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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”), entered into on the 26th day of July, 2022, and effective as of the 1st day of July, 2022 (the “Effective Date”), by and between First Financial Bank, N.A. (the “Bank”), a national banking association organized under the laws of the United States of America, First Financial Corporation (the “Corporation”), a corporation formed under the laws of the State of Indiana and a financial holding company (jointly referred to herein as the “Company”) and Norman L. Lowery (the “Employee”), a resident of the State of Indiana.
WHEREAS, the Employee has heretofore been employed by the Bank as its President and Chief Executive Officer and by the Corporation as its President and Chief Executive Officer and has performed valuable services for both the Bank and the Corporation; and
WHEREAS, the Company desires to enter into this Agreement with the Employee in order to assure continuity of management and to reinforce and encourage the continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the parties desire, by this writing, to set forth the continuing employment relationship between the Company and the Employee.
NOW, THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Employee and the Company agree as follows:
1.Employment.  The Employee is employed as the President and Chief Executive Officer of the Bank and as the President and Chief Executive Officer of the Corporation.  The Employee shall render such administrative and management services for the Company as are currently rendered and as are currently performed by persons situated in a similar executive capacity.  The Employee shall also promote, by entertainment or otherwise, as and to the extent permitted by law, the business of the Company.  The Employee’s other duties shall be such as the boards of directors of the Bank or the Corporation may, from time to time, reasonably direct, including normal duties as an officer of the Bank and the Corporation.  During the term of this Agreement, the Employee shall be nominated and elected to serve as a director of the Bank or of any successor to the Bank and shall be nominated to serve as a director of the Corporation.
2.Base Compensation.  The Company agrees to pay the Employee during the term of this Agreement a base salary at the rate of $739,261.74 per annum, payable in cash not less frequently than monthly.  Such base salary shall be effective and calculated commencing as of January 1, 2022.  The Company may consider and declare from time to time increases in the base salary it pays the Employee.  Prior to a Change in Control (as hereinafter defined), the Company may also declare decreases in the base salary it pays the Employee if the operating results of the Company are significantly less favorable than those for the fiscal year ending December 31, 2021, and the Company makes similar decreases in the base salary it pays to other senior 
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management employees of the Company.  After a Change in Control, the Company shall consider and declare salary increases in base salary based upon the following standards:
(a)Inflation;
(b)Adjustments to the base salaries of other senior management personnel;
(c)Past performance of the Employee; and
(d)The contribution which the Employee makes to the business and profits of the Company during the term of this Agreement.
3.Short-Term and Long-Term Incentive Compensation.  During the term of this Agreement, the Employee shall participate in (a) the short-term incentive (annual bonus) plan generally applicable to the Bank’s or Corporation’s senior management employees, with a target annual bonus of not less than 46.4% of base salary, and (b) the long-term incentive equity plan generally applicable to the Bank’s or Corporation’s senior management employees with a target annual grant value of not less than 60% of base salary.  The Employee shall further participate in an equitable manner with all other senior management employees of the Company in any discretionary bonuses that the Company may award from time to time to senior management employees.  No other compensation provided for in this Agreement shall be deemed a substitute for the Employee’s right to participate in such discretionary bonuses.
4.Benefits.
(a)Participation in Retirement, Medical and Other Benefit Plans.  During the term of this Agreement, the Employee shall be eligible to participate in the following benefit plans; group hospitalization, disability, health, dental, sick leave, retirement, supplemental retirement, pension, 401(k), employee stock ownership plan, and all other present or future qualified and/or nonqualified plans provided by the Company generally, or to senior management employees of the Bank or the Corporation, which benefits, taken as a whole, must be at least as favorable as those in effect on the Effective Date, unless the continued operation of such plans or changes in the accounting, legal or tax treatment of such plans would adversely affect the Company’s operating results or financial condition in a material way, and the Company concludes that modifications to such plans are necessary to avoid such adverse effects and such modifications apply consistently to all employees participating in the affected plans.  In addition, the Employee shall be eligible to participate in any fringe benefits which are or may become available to the Company’s senior management employees, including, for example, any insurance programs (including, but not limited to, any group and executive life insurance programs), and any other benefits which are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement.
In addition, at the Company’s expense, the Employee shall be entitled to a life insurance policy insuring his life in the maximum amount established by the Company’s group life insurance plan from time to time (which amount shall be no less than three times his annual salary subject to a $350,000.00 maximum).  Alternatively and in place of the policy of life 
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insurance insuring his life only, the Employee may, in his sole and absolute discretion, obtain a joint life policy insuring the lives of the Employee and his spouse in such amount of life insurance as may be obtained at the same cost to the Company as a life insurance policy insuring the Employee’s life only (such life insurance policy, whether insuring the life of the Employee only or the life of the Employee and his spouse, hereinafter referred to as the “First Policy”).  During and subsequent to the term of this Agreement the Company shall pay all premiums on the First Policy which are required to keep the First Policy in full force and effect until the premiums on the First Policy are fully paid and no additional premium is due or until the death benefit of the First Policy is paid and received by the beneficiary or beneficiaries of the First Policy (hereinafter “First Policy Premium Payments”).  Alternatively, the Company shall pay or reimburse the First Policy Premium Payments to the Employee or the Trustee of an irrevocable life insurance trust established for such purpose.  The Employee shall also be entitled to an additional life insurance policy at the Company’s expense, insuring his life in an amount established by the Company’s life insurance program for senior management employees.  Alternatively and in place of this policy of life insurance insuring his life only, the Employee may, in his sole and absolute discretion, obtain a joint life insurance policy insuring the lives of the Employee and his spouse in such amount of life insurance as may be obtained at the same cost to the Company as a life insurance policy insuring the Employee’s life only (such life insurance policy, whether insuring the life of the Employee only or the life of the Employee and his spouse, hereinafter referred to as the “Second Policy”).  During and subsequent to the term of this Agreement, the Company shall pay all premiums on the Second Policy which are required to keep the Second Policy in full force and effect until the premiums on the Second Policy are fully paid and no additional premium is due or until the death benefit of the Second Policy is paid and received by the beneficiary or beneficiaries of the Second Policy (hereinafter “Second Policy Premium Payments”).  Alternatively, the Company shall pay or reimburse the Second Policy Premium Payments to the Employee or the Trustee of an irrevocable life insurance trust established for such purpose.
All the employee benefits referenced in this subsection 4(a) are collectively referred to hereinafter as “Employee Benefits.” 
(b)Benefits After Retirement or Separation from Service.  The Employee and his spouse are both currently eligible for Medicare coverage.  Upon his retirement or Separation from Service for any other reason, during and after the term of this Agreement, the Company agrees to pay or reimburse the Employee or his Spouse for full supplemental Medicare coverage, at no cost to the Employee or his spouse, at the best level of coverage available which shall include prescription drug coverage for both the Employee and his spouse, until the death of the Employee and his spouse.  In addition, the Company shall continue to pay all premiums on the First Policy and the Second Policy, during and after the term of this Agreement, as provided in paragraph 4(a) above.
(c)Expenses and Membership.  The Employee shall be reimbursed for all reasonable out-of-pocket business expenses which he shall incur in connection with his services under this Agreement, upon substantiation of such expenses in accordance with the policies of the Company.  In addition, the Employee shall be reimbursed for all reasonable out-of-pocket 
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expenses incurred by him to satisfy his continuing legal education requirements for his license to practice law in the State of Indiana.  So long as the Employee is employed by the Company pursuant to this Agreement, the Employee shall be entitled to continue his memberships in the American, Indiana and Terre Haute Bar Associations, the American Association for Justice, the Indiana Trial Lawyers Association, and the Country Club of Terre Haute, and the Company shall continue to pay or reimburse the Employee for the dues and assessments for such memberships.
(d)Automobile.  So long as the Employee is employed by the Company pursuant to this Agreement, the Employee shall be entitled to continue to use a Company-owned automobile of commensurate quality and value as that used by him on the same terms and conditions in effect with respect to such use on the Effective Date of this Agreement.  The Company shall provide and pay the premiums for full insurance coverage on the automobile.  Such insurance coverage shall be no less than the coverage provided on the Effective Date of this Agreement.  The Company shall also pay for the cost of operation, maintenance, and repair of the automobile.  All benefits referenced in this subsection 4(d) are collectively referred to hereinafter as “Automobile Benefits.”
(e)Vacation, Sick Leave and Disability.  The Employee shall be entitled to thirty (30) days’ vacation annually and shall be entitled to the same sick leave and disability leave as other senior management employees.  The Employee shall not receive any additional compensation on account of his failure to take a vacation or sick leave, and the Employee shall not accumulate unused vacation or sick leave from one fiscal year to the next, except in either case to the extent authorized by the Company or permitted for other senior management employees.
In addition to the aforesaid paid vacations, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment with the Company for such additional periods of time and for such valid and legitimate reasons as the Company may determine and to attend the continuing legal education seminars contemplated by subsection 4(c) hereof.  Further, the Company may grant to the Employee a leave or leaves of absence, with or without pay, at such time or times and upon such terms and conditions as the board of directors of the Bank or the Corporation in its discretion may determine.
(f)Other Policies.  All other matters relating to the employment of the Employee not specifically addressed in this Agreement shall be subject to the general policies regarding senior management employees of the Company as in effect from time to time.
5.Term of Employment.  The Company hereby employs the Employee, and the Employee hereby accepts such employment under the terms of this Agreement, for the period commencing on the Effective Date and ending twenty-four (24) months thereafter (or such earlier date as is determined in accordance with Section 8).  The Employee’s term of employment may be extended for additional one (1) year periods beyond the Agreement’s expiration date if the Compensation Committee of the board of directors of the Corporation so determines in a duly adopted resolution.  The initial term of this Agreement and all extensions thereof are hereinafter referred to individually and collectively as the “Term.”
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6.Covenants.
(a)Loyalty.
(i)During the period of his employment hereunder and except for illnesses, reasonable vacation periods, and reasonable leaves of absence, the Employee shall devote all of his full business time, attention, skill, and efforts to the faithful performance of his duties hereunder; provided, however, from time to time, the Employee may serve on the boards of directors of, and hold any other offices or positions in, companies or organizations, and may perform legal services either directly or as a result of an of counsel or analogous position with a law firm for clients which will not present any conflict of interest with the Bank or the Corporation or any of their subsidiaries or affiliates, unfavorably affect the performance of Employee’s duties pursuant to this Agreement, or will not violate any applicable statute or regulation.  “Full business time” is hereby defined as that amount of time usually devoted to like companies by similarly situated senior management employees.  During the term of his employment under this Agreement, the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Company, or be gainfully employed in any other position or job other than as provided above.
(ii)Nothing contained in this subsection shall be deemed to prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Company, or, solely as a passive or minority investor, in any business.
(b)Nonsolicitation.  The Employee hereby understands and acknowledges that, by virtue of his position with the Company, he will have advantageous familiarity and personal contacts with the Company’s customers, wherever located, and the business, operations and affairs of the Company.  Accordingly, while the Employee is employed by the Company and for a period of one (1) year following the Employee’s Separation from Service, as hereinafter defined, for any reason (whether with or without cause or whether by the Company or the Employee), the Employee shall not, directly or indirectly, or individually or jointly, (i) solicit in any manner, seek to obtain or service, or accept the business of any individual or entity that is a customer of the Company as of the date of Employee’s Separation from Service or that was a customer of the Company during the one (1) year period immediately preceding such Separation from Service for the purpose of providing services in competition with the Business of the Company, as hereinafter defined, (ii) request or advise any customers or suppliers of the Company to terminate, reduce, limit, or change their business or relationship with the Company, or (iii) induce, request or attempt to influence any employee of the Company to terminate his employment with the Company.
