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<SEC-DOCUMENT>0000950137-02-006309.txt : 20021118
<SEC-HEADER>0000950137-02-006309.hdr.sgml : 20021118
<ACCEPTANCE-DATETIME>20021114181741
ACCESSION NUMBER:		0000950137-02-006309
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20020930
FILED AS OF DATE:		20021114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FIRST FINANCIAL CORP /IN/
		CENTRAL INDEX KEY:			0000714562
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				351546989
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-16759
		FILM NUMBER:		02827285

	BUSINESS ADDRESS:	
		STREET 1:		ONE FIRST FINANCIAL PLAZA
		CITY:			TERRE HAUTE
		STATE:			IN
		ZIP:			47807
		BUSINESS PHONE:		(812) 238-6000

	MAIL ADDRESS:	
		STREET 1:		ONE FIRST FINANCIAL PLAZA
		CITY:			TERRE HAUTE
		STATE:			IN
		ZIP:			47807

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TERRE HAUTE FIRST CORP
		DATE OF NAME CHANGE:	19850808
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>c73127e10vq.txt
<DESCRIPTION>FORM 10-Q
<TEXT>
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

               QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934




For Quarter Ended   September 30, 2002
                    ------------------
Commission File Number 0-16759
                       -------

                            FIRST FINANCIAL CORPORATION
                            ---------------------------
              (Exact name of registrant as specified in its charter)

                  INDIANA                              35-1546989
                  -------                              ----------
         (State or other jurisdiction             (I.R.S. Employer
         Incorporation or organization)            Identification No.)

         One First Financial Plaza, Terre Haute, IN          47807
         ------------------------------------------          -----
         (Address of principal executive office)           (Zip Code)

         (812)238-6000
          -------------
         (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __x___    No _____.

As of November 8, 2002 there were outstanding 6,822,284 shares without par
value, of the registrant.





<PAGE>



                           FIRST FINANCIAL CORPORATION

                                    FORM 10-Q

                                      INDEX

<TABLE>
<CAPTION>

<S>                                                                                                 <C>
PART I.  Financial Information                                                                        Page No.
                                                                                                      --------

     Item 1.   Financial Statements:

       Consolidated Statements of Condition................................................................3

       Consolidated Statements of Income...................................................................4

       Consolidated Statements of Shareholders' Equity and Comprehensive Income............................5

       Consolidated Statements of Cash Flows...............................................................7

       Notes to Consolidated Financial Statements..........................................................8

     Item 2.   Management's Discussion and Analysis of
                   Financial Condition and Results of Operations..........................................10

     Item 3.  Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk...........12

     Item 4.  Controls and Procedures.....................................................................13

PART II.   Other Information:

     Item 5. Other Information............................................................................14

     Item 6. Exhibits and Reports on FORM 8-K.............................................................14

     Signatures...........................................................................................15

     Certification of Financial Results...................................................................16
</TABLE>




                                       2
<PAGE>


                           FIRST FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CONDITION
               (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                            September 30,    December 31,
                                                                                2002             2001
                                                                                ----             ----
                                                                            (Unaudited)
               ASSETS
<S>                                                                      <C>                 <C>
Cash and due from banks                                                     $72,727             $68,205
Federal funds sold and short-term investments                                 5,483              43,376
Securities, available-for-sale                                              531,449             463,509
Loans:
  Commercial, financial and agricultural                                    325,825             302,496
  Real estate - construction                                                 45,737              34,610
  Real estate - mortgage                                                    779,494             757,345
  Installment                                                               272,958             249,710
  Lease financing                                                             3,627               5,023
                                                                              -----               -----
                                                                          1,427,641           1,349,184
Less:
    Unearned income                                                             678                 723
    Allowance for loan losses                                                20,870              18,313
                                                                             ------              ------
                                                                          1,406,093           1,330,148
Accrued interest receivable                                                  14,181              14,948
Premises and equipment, net                                                  29,524              26,237
Bank-owned life insurance                                                    49,823              47,756
Goodwill                                                                      7,102               7,102
Other intangible assets                                                       4,414               3,767
Other real estate owned                                                       5,006               3,499
Other assets                                                                 34,338              33,358
                                                                             ------              ------
          TOTAL ASSETS                                                   $2,160,140          $2,041,905
                                                                          =========           =========

          LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Noninterest-bearing                                                       $150,005            $163,985
 Interest-bearing:
      Certificates of deposit of $100 or more                               201,130             204,474
      Other interest-bearing deposits                                     1,088,328             945,197
                                                                          ---------             -------
                                                                          1,439,463           1,313,656
Short-term borrowings                                                        25,259              54,596
Other borrowings                                                            423,324             426,078
Other liabilities                                                            33,326              30,064
                                                                             ------              ------
          TOTAL LIABILITIES                                               1,921,372           1,824,394
                                                                          ---------           ---------

Shareholders' equity:
 Common stock, $.125 stated value per share;
   Authorized shares--40,000,000
   Issued shares-7,225,483
   Outstanding shares--6,822,284 in 2002 and 6,844,260 in 2001                  903                 903
 Additional capital                                                          66,680              66,680
 Retained earnings                                                          173,252             158,038
 Accumulated other comprehensive income                                      15,343               8,299
Treasury shares, at cost - 398,199 in 2002 and 381,223 in 2001              (17,410)            (16,409)
                                                                             ------             --------

          TOTAL SHAREHOLDERS' EQUITY                                        238,768             217,511
                                                                            -------             -------

          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                     $2,160,140          $2,041,905
                                                                         ==========          ==========

See accompanying notes.
</TABLE>


                                       3
<PAGE>



                           FIRST FINANCIAL CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
               (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                            Three Months Ended            Nine Months Ended
                                                                               September 30,                 September 30,
                                                                            2001           2002           2002            2001
                                                                            ----           ----           ----            ----
                                                                               (Unaudited)                    (Unaudited)

<S>                                                                  <C>            <C>            <C>             <C>
INTEREST INCOME:
  Loans including related fees                                         $  26,314      $  27,224      $  79,737       $  82,404
  Securities:
    Taxable                                                                4,471          6,037         14,552          19,242
   Tax-exempt                                                              2,307          2,075          6,231           6,223
  Other                                                                      743            712          2,460           2,127
                                                                       ---------      ---------      ---------       ---------
   TOTAL INTEREST INCOME                                                  33,835         36,048        102,980         109,996
                                                                       ---------      ---------      ---------       ---------

INTEREST EXPENSE:
Deposits                                                                   8,631         11,472         26,482          37,302
Short-term borrowings                                                        127            753            575           2,131
Other borrowings                                                           5,784          5,914         17,084          18,592
                                                                       ---------      ---------      ---------       ---------
   TOTAL INTEREST EXPENSE                                                 14,542         18,139         44,141          58,025
                                                                       ---------      ---------      ---------       ---------

   NET INTEREST INCOME                                                    19,293         17,909         58,839          51,971

   Provision for loan losses                                               2,273          1,512          6,621           4,464
                                                                       ---------      ---------      ---------       ---------

   NET INTEREST INCOME AFTER PROVISION
   FOR LOAN LOSSES                                                        17,020         16,397         52,218          47,507

NON-INTEREST INCOME:
   Trust department income                                                   864            887          2,572           2,721
   Service charges and fees on deposit accounts                            1,590          1,384          4,557           4,018
   Other service charges and fees                                          1,412          1,172          3,841           3,192
   Securities gains                                                            -              -            (79)            172
   Insurance commissions                                                   1,739          1,394          4,583           2,167
   Gain on sales of mortgage loans                                         1,003            618          2,293           1,352
   Other                                                                     831            407          2,130           1,473
                                                                       ---------      ---------      ---------       ---------

TOTAL NON-INTEREST INCOME                                                  7,439          5,862         19,897          15,095
                                                                       ---------      ---------      ---------       ---------

NON-INTEREST EXPENSES:
   Salaries and employee benefits                                          9,466          7,881         26,823          21,843
   Occupancy expense                                                         882            920          2,691           2,692
   Equipment expense                                                         620            849          2,367           2,591
   Printing and supplies expenses                                            768            141          1,279             608
   Other                                                                   4,700          3,907         13,441          10,937
                                                                       ---------      ---------      ---------       ---------

   TOTAL NON-INTEREST EXPENSE                                             16,436         13,698         46,601          38,671
                                                                       ---------      ---------      ---------       ---------

   INCOME BEFORE INCOME TAXES                                              8,023          8,561         25,514          23,931

Provision for income taxes                                                 1,852          2,268          6,063           5,948
                                                                       ---------      ---------      ---------       ---------

