executives’
Deferred Compensation Plan.

	 	(d)	 	“Board” means the Board of Directors of the Company.

 

 

 

	 	(e)	 	“Cause” means:

	 	(i)	 	An intentional act of fraud, embezzlement, theft or personal
dishonesty; willful misconduct, or breach of fiduciary duty involving personal
profit by the Participant in the course of his employment. No act or failure
to act shall be deemed to have been intentional or willful if it was due
primarily to an error in judgment or negligence. An act or failure to act
shall be considered intentional or willful if it is not in good faith and if it
is without a reasonable belief that the action or failure to act is in the best
interest of the Company or a Subsidiary;

	 	(ii)	 	Intentional wrongful damage by the Participant to the business
or property of the Company or a Subsidiary, causing material harm to the
Company or a Subsidiary;

	 	(iii)	 	Breach by the Participant of any confidentiality or
non-disclosure agreement in effect from time to time with the Company or a
Subsidiary;

	 	(iv)	 	Gross negligence or insubordination by the Participant in the
performance of his duties; or

	 	(v)	 	Removal or permanent prohibition of the Participant from
participating in the conduct of Company’s or a Subsidiary’s affairs by an order
issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act,
12 USC 1818(e)(4) and (g)(1).

	 	(f)	 	“Change in Control” means any of the following:

	 	(i)	 	Change in Ownership. A change in the ownership of the
Company or a Subsidiary occurs on the date that any person, or group of
persons, as defined below, acquires ownership of stock of the Company or a
Subsidiary that, together with stock held by the person or group, constitutes
more than 50 percent of the total fair market value or total voting power of
the stock of the Company or a Subsidiary. However, if any person or group is
considered to own more than 50 percent of the total fair market value or total
voting power of the stock, the acquisition of additional stock by the same
person or group is not considered to cause a change in the ownership of the
Company or a Subsidiary (or to cause a change in the effective control of the
Company or a Subsidiary as defined in subsection 1.3(f)(ii). An increase in
the percentage of stock owned by any person or group, as a result of a
transaction in which the Company or a Subsidiary acquires its stock in exchange
for property will be treated as an acquisition of stock for purposes of this
subsection 1.3(f)(i). This subsection 1.3(f)(i) only applies when there is a
transfer of stock of the
Company or a Subsidiary (or issuance of stock of a corporation) and stock in
the Company or a Subsidiary remains outstanding after the transaction.

 

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	 	 	 	For purposes of subsections 1.3(f)(i) and 1.3(f)(ii), persons will not be
considered to be acting as a group solely because they purchase or own stock
of the Company or a Subsidiary at the same time, or as a result of the same
public offering. However, persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock or similar business
transaction with the Company or a Subsidiary. If a person, including an
entity, owns stock in both corporations that enter into a merger,
consolidation, purchase or acquisition of stock or similar transaction, such
shareholder is considered to be acting as a group with other shareholders
only with respect to the ownership in that corporation before the
transaction giving rise to the change and not with respect to the ownership
interest in the other corporation.

	 	(ii)	 	Change in the Effective Control. A change in the
effective control of the Company or a Subsidiary will occur when: (A) any
person or group acquires, or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person(s), ownership of stock
of the Company or a Subsidiary possessing 30 percent or more of the total
voting power; or (B) a majority of members of the Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or
election. However, if any person or group is considered to effectively control
the Company or a Subsidiary, the acquisition of additional control of the
Company or a Subsidiary by the same person(s) is not considered to cause a
change in the effective control.

	 	(iii)	 	Change in the Ownership of a Substantial Portion of the
Subsidiary’s or Company’s Assets. A change in the ownership of a
substantial portion of the Company’s or a Subsidiary’s assets occurs on the
date that any person or group acquires, or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person(s),
assets from the Company or a Subsidiary that have a total gross fair market
value equal to or more than 40 percent of the total gross fair market value of
all of the assets of the Company or a Subsidiary immediately prior to such
acquisition(s). Gross fair market value means the value of the assets of the
Company or a Subsidiary, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

 

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	 	 	 	However, there is no Change in Control under this subsection when there is a
transfer to an entity that is controlled by the shareholders of the Company
or a Subsidiary immediately after the transfer. A transfer of assets by the
Company or a Subsidiary is not treated as a change in the ownership of such
assets if the assets are transferred to: (A) a shareholder of the Company or
a Subsidiary (immediately before the asset transfer) in exchange for or with
respect to its stock; (B) an entity, 50 percent or more of the total value
or voting power of which is owned, directly or indirectly,
by the Company or a Subsidiary; (C) a person, or group of persons, that
owns, directly or indirectly, 50 percent or more of the total value or
voting power of all the outstanding stock of the Company or a Subsidiary or
(D) an entity, at least 50 percent of the total value or voting power of
which is owned, directly or indirectly, by a person described in (C). For
purposes of this subsection 1.3(f)(iii), except as otherwise provided, a
person’s status is determined immediately after the transfer of the assets.
For example, a transfer to a corporation in which the Company or a
Subsidiary has no ownership interest before the transaction, but which is a
majority-owned subsidiary of the Company or a Subsidiary after the
transaction, is not treated as a change in the ownership of the assets of
the Company or a Subsidiary.