For the purposes of this Agreement, “Separation of Service” shall mean the Employee dies, retires or otherwise experiences a “Termination of Employment” with the Company (as defined below).  Provided, however, a Separation from Service does not occur if the Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee retains a right to 
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reemployment with the Company under an applicable statute or by contract.  For purposes of this Agreement, a leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Employee will return to perform services for the Bank or Corporation.  If the period of leave exceeds six (6) months and the Employee does not retain the right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six (6) month period.  Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, where such impairment causes the Employee to be unable to perform the duties of his position of employment or any substantially similar position of employment, a twenty-nine (29) month period of absence may be substituted for such six (6) month period.  The Employee shall incur a “Termination of Employment” for purposes of this Agreement when a termination of employment has occurred under Treasury Regulation 1.409A-1(h)(1)(ii).
For the purposes of this Agreement, the term “Business of the Company” shall mean the banking, loans, and investment and planning services provided by the Company.
For purposes of this Agreement, the term “solicit” means any direct or indirect communication of any kind whatsoever, regardless of by whom initiated, which encourages or requests any person or entity, in any manner, to terminate, reduce, limit or otherwise adversely change their business relationship with the Company.
(c)Noncompetition.  During the period of his employment hereunder, and for a period of one (1) year following Employee’s Separation from Service, the Employee shall not, directly or indirectly:
(i)As owner, officer, director, stockholder, investor, proprietor, organizer or otherwise, engage in a trade or business competitive with the Business of the Company; or
(ii)Offer or provide employment (whether such employment is with the Employee or any other business or enterprise), either on a full-time, part-time, or consulting basis, to any person who then currently is, or who within one (1) year prior to such offer or provision of employment has been, a senior management employee of the Bank or Corporation.  This subsection 6(c)(ii) shall only apply in the event the Employee has a voluntary Separation from Service.
The restrictions contained in this subsection 6(c) shall be limited to the following geographic areas (hereinafter referred to as “Restricted Geographical Area”):
(1)Terre Haute, Indiana; and
(2)The thirty (30) mile radius of Terre Haute, Indiana.
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Nothing contained in this Section 6 shall prevent or restrict the Employee from engaging in the practice of law, including within the Restricted Geographical Area.  In addition, nothing contained in this subsection shall prevent or limit the Employee’s right to invest in the capital stock or other securities of any business dissimilar from that of the Bank or the Corporation, or, solely as a passive or minority investor, in any business.
If the Employee does not comply with the provisions of this Section, the one-year period of non-competition provided herein shall be tolled and deemed not to run during any period(s) of noncompliance, the intention of the parties being to provide one full year of non-competition by the Employee after the termination or expiration of this Agreement.
(d)Nondisclosure.  The term “Confidential Information” as used herein shall mean any and all customer lists, computer hardware, software and related material, trade secrets (as defined in I.C. 24-2-3-2), know-how, skills, knowledge, ideas, knowledge of customer’s commercial requirements, pricing methods, sales and marketing techniques, dealer relationships and agreements, financial information, intellectual property, codes, research, development, research and development programs, processes, documentation, or devices used in or pertaining to the Business of the Company (x) which relate in any way to the Company’s products or processes; or (y) which are discovered, conceived, developed or reduced to practice by the Employee, either alone or with others either during the Term, at the Company’s expense or on the Company’s premises.
(i)During the course of his services hereunder the Employee may become knowledgeable about, or become in possession of, Confidential Information.  If such Confidential Information were to be divulged or become known to any competitor of the Company or to any other person outside the employ of the Company, or if the Employee were to consent to be employed by any competitor of the Company or to engage in competition with the Company, the Company would be irreparably harmed.  In addition, the Employee has or may develop relationships with the Company’s customers which could be used to solicit the business of such customers away from the Company.  The Company and the Employee have entered into this Agreement to guard against such potential harm.
(ii)The Employee shall not, directly or indirectly, use any Confidential Information for any purpose other than the benefit of the Company or communicate, deliver, exhibit, or provide any Confidential Information to any person, firm, partnership, corporation, organization, or entity, except as required in the normal course of the Employee’s service as a consultant or as an employee of the Company.  The covenant contained in this subsection shall be binding upon the Employee during the Term and following the termination of employment until either (1) such Confidential Information becomes obsolete; or (2) such Confidential Information becomes generally known in the Company’s trade or industry by means other than a breach of this covenant.
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(iii)The Employee agrees that all Confidential Information and all records, documents, and materials relating to such Confidential Information shall be, and remain, the sole and exclusive property of the Company.
Nothing in this Section 6, or any other provision of the Agreement, is intended or shall be construed to prohibit Employee from reporting conduct to, providing information to, or participating in any investigation or proceeding brought or conducted by, any federal, state or local governmental agency, or self-regulatory organization.
(e)Remedies.  The Employee agrees that the Company will suffer irreparable damage and injury and will not have an adequate remedy at law in the event of any breach by the Employee of any provision of this Section 6.  Accordingly, in the event the Company seeks, under law or in equity, a temporary restraining order, permanent injunction, or a decree of specific performance of the provisions of this Section 6, no bond or other security shall be required.  The Company shall be entitled to recover from the Employee, reasonable attorneys’ fees and expenses incurred in any action wherein the Company successfully enforces any of the provisions of this Section 6 against the breach or threatened breach of those provisions by the Employee.  The remedies described in this Section 6 are not exclusive and are in addition to all other remedies the Company may have at law, in equity, or otherwise.  No claim or defense the Employee may have against the Company, including a prior breach of this Agreement, shall operate to limit the Company’s ability to enforce the covenants of this Section 6.
(i)The Employee and the Company acknowledge and agree that in the event of the Employee’s termination of employment for any reason whatsoever, the Employee can obtain other engagements or employment of a kind and nature similar to that contemplated herein outside the Restricted Geographical Area and that the issuance of an injunction to enforce the provisions of this Section 6 will not prevent him from earning a livelihood.
(ii)The covenants on the part of the Employee contained in this Section 6 are essential terms and conditions to the Company entering into this Agreement, and shall be construed as independent of any other provision in this Agreement.
(f)Surrender of Records.  Upon the Employee’s Separation from Service for any reason, the Employee shall immediately surrender to the Company any and all computer hardware, software and related materials, records, notes, documents, forms, manuals, photographs, instructions, lists, drawings, blueprints, programs, diagrams or other written or printed material (including any and all copies made at any time whatsoever) in his possession or control which pertain to the Business of the Company including any Confidential Information in the Employee’s personal notes, address books, calendars, rolodexes, personal data assistants, etc.
7.Standards.  The Employee shall perform his duties under this Agreement in accordance with such reasonable standards as the board of directors of the Bank or the board of directors of the Corporation may establish from time to time.  The Company will provide the Employee with 
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the working facilities and staff commensurate with his position or positions and necessary or advisable for him to perform his duties.
8.Separation from Service and Termination Pay.  Subject to Section 10 hereof, the Employee may experience a Separation from Service under the following circumstances:
(a)Death.  The Employee shall experience a Separation from Service upon his death during the Term of this Agreement, in which event the Employee’s estate or designated beneficiaries shall be entitled to receive the base salary, bonuses, vested rights, and Employee Benefits, as well as any amounts described in subsections 4(c) and 4(d), due the Employee through the last day of the calendar month in which his death occurred.  Any benefits payable under insurance, health, retirement, bonus, incentive, performance or other plans as a result of the Employee’s participation in such plans through such date shall be paid when and as due under such plans.  The Employee’s spouse and child living in his household at the time of his death shall be entitled to receive the health and life insurance benefits provided for under subsection 4(b), as described in that subsection.
(b)Disability.
(i)The Company may terminate the Employee’s employment, resulting in a Separation from Service, as a result of the Employee’s Disability, in a manner consistent with the Company’s and the Employee’s rights and obligations under the Americans with Disabilities Act of 1990, as amended, or other applicable state and federal laws concerning disability.  For the purpose of this Agreement, “Disability” means the Employee is:
(1)Unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or
(2)By reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.
(ii)During any period that the Employee shall receive disability benefits and to the extent that the Employee shall be physically and mentally able to do so, he shall furnish such information, assistance, and documents so as to assist in the continued ongoing business of the Company.
(iii)In the event of the Employee’s Separation from Service due to Disability, the Employee shall be entitled to receive (1) the base salary, bonuses, and Employee Benefits due the Employee through the date of his Separation from Service, (2) any benefits payable under insurance, health, retirement, bonus, incentive, performance 
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or other plans as a result of the Employee’s participation in such plans, as well as any amounts due under subsections 4(c) and 4(d), through the date of his Separation from Service, which shall be paid when and as due under those plans and subsections 4(c) and 4(d), and (3) the health and life insurance benefits provided for under subsections 4(a) and 4(b), as described in those subsections.  The payments and benefits described in clauses (1), (2) and (3) are hereinafter referred to as the “Accrued Benefits.”
(c)Just Cause.  The Company may, by written notice to the Employee, immediately terminate his employment at any time, resulting in a Separation from Service, for Just Cause.  The Employee shall have no right to receive any base salary, bonuses, or other Employee Benefits or amounts due under subsections 4(c) and 4(d), except as provided by law, whatsoever, for any period after his Separation from Service for Just Cause.  However, the vested rights of the Employee as of his Separation from Service, including the health and life insurance benefits provided for under subsections 4(a) and 4(b), as described in those subsections, shall not be affected.  Any benefits payable under insurance, health, retirement, bonus, incentive, performance, or other plans as a result of the Employee’s participation in such plans or any amounts due under subsections 4(c) and 4(d) through such date of Separation from Service shall be paid when and as due under those plans or subsections 4(c) and 4(d).  Separation from Service for “Just Cause” shall mean Separation from Service because of:
(i)An intentional act of fraud, embezzlement, theft, personal dishonesty, willful misconduct, or breach of fiduciary duty involving personal profit by the Employee in the course of his employment or director service.  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;
(ii)Intentional wrongful damage by the Employee to the business or property of the Company, causing material harm to the Company;
(iii)Breach by the Employee of any confidentiality or non-disclosure agreement in effect from time to time with the Company;
(iv)Gross negligence or insubordination by the Employee in the performance of his duties; or
(v)Removal or permanent prohibition of the Employee from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(iv) or 8(g)(i) of the Federal Deposit Insurance Act, 12 USC 1818(e)(4) and (g)(1).
Notwithstanding the foregoing, in the event of Separation from Service for Just Cause there shall be delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the disinterested directors of the Bank and the Corporation at meetings of the boards called and held for that purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee’s counsel, to be 
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heard before the boards), such meetings and the opportunity to be heard to be held prior to, or as soon as reasonably practicable following Separation from Service, but in no event later than sixty (60) days following such Separation from Service, finding that in the good faith opinion of the boards the Employee was guilty of conduct constituting Just Cause and specifying the particulars thereof in detail.  If, following such meetings, the Employee is reinstated, he shall be entitled to receive the base salary, bonuses, all Employee Benefits, and all other fringe benefits provided for under this Agreement, including but not limited to, the benefits described in subsections 4(a), (b), (c), (d) and (e), for the period following Separation from Service and continuing through reinstatement as though he never experienced a Separation from Service.