   NET INCOME                                                          $   6,171      $   6,293      $  19,451       $  17,983
                                                                       =========      =========      =========       =========

EARNINGS PER SHARE:
   Net Income                                                          $    0.90      $    0.92      $    2.85       $    2.63
                                                                       =========      =========      =========       =========

Weighted average number of shares outstanding (in thousands)               6,825          6,855          6,830           6,829
                                                                       =========      =========      =========       =========
</TABLE>

See accompanying notes


                                       4
<PAGE>

                           FIRST FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                               Three Months Ended
                           September 30, 2002 and 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                                  Accumulated
                                                                                     Other
                                         Common     Additional        Retained   Comprehensive   Treasury
                                          Stock      Capital          Earnings       Income      Stock          Total

<S>                                 <C>            <C>            <C>           <C>           <C>            <C>
Balance, July 1, 2002                  $    903       $ 66,680       $167,081      $ 12,575      $(17,165)      $230,074

Comprehensive income:
     Net income                                                         6,171                                     6,171
     Change in net unrealized
     gains/(losses) on available-
     for- sale securities,                                                            2,768                       2,768
                                                                                                                  -----
       Total comprehensive income                                                                                 8,939

Treasury stock purchase                                                                              (245)          (245)
                                       --------       --------       --------      --------      --------       --------
Balance, September 30, 2002            $    903       $ 66,680       $173,252      $ 15,343      $(17,410)      $238,768
                                       ========       ========       ========      ========      ========       ========



Balance, July 1, 2001                  $    903       $ 66,680       $149,504      $  8,660      $(15,939)      $209,808

Comprehensive income:
     Net income                                                         6,293                                      6,293
     Change in net unrealized
     gains/(losses) on available-
     for-sale securities                                                              3,596                        3,596
                                                                                                                   -----
       Total comprehensive income                                                                                  9,889

Treasury stock purchase                                                                              (240)          (240)
                                       --------       --------       --------      --------      --------       --------
Balance, September 30, 2001            $    903       $ 66,680       $155,797      $ 12,256      $(16,179)      $219,457
                                       ========       ========       ========      ========      ========       ========

</TABLE>



See accompanying notes.



                                       5
<PAGE>




                           FIRST FINANCIAL CORPORATION
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                Nine Months Ended
                          September 30, 2002, and 2001
              (Dollar amounts in thousands, except per share data)
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                                     Accumulated
                                                                                        Other
                                             Common      Additional      Retained    Comprehensive    Treasury
                                              Stock        Capital       Earnings    Income/(Loss)     Stock          Total

<S>             >                       <C>            <C>            <C>           <C>           <C>            <C>
Balance, January 1, 2002                   $    903       $ 66,680       $158,038      $  8,299      $(16,409)      $217,511
Comprehensive income:
     Net income                                                            19,451                                     19,451
     Change in net unrealized
     gains/(losses) on available-
     for-sale securities                                                                  7,044                        7,044
                                                                                                                       -----
     Total comprehensive income                                                                                       26,495
Cash dividends, $.62 per share                                           (4,237)                                      (4,237)
Treasury stock purchase                                                                                 (1,001)       (1,001)
                                           --------       --------       --------      --------      --------       --------
Balance, September 30, 2002                $    903       $ 66,680       $173,252      $ 15,343      $(17,410)      $238,768
                                           ========       ========       ========      ========      ========       ========



Balance, January 1, 2001                   $    903       $ 66,680       $141,653      $  3,900      $(21,913)      $191,223
Comprehensive income
     Net income                                                            17,983                                     17,983
     Change in net unrealized
     gains/(losses) on available-for-
      sale securities                                                                    8,356                         8,356
                                                                                                                       -----
       Total comprehensive income                                                                                     26,339
Cash dividends, $.56 per share                                            (3,839)                                     (3,839)
Issuance of treasury shares                                                                             6,801          6,801
Treasury stock purchase                                                                                (1,067)        (1,067)

                                           --------       --------       --------      --------      --------       --------
Balance, September 30, 2001                $    903       $ 66,680       $155,797      $ 12,256      $(16,179)      $219,457
                                           ========       ========       ========      ========      ========       ========

</TABLE>

See accompanying notes.