	 	 	 	For purposes of this subsection 1.3(e)(iii), persons will not be considered
to be acting as a group solely because they purchase assets of the Company
or a Subsidiary at the same time. However, persons will be considered to be
acting as a group if they are owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of assets, or similar
business transaction with the Company or a Subsidiary. If a person,
including an entity shareholder, owns stock in both corporations that enter
into a merger, consolidation, purchase or acquisition of assets, or similar
transaction, such shareholder is considered to be acting as a group with
other shareholders in a corporation only to the extent of the ownership in
that corporation before the transaction giving rise to the change and not
with respect to the ownership interest in the other corporation.

	 	 	 	Notwithstanding the foregoing, the acquisition of Company or Subsidiary stock by any
retirement plan sponsored by the Company or a Subsidiary or an affiliate of the
Company or a Subsidiary will not constitute a Change in Control.

	 	(g)	 	“Code” means the Internal Revenue Code of 1986, as amended.

	 	(h)	 	“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.

	 	(i)	 	“Committee” means the Compensation Committee of the Board.

	 	(j)	 	“Effective Date” means January 1, 2010, which is the effective date of the
Plan.

 

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	 	(k)	 	“Good Reason” means the occurrence of any of the following events, which has
not been consented to in advance by the Participant in writing:

	 	(i)	 	The requirement that the Participant move his personal
residence;

	 	(ii)	 	A reduction of ten percent or more in the Participant’s base
salary, unless
part of an institution-wide reduction and similar to the reduction in the
base salary of all other similarly situated officers of the Company or a
Subsidiary;

	 	(iii)	 	The removal of the Participant from participation in any
incentive compensation (including, but not limited to, the Plan) or
performance-based compensation plans or bonus plans unless the Company
terminates participation in the plan or plans with respect to all other
similarly situated officers of the Company or a Subsidiary;

	 	(iv)	 	The assignment to the Participant of duties and
responsibilities materially different from those normally associated with his
position; or

	 	(v)	 	A material diminution or reduction in the Participant’s
responsibilities or authority (including reporting responsibilities) in
connection with his employment with the Company or a Subsidiary.

	 	(l)	 	“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.

	 	(m)	 	“Participant” means an individual who is employed by the Company and who is
designated as a Participant by the Committee.

	 	(n)	 	“Performance Goals” means the financial performance levels with respect to the
Company and/or the Subsidiaries which must be met before an Award may be earned as set
forth in a Notice of Award. The Performance Goals will be determined 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.

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

	 	(p)	 	“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 2010
Short-Term Incentive Compensation Plan.

	 	(q)	 	“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.

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.

 

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ARTICLE III

Awards

3.1 Determination of Awards. The Committee shall determine (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 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 the 2010 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.

3.4 Components of Calculation. 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
target Award Rate and the threshold Award Rate and between the target Award Rate and
the maximum Award Rate, and rounding to the nearest dollar.

 

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3.5 Earning of Awards.

	 	(a)	 	An Award will be treated as earned to the extent:

	 	(i)	 	the threshold, target or maximum Performance Goals are met; and

	 	(ii)	 	the Participant is employed on the last day of the performance
period.

	 	(b)	 	In the event a Participant terminates employment before the end of the
performance period, he will not earn any portion of his Award unless he terminates
employment with the Company or a Subsidiary for one of the following reasons:

	 	(i)	 	The Participant dies.

	 
	 	(ii)	 	The Participant’s incurs a Permanent and Total Disability.

	 
	 	(iii)	 	The Participant terminates employment on or after attaining age 65.

	 
	 	(iv)	 	The Participant terminates employment for Good Reason.

	 
	 	(v)	 	The Participant is terminated without Cause.

If at least the threshold Performance Goals are met but the Participant terminates employment due
to one or more of the circumstances described in subsections 3.5(b)(i) through 3.5(b)(v), he will
earn a pro rata portion of the Award that he would otherwise be entitled to for the 2010 calendar
year. The Award will be calculated at the level attained based on the ratio that the number of
days during the 2010 calendar year in which he was actually employed bears to 365.

3.6 Time and Form of Payment of Earned Awards.

	 	(a)	 	Earned Awards will be paid in single sum in cash within 75 days after December
31, 2010. If a Participant is not employed by the Company or a Subsidiary on the date
payment is made, he will forfeit his Award.

	 	(b)	 	Notwithstanding subsection 3.6(a), in the event:

	 	(i)	 	The Participant dies;

	 
	 	(ii)	 	The Participant incurs a Permanent and Total Disability;

	 
	 	(iii)	 	The Participant terminates employment on or after attaining age 65;

	 
	 	(iv)	 	The Participant terminates employment for Good Reason; or

	 
	 	(v)	 	The Participant’s employment is terminated without Cause,

	 	 	 	he will not forfeit his earned Award. In such cases, a Participant will be 100
percent vested in his earned Award and payment will made within 30 days of the
termination of employment.

	 	(c)	 	In the event of a Change in Control, a Participant will be 100 percent vested
in his earned Award and payment will be made as of the date of the Change in Control.

 

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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 which would 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.

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 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 an 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.

 

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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.

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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