(d)Without Just Cause.  The Company may, by written notice to the Employee, immediately terminate his employment at any time, resulting in a Separation from Service (the date of such Separation from Service referred to hereafter as the “Separation Date”), for a reason other than Just Cause, in which event the Employee shall be entitled to receive the Accrued Benefits.  Employee shall also be entitled to receive the following compensation and benefits (unless such Separation from Service occurs within the time period set forth in subsection 10(a) hereof, in which event the benefits and compensation provided for in Section 10 shall apply):
(i)The base salary in effect under Section 2 hereof, from the Separation Date through the expiration date of the Term as determined pursuant to Section 5 hereof (including a renewal or extension thereof then in effect) (such period the “Severance Period”);
(ii)An amount equal to (1) 1/12th of the Employee’s target annual bonus under Section 3 hereof for the year in which the Separation Date occurs, multiplied by (2) the number of months (including any partial month) in the Severance Period;
(iii)An amount equal to (1) 1/12th of the aggregate amount paid or reimbursed to Employee by the Company for the professional and club dues and cost of continuing legal requirements (as described in Section 4(c)) and the Automobile Benefits during the twelve (12) month period ending on the last day of the month immediately preceding the Separation Date (such aggregate amount the “Annual Benefit Amount”), multiplied by (2) the number of months (including any partial month) in the Severance Period; and
(iv)An amount necessary to provide any cash payments described in clause (iii) above net of all income and payroll taxes that would not have been payable by Employee if the Employee had received the fringe benefits and Automobile Benefits described in clause (iii) instead of the cash payment.
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 8(d) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsection 8(d) exceeds any limitation on severance benefits 
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that is imposed by the Office of the Comptroller of the Currency (the “OCC”) on such benefits.
All amounts payable to the Employee under subsections 8(d)(i) through 8(d)(iv) shall be paid in one lump sum within ten (10) days of such Separation from Service.
(e)Voluntary for Good Reason.  The Employee may voluntarily Separate from Service under this Agreement for Good Reason.  In order for Employee to Separate from Service for Good Reason, the Employee shall first deliver to the Company a written notice which will (x) indicate the specific provisions of this Agreement relied upon for such Separation from Service, (y) set forth in reasonable detail the facts and circumstances claimed to provide a basis for such Separation from Service, and (z) describe the steps, actions, events or other items that must be taken, completed, or followed by the Company to correct or cure the basis for such Separation from Service.  The Company will then have thirty (30) days following receipt of such notice to fully correct and cure the basis for the Separation from Service.  If the Company does not fully correct and cure the basis for the Employee’s Separation from Service within such thirty (30) day period, then the Employee will have the right to Separate from Service with the Company for Good Reason immediately upon delivering to the Company a written Notice of Termination and without any further cure period (the date of such Separation from Service, the “Separation Date”).  Notwithstanding the foregoing, the Company will be entitled to so correct and cure only a maximum of two times during any calendar year.  Upon such Separation from Service, Employee shall thereupon be entitled to receive the same amount payable under subsections 8(d)(i), (ii), (iii), and (iv) hereof as if such Separation from Service was by the Company without Just Cause.
For purposes of this Agreement, “Good Reason” means the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing (unless such voluntary Separation from Service occurs within the time period set forth in subsection 10(b) hereof, in which event the benefits and compensation provided for in Section 10 shall apply):
(i)    The requirement that the Employee perform his executive functions more than fifty (50) miles from his Terre Haute, Indiana office;
(ii)    A reduction of ten percent or more in the Employee’s base salary, unless part of an institution-wide reduction and similar to the reduction in the base salary of all other senior management employees of the Company;
(iii)    The removal of the Employee from participation in any incentive compensation or performance-based compensation plans or bonus plans unless the Company terminates participation in the plan or plans with respect to all other senior management employees of the Company;
(iv)    A material failure by the Company to continue to provide the Employee with the base salary, bonuses or the benefits provided for under subsections 
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4(a), (c), (d) and (e) of this Agreement, as the same may be increased from time to time, or with benefits substantially similar to those provided to him under those Sections or under any benefit plan or program in which the Employee now or hereafter becomes eligible to participate, or the taking of any action by the Company which would directly or indirectly reduce in a material manner any such benefits or deprive the Employee to a material degree of any such benefit enjoyed by him, unless part of an institution-wide reduction and applied similarly to all other senior management employees of the Company:
(v)    The assignment to the Employee of duties and responsibilities materially different from those normally associated with his position as referenced in Section 1;
(vi)    A failure to elect or re-elect the Employee to the Bank’s board of directors or a failure on the part of the Corporation to honor its obligation to nominate Employee to serve on the Corporation’s board of directors; or
(vii)    A material diminution or reduction in the Employee’s responsibilities or authority (including reporting responsibilities) in connection with his employment with the Company.
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under this subsection shall be reduced to the extent that on the date of the Employee’s Separation from Service, the present value of the benefits payable under subsections 8(d)(i), (ii), (iii), and (iv) exceed any limitation on severance benefits that is imposed by the OCC on such benefits.
(f)Voluntary Separation from Service.  Subject to subsection Section 10, the Employee may voluntarily Separate from Service with the Company during the Term of this Agreement, upon at least sixty (60) days’ prior written notice to the Company, in which case, effective as of the Separation from Service, the Employee shall receive the Accrued Benefits (unless such Separation from Service occurs pursuant to subsection 10(b) hereof, in which event the benefits, bonuses and base salary provided for in subsection 10(a) shall apply).
(g)Termination or Suspension Under Federal Law.
(i)If the Employee is removed and/or permanently prohibited from participating in the conduct of the Company’s affairs by an order issued under Sections 8(e)(iv) or 8(g)(i) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Company under this Agreement shall terminate, as of the effective date of the order, but vested rights of the Employee shall not be affected.  If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default; but the vested rights of the Employee shall not be affected.
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(ii)All obligations under this Agreement shall terminate, except to the extent it is determined that the continuation of this Agreement is necessary for the continued operation of the Bank; (A) by the OCC or its designee, at the time that the Federal Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of FDIA; or (B) by the OCC, or its designee, at the time that the OCC or its designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the OCC to be in an unsafe or unsound condition.  Such action shall not affect any vested rights of the Employee.
(iii)If a notice served under Section 8(e)(3) or (g)(1) of the FDIA suspends and/or temporarily prohibits the Employee from participating in the conduct of the Bank’s affairs, the Bank’s obligations under this Agreement shall be suspended as of the date of such service, unless stayed by appropriate proceedings.  However, the vested rights of the Employee as of the date of suspension will not be affected.  If the charges in the notice are dismissed, the Bank may in its discretion (1) pay the Employee all or part of the compensation withheld while its contract obligations were suspended, and (2) reinstate (in whole or in part) any of its obligations which were suspended.
9.No Mitigation.  The Employee shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Employee in any subsequent employment.
10.Change in Control.
(a)Change in Control; Involuntary Separation from Service.
(i)Notwithstanding any provision herein to the contrary, if the Employee’s employment under this Agreement is terminated by the Company, resulting in a Separation from Service, without the Employee’s prior written consent and for a reason other than Just Cause in connection with or within twelve (12) months after a Change in Control, as defined in subsection 10(a)(ii), then, Employee shall be entitled to receive the Accrued Benefits and the Employee shall also be entitled to receive (subject to subsection 10(a)(ii)) the greater of:
(1)The total amount payable under subsection 8(d); or
(2)The product of 2.99 times the sum of:  (A) his base salary in effect under Section 2 as of the date of the Change in Control; (B) an amount equal to his target annual bonus as in effect for the calendar year prior to, or if greater, the year in which the Change in Control occurs; and (C) the Annual Benefit Amount described in Section 8(d)(iii).  The Employee shall also be entitled to receive an amount necessary to provide any cash payment received under this subsection 10(a)(i)(2)(C) net of all income and payroll taxes that would not have been 
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payable by the Employee had Employee continued to receive the underlying fringe benefits and Automobile Benefits instead of receiving such cash payment.
The amount payable to the Employee under subsections 10(a)(i)(1) or (2) above shall be paid in one lump sum within ten (10) days of such Separation from Service.
(ii)“Change in Control” shall be deemed to have occurred if one of the following events takes place:
(1)Change in Ownership.  A change in the ownership of the Bank or the Corporation occurs on the date that any person, or group of persons, as defined below, acquires ownership of stock of the Bank or the Corporation that, together with stock held by the person or group, constitutes more than fifty (50) percent of the total fair market value or total voting power of the stock of the Bank or the Corporation.  However, if any person or group is considered to own more than fifty (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 Bank or the Corporation (or to cause a change in the effective control of the Bank or the Corporation as defined in subsection 10(a)(ii)(2)).  An increase in the percentage of stock owned by any person or group, as a result of a transaction in which the Bank or the Corporation acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection.  This subsection only applies when there is a transfer of stock of the Bank or the Corporation (or issuance of stock of a corporation) and stock in the Bank or the Corporation remains outstanding after the transaction.
For purposes of subsections 10(a)(ii)(1) and (2), persons will not be considered to be acting as a group solely because they purchase or own stock of the Bank or the Corporation 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 Bank or the Corporation.  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.
(2)Change in the Effective Control.  A change in the effective control of the Bank or the Corporation will occur when:  (A) any person or group (as provided for in subsection 10(a)(ii)(1)) acquires, or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person(s), ownership of stock of the Bank or the Corporation possessing 
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thirty (30) percent or more of the total voting power; or (B) a majority of members of the board of the Bank or the Corporation is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the Bank’s or Corporation’s board prior to the date of the appointment or election.  However, if any person or group is considered to effectively control the Bank or Corporation, the acquisition of additional control of the Bank or Corporation by the same person(s) is not considered to cause a change in the effective control.
(3)Change in the Ownership of a Substantial Portion of the Bank’s or Corporation’s Assets.  A change in the ownership of a substantial portion of the Bank’s or Corporation’s assets occurs on the date that any person or group acquires, or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person(s), assets from the Bank or Corporation that have a total gross fair market value equal to or more than forty (40) percent of the total gross fair market value of all of the assets of the Bank or Corporation immediately prior to such acquisition(s).  Gross fair market value means the value of the assets of the Bank or Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
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 Bank or Corporation immediately after the transfer.  A transfer of assets by the Bank or Corporation is not treated as a change in the ownership of such assets if the assets are transferred to:  (A) a shareholder of the Bank or Corporation (immediately before the asset transfer) in exchange for or with respect to its stock; (B) an entity, fifty (50) percent or more of the total value or voting power of which is owned, directly or indirectly, by the Bank or Corporation; (C) a person, or group of persons, that owns, directly or indirectly, fifty (50) percent or more of the total value or voting power of all the outstanding stock of the Bank or Corporation, or (D) an entity, at least fifty (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, except as otherwise provided, a person’s status is determined immediately after the transfer of the assets.  For example, a transfer to a company in which the Bank or Corporation has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Bank or Corporation after the transaction, is not treated as a change in the ownership of the assets of the transferor Bank or Corporation.
For purposes of this subsection 10(a)(ii)(3), persons will not be considered to be acting as a group solely because they purchase assets of the Bank or Corporation 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 Bank or Corporation.  If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of 
16

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 Bank or Corporation stock by any retirement plan sponsored by the Bank or an affiliate of the Bank will not constitute a Change in Control.  Additionally, notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(a)(i) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(a)(i) exceeds any limitation on severance benefits that is imposed by the OCC.
(b)Change in Control; Voluntary for Good Reason.  Notwithstanding any other provision of this Agreement to the contrary, the Employee may Separate from Service under this Agreement for Good Reason within twelve (12) months following a Change in Control of the Bank or Corporation, as defined in subsection 10(a)(ii).  In order for Employee to Separate from Service for Good Reason within twelve (12) months following a Change in Control of the Bank or Corporation, the Employee will first deliver to the Company a written notice which will (x) indicate the specific provisions of this Agreement relied upon for such Separation from Service, (y) set forth in reasonable detail the facts and circumstances claimed to provide a basis for such Separation from Service, and (z) describe the steps, actions, events or other items that must be taken, completed, or followed by the Company to correct or cure the basis for such Separation from Service.  The Company will then have thirty (30) days following the effective date of such notice to fully correct and cure the basis for the Separation from Service.  If the Company does not fully correct and cure the basis for the Employee’s Separation from Service within such thirty (30) day period, then the Employee will have the right to Separate from Service with the Company for Good Reason immediately upon delivering to the Company a written Notice of Termination and without any further cure period.  Notwithstanding the foregoing, the Company will be entitled to so correct and cure only a maximum of two times during any calendar year.
The Employee shall thereupon be entitled to receive the lump sum payment described in subsection 10(a)(i) of this Agreement within ten (10) days of such Separation from Service.
For purposes of this subsection 10(b), “Good Reason” means, the occurrence of any of the following events, which has not been consented to in advance by the Employee in writing:
(i)    The requirement that the Employee perform his principal executive functions more than fifty (50) miles from his Terre Haute, Indiana office;
(ii)    A reduction of ten (10) percent or more in the Employee’s base salary as in effect on the date of the Change in Control or as the same may be changed by mutual agreement from time to time, unless part of an institution-wide reduction and 
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similar to the reduction in the base salary of all other senior management employees of the Company;
(iii)    The removal of the Employee from participation in any incentive or performance-based compensation plans or bonus plans unless the Company terminates participation in the plan or plans with respect to all other senior management employees of the Company;
(iv)    A material failure by the Company to continue to provide the Employee with the base salary, bonuses or the benefits provided for under subsections 4(a), (c), (d) and (e) of this Agreement, as the same may be increased from time to time, or with benefits substantially similar to those provided to him under those subsections or under any benefit plan or program in which the Employee now or hereafter becomes eligible to participate, or the taking of any action by the Company which would directly or indirectly reduce in a material manner any such benefits or deprive the Employee to a material degree of any such benefit enjoyed by him, unless part of an institution-wide reduction and applied similarly to all other senior management employees of the Company;
(v)    The assignment to the Employee of duties and responsibilities materially different from those normally associated with his position as referenced in Section 1;
(vi)    A failure to elect or re-elect the Employee to the Bank’s board of directors or a failure on the part of the Corporation or its successor to honor its obligation to nominate Employee to the board of directors of the Corporation or its successor; or
(vii)    A material diminution or reduction in the Employee’s responsibilities or authority (including reporting responsibilities) in connection with his employment with the Company.
Notwithstanding the foregoing, but only to the extent required under federal banking law, the amount payable under subsection 10(b) shall be reduced to the extent that on the date of the Employee’s Separation from Service, the amount payable under subsection 10(b) exceeds any limitation on severance benefits that is imposed by the OCC.
(c)Compliance with 12 U.S.C. Section 1828(k).  Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.
(d)Trust.
(i)    Within five business days before or after a Change in Control which was not approved in advance by a resolution of a majority of the directors of the Corporation, the Company shall, at the Company’s expense, (1) deposit, or cause to be deposited, in a grantor trust (the “Trust”), designed to conform with Revenue Procedure 
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92-64 (or any successor) and having a trustee independent of the Bank, an amount equal to the amounts which would be payable in a lump sum under subsection 10(a)(i) hereof if those payment provisions become applicable, and (2) provide the trustee of the Trust with a written direction to hold said amount and any investment return thereon in a segregated account for the benefit of the Employee, and to follow the procedures set forth in the next paragraph as to the payment of such amounts from the Trust.
(ii)    During the twelve (12) consecutive month period following the date on which the Company makes the deposit referred to in the preceding paragraph, the Employee may provide the trustee of the Trust with a written notice requesting that the trustee pay to the Employee, in a single sum, the amount designated in the notice as being payable pursuant to subsection 10(a)(i).  Within three (3) business days after receiving said notice, the trustee of the Trust shall send a copy of the notice to the Company via overnight and registered mail, return receipt requested.  On the tenth (10th) business day after mailing said notice to the Company, the trustee of the Trust shall pay the Employee the amount designated therein in immediately available funds, unless prior thereto the Company provides the trustee with a written notice directing the trustee to withhold such payment.  In the latter event, the trustee shall submit the dispute, within ten (10) days of receipt of the notice from the Company, to non-appealable binding arbitration for a determination of the amount payable to the Employee pursuant to subsection 10(a)(i), and the party responsible for the payment of the costs of such arbitration (which may include any reasonable legal fees and expenses incurred by the Employee) shall be determined by the arbitrator.  The Company and the Employee shall choose the arbitrator to settle the dispute, and such arbitrator shall be bound by the rules of the American Arbitration Association in making his or her determination.  If the Employee and the Company cannot agree on an arbitrator, then the arbitrator shall be selected under the rules of the American Arbitration Association.  The Employee, the Company and the trustee shall be bound by the results of the arbitration and, within three (3) days of the determination by the arbitrator, the trustee shall pay from the Trust the amounts required to be paid to the Employee and/or the Company, and in no event shall the trustee be liable to either party for making the payments as determined by the arbitrator.
(iii)    Upon the earlier of (1) payment of the entire amount owed to Employee from the Trust to the Employee, or (2) the date twelve (12) months after the date on which the Company makes the deposit referred to in subsection 10(d)(i)(1), the trustee of the Trust shall pay to the Company the entire balance remaining in the segregated account maintained for the benefit of the Employee, if any.  The Employee shall thereafter have no further interest in the Trust pursuant to this Agreement.  However, the termination of the Trust shall not operate as a forfeiture or relinquishment of any of the Employee’s rights under the terms of this Agreement.  Furthermore, in the event of a dispute under subsection 10(d)(ii), the trustee of the Trust shall continue to hold, in trust, the deposit referred to in subsection 10(d)(i)(1) until a final decision is rendered by the arbitrator pursuant to subsection 10(d)(ii).
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(e)In the event that any dispute arises between the Employee and the Company as to the terms or interpretation of this Agreement or the obligations thereunder, including this Section, whether instituted by formal legal proceedings or submitted to arbitration pursuant to subsection 10(d)(ii), including any action that the Employee takes to enforce the terms of this Section or to defend against any action taken by the Company, the Employee shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees, arising from such dispute, proceedings or actions, provided that the Employee shall obtain a final judgment by a court of competent jurisdiction in favor of the Employee or, in the event of arbitration pursuant to subsection 10(d)(ii), a determination is made by the arbitrator that the expenses should be paid by the Company.  Such reimbursement shall be paid within ten (10) days of Employee’s furnishing to the Company written evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Employee.
Should the Employee fail to obtain a final judgment in favor of the Employee and a final judgment or arbitration decision is entered in favor of the Company and if decided by arbitration, the arbitrator, pursuant to subsection 10(d)(ii), determines the Employee to be responsible for the Company’s expenses, then the Company shall be reimbursed for all costs and expenses, including reasonable attorneys’ fees arising from such dispute, proceedings or actions.  Such reimbursement shall be paid within ten (10) days of the Company furnishing to the Employee written evidence, which may be in the form, among other things, of a canceled check or receipt, of any costs or expenses incurred by the Company.
11.Long-Term Incentive Plan Awards.  Any awards to the Employee under the Corporation’s Amended and Restated 2011 Omnibus Equity Incentive Plan (such plan, as may be amended from time to time, and any successor or replacement plan, the “LTIP Plan”) that are outstanding at the time of a Separation from Service will be governed by the terms of the LTIP Plan and the applicable award agreement.
12.Federal Income Tax Withholding.  The Bank may withhold all federal and state income or other taxes from any benefit payable under this Agreement as shall be required pursuant to any law or governmental regulation or ruling.
13.Section 409A.  This Agreement is intended to comply with Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended, or an exemption thereunder and will be construed and administered consistent with this intent.  Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption.  Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary Separation from Service or as a short-term deferral will be excluded from Section 409A to the maximum extent possible.  For purposes of Section 409A, each installment payment provided under this Agreement will be treated as a separate payment.  Any payments to be made under this Agreement upon a termination of employment will only be made upon a “Separation from Service” as defined herein and accordance with Section 409A.  To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Section 409A, such reimbursements and in-kind benefit payments will be made in accordance 
20

with Treasury Regulation Section 1.409A-3(i)(1)(iv).  Notwithstanding anything in this Agreement to the contrary, if any payment or benefit provided to the Employee in connection with a termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and the Employee is determined to be a “specified employee” under Section 409A, then such payment or benefit will not be paid until the first payroll date to occur following the six (6) month anniversary of the Employee’s termination of employment or, if earlier, upon his or her death (the “Specified Employee Payment Date”), except to the extent otherwise permitted due application of an exclusion or exemption from such requirement.  The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date will be paid to the Employee, without interest, in a lump sum on the Specified Employee Payment Date and, thereafter, any remaining payments will be paid without delay in accordance with their original schedule.  Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A, and in no event will the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Employee on account of non-compliance with Section 409A.
14.Section 280G.  Notwithstanding anything contained in this Agreement to the contrary to the extent that any of the payments and benefits provided for under this Agreement together with any payments or benefits under any other agreement or arrangement between the Company and the Employee (collectively, the “Payments”) would (a) constitute “parachute payments” within the meaning of Section 280G of the Code and (b) but for this Section 14 would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then such Payments shall be either:  (i) delivered in full, or (ii) reduced (but not below zero) to the maximum amount that could be paid to the Employee without giving rise to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the Excise Tax (and any equivalent state or local excise taxes), results in the receipt by the Employee, on an after-tax basis, of the greatest amount of the Payments, notwithstanding that all or some portion of such Payments may be subject to the Excise Tax.  Unless the Company and the Employee otherwise agree, any determination required under this Section 14 will be made in writing by independent public accountants (the “Accountants”) chosen by the Company, whose determination will be conclusive and binding (absent manifest error) upon the Employee and the Company for all purposes.  For purposes of making the calculations required by this Section 14, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Employee agree to furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 14.  The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 14.  Any reduction in Payments required by this provision shall occur in the following order (and in a manner compliant with Section 409A of the Code):  (1) reduction of cash payments, beginning with payments scheduled to occur soonest; (2) reduction of vesting 
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acceleration of equity awards (in reverse order of the date of the grant); and (3) reduction of other benefits paid or provided to Employee.
15.Successors and Assigns.
(a)Company.  This Agreement shall not be assignable by the Bank or Corporation, provided that this Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank or Corporation which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets or stock of the Bank or Corporation.
(b)Employee.  Because the Company is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Company; provided, however, that nothing in this paragraph shall preclude (i) the Employee from designating a beneficiary to receive any benefit payable hereunder upon his death, or (ii) the executors, administrators, or other legal representatives of the Employee or his estate from assigning any rights hereunder to the person or persons entitled thereunto.
(c)Attachment.  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 exclusion, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and of no effect.
16.Amendments.  No amendments or additions to this Agreement shall be binding unless made in writing and signed by the Bank, the Corporation, and the Employee, except as herein otherwise specifically provided.
17.Applicable Law.  Except to the extent preempted by federal law, the laws of the State of Indiana, without regard to that State’s choice of law principles, shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance, or otherwise.
18.Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  Should any particular covenant, provision, or clause of this Agreement be held unreasonable or unenforceable for any reason, including without limitation, the time period, geographic area and/or scope of activity covered by such covenant, provision or clause, the Company and Employee acknowledge and agree that such covenant, provision or clause shall be given effect and enforced to whatever extent would be reasonable and enforceable under applicable law.
19.Entire Agreement.  This Agreement:  (a) supersedes all other understandings and agreements, oral or written, between the parties with respect to the subject matter of this Agreement; and (b) constitutes the sole agreement between the parties with respect to this subject 
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matter; provided, however, that the benefit plans and arrangements referred to in this Agreement are not superseded or replaced unless this Agreement specifically so states and such benefit plans and arrangements may be set forth in separate plan documents stating their terms.
20.Construction.  The rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
21.Headings.  The headings in this Agreement have been inserted solely for ease of reference and shall not be considered in the interpretation, construction or enforcement of this Agreement.
22.Notices.  For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been given (a) if hand delivered, upon delivery to the party, or (b) if mailed, two (2) days following deposit of the notice or communication with the United States Postal Service by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:                Norman L. Lowery
93 Allendale
Terre Haute, Indiana 47802

If to the Bank:                    First Financial Bank, N.A.
Attn:  Lead Independent Director
One First Financial Plaza
P.O. Box 540
Terre Haute, Indiana 47808-0540

If to First Financial Corporation:        First Financial Corporation
Attn:  Lead Independent Director
One First Financial Plaza
P.O. Box 540
Terre Haute, Indiana 47808-0540

or to such other address as either party hereto may have furnished to the other party in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
23.Waiver.  The waiver by either party of a breach of any provision of this Agreement, or failure to insist upon strict compliance with the terms of this Agreement, shall not be deemed a waiver of any subsequent breach or relinquishment of any right or power under this Agreement.
24.Review and Consultation.  Employee acknowledges and agrees he (a) has read this Agreement in its entirety prior to executing it, (b) understands the provisions and effects of this Agreement, and (c) has consulted with such attorneys, accountants, and financial or other advisors as he has deemed appropriate in connection with the execution of this Agreement.  
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Employee understands, acknowledges, and agrees that he has not received any advice, counsel, or recommendation with respect to this Agreement from the Company’s attorneys.
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IN WITNESS WHEREOF, the parties have executed this Agreement on this 26th day of July, 2022.

ATTEST                        FIRST FINANCIAL BANK, N.A.

/s/ Steve H. Holliday                            /s/ Rodger A. McHargue                    
Steven H. Holliday, SVP and Chief Credit        Rodger A. McHargue, SVP and Chief                                      Officer                            Financial Officer

ATTEST                        FIRST FINANCIAL CORPORATION            

/s/ Steve H. Holliday                                             /s/ Rodger A. McHargue                       
Steve H. Holliday, SVP and Chief Credit        Rodger A. McHargue, SVP and Chief
Officer                            Financial Officer

EMPLOYEE

                            /s/ Norman L. Lowery                             
                             Norman L. Lowery    

25EX-10.2

  Exhibit 10.2

  VIA EMAIL DELIVERY								                                    

  Celina Mikolajczak

   

  Dear Celina:

  	This letter confirms that your employment with QuantumScape Corporation and QuantumScape Battery Inc. (jointly the “Company”) is being terminated effective June 6, 2022 (the “Separation Date”).  Your final paycheck, which includes payment for all of your accrued, but unused, paid time off, will be deposited directly into your designated bank account on the Separation Date. 

  	Your health insurance benefits will continue until June 30, 2022. Thereafter, you will have the right to continue your health insurance benefits under COBRA. You will be receiving COBRA notices and other relevant forms under separate cover. 

  	In exchange for your execution and non-revocation of the enclosed Separation Agreement and Release (the “Separation Agreement”), the Company has agreed to provide you with the consideration set forth therein. Please review the enclosed Separation Agreement carefully, and feel free to ask any questions or to consult with your own attorney. Should you decide not to sign the Separation Agreement or you timely revoke your execution, you will receive only your final paycheck, and not the severance benefits set forth in the Separation Agreement. If you do sign the Separation Agreement, please return the agreement to me no later than June 8, 2022. 

  	In addition, regardless of whether you sign the Separation Agreement, you are required to continue to abide by the terms of the Company’s At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (the “Confidentiality Agreement”) that you signed. Another copy of this agreement is enclosed with this letter. Please note that nothing in the Confidentiality Agreement limits or prohibits you from engaging in any Protected Activity, as defined in the enclosed, proposed Separation Agreement.

   

         You are required to return all Company property, including, but not limited to, confidential and proprietary information, on the last day of your employment (with the exception of the Company’s employee handbook and personnel records about yourself, which you may keep). 

   

          Thank you for your service to the Company, and we wish you the best of luck in the future. 

   

  Sincerely,

  /s/Michael McCarthy

  Michael McCarthy

  Chief Legal Officer and Head of Corporate 

  Development

                                    

  Enclosures:

  California’s Programs for the Unemployed (Notice and DE 2320) 

  Notice to Employee of Change In Relationship 

  HIPP Notice 

  401(k) Termination Information

  Confidentiality Agreement

  Separation Agreement

   

   

   

  

  SEPARATION AGREEMENT AND RELEASE

   

  This Separation Agreement and Release (“Agreement”) is made by and among Celina Mikolajczak (“Employee”), QuantumScape Corporation and QuantumScape Battery Inc. (jointly the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).

   

  RECITALS

   

  WHEREAS, Employee was employed by the Company;

   

  WHEREAS, Employee signed an offer letter with the Company on May 20, 2021 (the “Offer Letter”);

   

  WHEREAS, Employee signed an At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement with the Company on May 20, 2021 (the “Confidentiality Agreement”); 

   

  WHEREAS, Employee signed a Change in Control and Severance Agreement with the Company on May 20, 2021 (the “CIC Agreement”);

   

  WHEREAS, Employee signed an Indemnification Agreement with the Company on April 12, 2021 (the “Indemnification Agreement”);

  WHEREAS, the Company granted Employee the following equity awards: (i) 6,194 Restricted Stock Units on April 13, 2021 pursuant to Employee’s appointment as a non-employee member of the Company’s board of directors, all of which were unvested and terminated on May 21, 2021 upon Employee’s resignation from the board of directors to subsequently transition to full-time employment with the Company starting July 19, 2021, (ii) 85,251 Restricted Stock Units subject to a Restricted Stock Unit Agreement dated August 5, 2021 (the “Aug 2021 RSU Agreement”), (iii) a non-qualified option to purchase 839,913 shares of Class A Common Stock of the Company subject to a Stock Option Agreement dated December 16, 2021 (the “EPA Option Agreement”), (iv) 61,919 Restricted Stock Units subject to a Restricted Stock Unit Agreement dated February 17, 2022 (the “Feb 2022 RSU Agreement”), and (v) 123,839 Restricted Stock Units subject to a Restricted Stock Unit Agreement dated March 3, 2022 (the “Mar 2022 RSU Agreement”), in each foregoing case subject to the terms and conditions of the Company’s 2020 Equity Incentive Plan (each defined equity agreement and the 2020 Equity Incentive Plan collectively referenced as the “Stock Agreements”);

   

  WHEREAS, Employee separated from employment with the Company effective June 6, 2022 (the “Separation Date”); and

   

  WHEREAS, the Parties wish to resolve any and all present disputes, claims, complaints, grievances, charges, actions, petitions, and demands that each Party may have against the other Party and that Employee may have against the other Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to Employee’s employment with or separation from the Company.

   

  NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

   

  1

   

  

  COVENANTS

   

  1.Consideration.  

   

  a)Payment. The Company agrees to pay Employee a total of Two Hundred and Twenty-Five Thousand Dollars ($225,000), less applicable withholdings at the state and federal supplemental rates, within five (5) business days after the Effective Date (defined below) of this Agreement.  This amount represents the equivalent of six (6) months of Employee’s current base salary.  Employee understands and agrees that Employee is not due any bonus severance under the CIC Agreement.

  b)Scientific Advisory Board. Employee and QuantumScape Battery, Inc. agree to enter concurrently into the Scientific Advisory Board Agreement attached hereto as Exhibit A (the “SAB Agreement”), which shall be effective as of the Separation Date such that there will be no break in services provided by Employee, subject to Section 26 below. By entering into the SAB Agreement, Employee will continue to vest without interruption in the equity award under the Aug 2021 RSU Agreement so long as the SAB Agreement remains in effect and subject to the other terms and conditions set forth therein.

  c)COBRA. The Company shall reimburse Employee following the submission by Employee to the Company of appropriate invoices for COBRA coverage for both Employee and all her eligible dependents for a period of six (6) months beginning July 1, 2022, or until Employee has secured health insurance coverage through another source, whichever occurs first, provided Employee timely elects and pays for such continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to COBRA.

  d)Acknowledgement. Employee acknowledges that without this Agreement, Employee is otherwise not entitled to the consideration listed in this Section 1.

   

  2.Stock.  Notwithstanding the terms of the Stock Agreements, the Parties agree that all further vesting of equity awards under the Stock Agreements, other than the Restricted Stock Units covered under the Aug 2021 RSU Agreement, shall immediately terminate on the Separation Date.  The Restricted Stock Units under the Aug 2021 RSU Agreement shall continue to vest without any interruption for so long as the SAB Agreement remains in effect (and subject to the other terms and conditions therein).  The Parties acknowledge and agree that the Company has the unilateral right under the SAB Agreement to terminate the SAB Agreement in its discretion only after 52 weeks, unless for material breach or failure to perform services before then as set forth therein. Employee understands that the compensation resulting from the vesting and settlement of Restricted Stock Units under the Aug 2021 RSU Agreement will be considered wages, subject to required Company withholding. Employee acknowledges that as of the Separation Date, no portion of any equity awards under any of the Stock Agreements have vested. 

   

  3.Benefits. Employee’s health insurance benefits shall cease on the Separation Date, subject to Employee’s right to continue health insurance under COBRA pursuant to Section 1(c) above. Employee’s participation in all other benefits and incidents of employment, including, but not limited to, further vesting in equity awards, and the further accrual of bonuses, vacation, and paid time off, will cease on the Separation Date; provided, however, that this Agreement does not cause Employee to relinquish any contributions Employee may have made to the Company’s 401(k) plan as of the Separation Date.

   

  4.Payment of Salary and Receipt of Benefits.  Employee acknowledges and represents that, other than the consideration set forth in this Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting of equity awards, and any and all other benefits and compensation due to Employee, and that Employee is not due any severance related to bonus under the CIC Agreement.

   

  2

   

  

  5.Releases of Claims.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its current and former: officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, professional employer organization or co-employer, insurers, trustees, divisions, subsidiaries, predecessor and successor corporations, and assigns (collectively, the “Releasees”). Employee, on Employee’s own behalf and on behalf of Employee’s respective heirs, family members, executors, agents, and assigns, forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the date Employee signs this Agreement, including, without limitations:

   

   

  a)any and all claims relating to or arising from Employee’s employment relationship with the Company or the termination of that relationship; 

  b)any and all claims relating to or arising from Employee’s right to purchase or actual purchase of shares of stock of the Company, or right to further vest in any stock options or restricted stock units of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

  c)any and all claims for wrongful discharge of employment, termination in violation of public policy, discrimination, harassment, retaliation, breach of contract (both express and implied), breach of covenant of good faith and fair dealing (both express and implied), promissory estoppel, negligent or intentional infliction of emotional distress, fraud, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic advantage, unfair business practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of privacy, false imprisonment, conversion, and disability benefits;

  d)any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Equal Pay Act, the Fair Labor Standards Act, the Fair Credit Reporting Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Immigration Reform and Control Act, the National Labor Relations Act, the California Family Rights Act, the California Labor Code, the California Workers’ Compensation Act, and the California Fair Employment and Housing Act;

  e)any and all claims for violation of the federal or any state constitution;

  f)any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

  g)any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

  h)any and all claims for attorneys’ fees and costs.

   

  However, if a Releasee (other than the Company itself) initiates a lawsuit against Employee alleging claims that accrued prior to the Effective Date of this Agreement, then Employee’s release and waiver herein as to that Releasee only would become immediately void and of no effect for the purposes of Employee’s ability to defend herself against such suit or to assert counterclaims against such Releasee.

   

  Further, none of the waivers and releases anywhere in this Agreement shall waive, release and/or limit in any way Employee’s (pre-existing only) rights to indemnification, duty to defend and to be held harmless by the Company and/or the Releasees from any source (e.g., common or statutory law, contract (e.g., the Indemnification Agreement), or other written commitment or insurance policy).   

   

  3

   

  

  The Company hereby and forever releases Employee, from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that the Company may possess against Employee arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement.

   

  The Parties agree that the releases set forth in this Section shall be and remain in effect in all respects as complete general releases as to the matters released. These releases do not extend to any obligations incurred under this Agreement. These releases do not release claims that cannot be released as a matter of law. Any and all disputed wage claims that are released herein shall be subject to binding arbitration in accordance with this Agreement, except as required by applicable law. These releases do not extend to any right Employee may have to unemployment compensation benefits.

   

  6.Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that Employee is waiving and releasing any rights Employee may have under the Age Discrimination in Employment Act of 1967 ("ADEA"), and that this waiver and release is knowing and voluntary. Employee agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the date Employee signs this Agreement. Employee acknowledges that a material part of the consideration provided to Employee in this Agreement is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that Employee has been advised by this writing that: (a) Employee should consult with an attorney prior to executing this Agreement; (b) Employee has twenty-one (21) days within which to consider this Agreement; (c) Employee has seven (7) days following Employee’s execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that Employee has knowingly and voluntarily chosen to waive the time period allotted for considering this Agreement. Employee acknowledges and understands that revocation must be accomplished by a written notification to the person executing this Agreement on the Company’s behalf that is received prior to the Effective Date. The Parties agree that changes, whether material or immaterial, do not restart the running of the 21-day period.

   

  7.California Civil Code Section 1542.  Each Party acknowledges that she/it has been advised to consult with legal counsel and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

   

  A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

   

  Each Party, being aware of said code section, agrees to expressly waive any rights that Party may have thereunder, as well as under any other statute or common law principles of similar effect.

   

  8.No Pending or Future Lawsuits.  Each Party represents that it has no current lawsuits, claims, or actions pending in that Party’s name, or on behalf of any other person or entity, against the other Party any of the other or as to Employee, against any of the other Releasees. Each Party also represents that she/it does not currently intend to bring any claims on her/its own behalf or on behalf of any other person or entity against the other Party or as to Employee, against any of the other Releasees. 

   

  9.Future Re-Employment.  Employee understands and agrees that, as a condition of this Agreement, Employee shall not apply for any future re-employment with the Company without the Company’s prior written consent, and Employee hereby waives any right, or alleged right, of re-employment with the Company.    

   

  4

   

  

  10.Trade Secrets and Confidential Information/Company Property. Employee acknowledges that, separate from this Agreement, Employee remains under continuing obligations to the Company under the Confidentiality Agreement, including the provisions therein regarding nondisclosure of the Company’s trade secrets and confidential and proprietary information. Employee’s signature below constitutes her representation following her diligent search that Employee has returned all documents and other items provided to Employee by the Company (with the exception of a copy of the Employee Handbook and personnel documents specifically relating to Employee), developed or obtained by Employee in connection with Employee’s employment with the Company, or otherwise belonging to the Company.  However, should Employee later identify any Company property in her inadvertent possession, she will return such property within three (3) business days thereafter.  It is agreed that any such compliance would not constitute a violation of this Agreement.

   

  11.No Cooperation.  Subject to the Protected Activity Not Prohibited Section below, Employee agrees that Employee will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the Releasees, unless under a subpoena or other court order to do so or upon written request from an administrative agency or the legislature or as related directly to the ADEA waiver in this Agreement. Employee agrees both to notify promptly the Company’s signatory below (or covering person) upon receipt of any such subpoena or court order or written request from an administrative agency or the legislature, and to furnish to the Company, within three (3) business days of its receipt, a copy of such subpoena or other court order or written request from an administrative agency or the legislature. If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against any of the Releasees, Employee shall state no more than that Employee cannot provide such counsel or assistance.

   

  12.Protected Activity Not Prohibited.  Employee understands that nothing in this Agreement shall in any way limit or prohibit Employee from engaging in any Protected Activity. Protected Activity includes: (i) filing and/or pursuing a charge, complaint, or report with, or otherwise communicating, cooperating, or participating in any investigation or proceeding that may be conducted by any federal, state or local government, agency or commission, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board (“Government Agencies”); and/or (ii) discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that Employee has reason to believe is unlawful. Employee understands that in connection with such Protected Activity, Employee is permitted to disclose documents or other information as permitted by law, without giving notice to, or receiving authorization from, the Company. Notwithstanding the foregoing, Employee agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any Company trade secrets, proprietary information, or confidential information that does not involve unlawful acts in the workplace or the activity otherwise protected herein.  Employee further understands that Protected Activity does not include the disclosure of any Company attorney-client privileged communications or attorney work product. Any language in the Confidentiality Agreement regarding Employee’s right to engage in Protected Activity that conflicts with, or is contrary to, this Section is superseded by this Agreement. In addition, pursuant to the Defend Trade Secrets Act of 2016, Employee is notified that an individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official (directly or indirectly) or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if (and only if) such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

    

  5

   

  

  13.Non-Disparagement.  Subject to the Protected Activity Not Prohibited Section or as otherwise required by law, Employee agrees to refrain from any significant disparagement, defamation, libel, or slander of the Releasees, and agrees to refrain from any significant tortious interference with the Releasees’ contracts and relationships.  Employee shall direct any inquiries by potential future employers to the Company’s Chief of Human Resource Operations. Except as required by law, the Company agrees to refrain from any significant disparagement, defamation, libel, or slander of Employee, and agrees to refrain from any significant tortious interference with Employee’s contracts and relationships.  The Company’s obligations in this Section shall be limited to the Company’s C-suite level executive officers and the Company’s authorized spokespersons to the outside world as of the Effective Date of this Agreement, and only for so long as they hold those positions within the Company, provided, however, that the Company shall also notify those employees who, as of the Effective Date of this Agreement, regularly attend the Company’s weekly call with the CEO of the obligations in this Section and shall direct them to also fully comply with the Company’s obligations in this Section. For the avoidance of doubt, the Parties agree that internal communications within the Company related to Employee’s employment with the Company for purposes reasonably related to the Company’s management of its operations and business affairs are not prohibited by this Section.

   

  14.Breach.  In addition to the rights provided in the “Attorneys’ Fees” Section below, Employee acknowledges and agrees that any breach of this Agreement (including Exhibit A) by the Employee, unless such breach constitutes a legal action by Employee challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, or of any provision of the Confidentiality Agreement, shall entitle the Company to recover and/or cease providing the consideration provided to the Employee under this Agreement and to obtain damages, except as otherwise provided by law.  

   

  15.No Admission of Liability.  Each Party understands and acknowledges that this Agreement constitutes a compromise and settlement of all claims released herein.   No action taken by either Party hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by either Party of any fault or liability whatsoever to the other Party or to any third party.

   

  16.Costs.  The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

   

  6

   

  

  17.ARBITRATION. EXCEPT AS PROHIBITED BY LAW, THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, EMPLOYEE’S EMPLOYMENT WITH THE COMPANY OR THE TERMS THEREOF, OR ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION UNDER THE FEDERAL ARBITRATION ACT (THE “FAA”) AND THAT THE FAA SHALL GOVERN AND APPLY TO THIS ARBITRATION AGREEMENT WITH FULL FORCE AND EFFECT; HOWEVER, WITHOUT LIMITING ANY PROVISIONS OF THE FAA, A MOTION OR PETITION OR ACTION TO COMPEL ARBITRATION MAY ALSO BE BROUGHT IN STATE COURT UNDER THE PROCEDURAL PROVISIONS OF SUCH STATE’S LAWS RELATING TO MOTIONS OR PETITIONS OR ACTIONS TO COMPEL ARBITRATION. EMPLOYEE AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, EMPLOYEE MAY BRING ANY SUCH ARBITRATION PROCEEDING ONLY IN EMPLOYEE’S INDIVIDUAL CAPACITY. ANY ARBITRATION WILL OCCUR IN SANTA CLARA COUNTY, CALIFORNIA BEFORE JAMS, PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”), EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION. THE ARBITRATION SHALL BE BEFORE A SINGLE ARBITRATOR WHO SHALL BE A FORMER FEDERAL OR STATE COURT JUDGE. THE PARTIES AGREE THAT THE ARBITRATOR SHALL HAVE THE POWER TO DECIDE ANY MOTIONS BROUGHT BY ANY PARTY TO THE ARBITRATION, INCLUDING MOTIONS FOR SUMMARY JUDGMENT AND/OR ADJUDICATION, AND MOTIONS TO DISMISS AND DEMURRERS, APPLYING THE STANDARDS SET FORTH UNDER THE CALIFORNIA CODE OF CIVIL PROCEDURE. THE PARTIES AGREE that the arbitrator shall issue a written decision on the merits. THE PARTIES ALSO AGREE THAT THE ARBITRATOR SHALL HAVE THE POWER TO AWARD ANY REMEDIES AVAILABLE UNDER APPLICABLE LAW, AND THAT THE ARBITRATOR MAY AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, WHERE PERMITTED BY APPLICABLE LAW. THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE. SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS SECTION CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, INCLUDING, BUT NOT LIMITED TO THE ARBITRATION SECTION OF THE CONFIDENTIALITY AGREEMENT, THE PARTIES AGREE THAT THIS ARBITRATION AGREEMENT IN THIS SECTION SHALL GOVERN.

   

  18.Tax Consequences.  Except as set forth in this Agreement, the Company makes no other representations or warranties with respect to the tax consequences of the payments and any other consideration provided to Employee or made on Employee’s behalf under the terms of this Agreement. Employee agrees and understands that Employee is responsible for payment, if any, of local, state, and/or federal taxes owed by her on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon. Employee further agrees to indemnify and hold the Releasees harmless from any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of (a) Employee’s actual failure to pay or delayed payment of federal or state taxes due exclusively from her, or (b) damages sustained by the Company by reason of any such claims  including attorneys’ fees and costs. The Parties agree and acknowledge that the payments made pursuant to Section 1 of this Agreement are not related to sexual harassment or sexual abuse and not intended to fall within the scope of 26 U.S.C. Section 162(q). 

   

  19.Section 409A.  It is intended that this Agreement comply with, or be exempt from, Code Section 409A and the final regulations and official guidance thereunder (“Section 409A”) and any ambiguities herein will be interpreted to so comply and/or be exempt from Section 409A. Each payment and benefit to be paid or provided under this Agreement is intended to constitute a series of separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. 

  7

   

  

  . The Company and Employee will work together in good faith to consider either (i) amendments to this Agreement; or (ii) revisions to this Agreement with respect to the payment of any awards, which are necessary or appropriate to avoid imposition of any additional tax or income recognition prior to the actual payment to Employee under Section 409A. In no event will the Releasees reimburse Employee for any taxes that may be imposed on Employee as a result of Section 409A.

   

  20.Authority.  The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants that Employee has the capacity to act on Employee’s own behalf and on behalf of all who might claim through Employee to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

   

  21.Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

   

  22.Attorneys’ Fees.  Except with regard to a legal action challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing Party shall recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action from the other Party.

   

  23.Entire Agreement.  This Agreement (including Exhibit A hereto) represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee’s employment with and separation from the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Employee’s relationship with the Company, with the exception of the Confidentiality Agreement, Indemnification Agreement and the Stock Agreements, as modified or superseded herein. 

   

  24.No Oral Modification.  This Agreement may only be amended in a writing signed by Employee and the Company’s Chief Executive Officer or written designee for such.

   

  25.Governing Law.  This Agreement shall be governed by the laws of the State of California, without regard for choice-of-law provisions, except that any dispute regarding the enforceability of the arbitration section of this Agreement shall be governed by the FAA. Each Party consents to exclusive personal jurisdiction and venue in the state and federal courts located in Santa Clara County, California.

   

  26.Effective Date.  Employee understands that this Agreement shall be null and void if not executed by Employee within twenty-one (21) days.  This Agreement will become effective on the eighth (8th) day after Employee signs and returns this Agreement, so long as Employee has not revoked the Agreement before that date (the “Effective Date”).  For the avoidance of doubt, Employee’s timely revocation of this Agreement will automatically nullify the SAB Agreement attached as Exhibit A hereto. 

   

  27.Counterparts.  This Agreement may be executed separately in counterparts and, upon exchange, each counterpart set shall then be deemed an original and all of which counterparts taken together shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. The counterparts of this Agreement may be executed and delivered by facsimile, photo, email PDF, other electronic transmission or signature, or by physical delivery.

  8

   

  

   

  28.Voluntary Execution of Agreement.  Employee understands and agrees that Employee executed this Agreement voluntarily and without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all present claims between the Parties and the Releasees. Each Party acknowledges that:

   

  (a)she/ its signatory has read this Agreement;

  (b)she/it has a right to consult with an attorney regarding this Agreement, and has been represented in the preparation, negotiation, and execution of this Agreement by an attorney of her/ its own choice or has elected not to retain an attorney;

  (c)she/it understands the terms and consequences of this Agreement and of the releases and waivers it contains;

  (d)she/it is fully aware of the legal and binding effect of this Agreement; and

  (e)she/it has not relied upon any representations or statements made by the other Parties that are not specifically set forth in this Agreement. 

   

  IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

   

  		
	 
	CELINA MIKOLAJCZAK, an individual

	Dated: June 6, 2022, 
	/s/Celina Mikolajczak

	 
	Celina Mikolajczak

	 
	 

	 
	QUANTUMSCAPE BATTERY INC.

	Dated:  June 6, 2022, 
	By /s/Michael McCarthy

	 
	Michael McCarthy

	 
	Chief Legal Officer and Head of Corporate 

	 
	Development

	 
	QUANTUMSCAPE CORPORATON

	Dated: June 6, 2022,
	By /s/Michael McCarthy

	 
	Michael McCarthy

	 
	Chief Legal Officer and Head of Corporate

	 
	Development

  		 

  		 

   

  		 

  			 

  			 

   

  		 

   

  		 

  			 

  			 

   

   

  9

   

  

  	 

  EXHIBIT A

   

  SCIENTIFIC ADVISORY BOARD AGREEMENT

   

   

  [See Exhibit 10.3 to the Current Report on Form 10-Q filed on July 29, 2022]

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  10

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