                                       6
<PAGE>


                           FIRST FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollar amounts in thousands)


<TABLE>
<CAPTION>

                                                                              Nine Months Ended
                                                                                September 30,
                                                                             2002            2001
                                                                             ----            ----
                                                                                 (Unaudited)


CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                                      <C>             <C>
Net Income                                                                $  19,451       $  17,983
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Net accretion of discounts on investments                                  (1,133)         (1,558)
  Provision for loan losses                                                   6,621           4,464
  Securities (gains)/losses                                                      79            (172)
  Depreciation and amortization                                               2,137           2,508
  Other, net                                                                  1,509           2,427
                                                                          ---------       ---------
      NET CASH FROM OPERATING ACTIVITIES                                     28,664          25,652
                                                                          ---------       ---------



CASH FLOWS FROM INVESTING ACTIVITIES:

Sales of available-for-sale securities                                       22,741               -
Maturities and principal reductions on available-for-sale securities        125,663          84,854
Purchases of available-for-sale securities                                 (165,556)        (24,045)
Loans made to customers, net of repayments                                   14,316         (43,267)
Net change in federal funds sold                                             37,893           2,675
Purchase of First Community Financial Corp.                                  14,554               -
Purchase of Forrest Sherer                                                        -          (1,699)
Additions to premises and equipment                                          (1,484)         (1,967)
                                                                          ---------       ---------
      NET CASH FROM INVESTING ACTIVITIES                                     48,127          16,551
                                                                          ---------       ---------


CASH FLOWS FROM FINANCING ACTIVITIES:

Net change in deposits                                                      (20,829)        (70,772)
Net change in short-term borrowings                                         (34,475)         66,401
Dividends paid                                                               (8,210)         (7,586)
Purchase of treasury stock                                                   (1,001)         (1,067)
Proceeds from other borrowings                                               21,006          78,923
Repayments on other borrowings                                              (28,760)       (136,785)
                                                                          ---------       ---------
     NET CASH FROM FINANCING ACTIVITIES                                     (72,269)        (70,886)
                                                                          ---------       ---------

    NET CHANGE IN CASH AND CASH EQUIVALENTS                                   4,522         (28,683)
    CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                           68,205          68,755
                                                                          ---------       ---------

    CASH AND CASH EQUIVALENTS, END OF PERIOD                              $  72,727       $  40,072
                                                                          =========       =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Cash paid during the period for interest                              $  45,527       $  59,659
                                                                          =========       =========

    Income taxes paid                                                     $   8,547       $   4,851
                                                                          =========       =========
</TABLE>

See accompanying notes.


                                       7
<PAGE>



                           FIRST FINANCIAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The accompanying September 30, 2002 and 2001 consolidated financial
statements are unaudited. The December 31, 2001 consolidated financial
statements are as reported in the First Financial Corporation (the Corporation)
2001 annual report. The following notes should be read together with notes to
the consolidated financial statements included in the 2001 annual report filed
with the Securities and Exchange Commission as an exhibit to Form 10-K.

1.   The significant accounting policies followed by the Corporation and its
subsidiaries for interim financial reporting are consistent with the accounting
policies followed for annual financial reporting. All adjustments which are, in
the opinion of management, necessary for a fair statement of the results for the
periods reported have been included in the accompanying consolidated financial
statements and are of a normal recurring nature. The Corporation reports
financial information for only one segment, banking.

2.   A loan is considered to be impaired when, based upon current information
and events, it is probable that the Corporation will be unable to collect all
amounts due according to the contractual terms of the loan. Impairment is
primarily measured based on the fair value of the loan's collateral. The
following table summarizes impaired loan information:

<TABLE>
<CAPTION>

                                                                                                        (000's)

                                                                                            September 30,       December 31,
                                                                                                2002                 2001
                                                                                                -----                ----

<S>                                                                                            <C>               <C>
Impaired loans with related allowance for loan losses calculated under
 SFAS No. 114....................................................................................$3,402            $3,610
</TABLE>

     Interest payments on impaired loans are typically applied to principal
unless collection of the principal amount is deemed to be fully assured, in
which case interest is recognized on a cash basis.

3.   Securities
     The amortized cost and fair value of the Corporation's investments at
September 30, 2002 are shown below. All securities are classified as
available-for-sale.
<TABLE>
<CAPTION>

                                                          (000's)                              (000's)
                                                   September 30, 2002                     December 31, 2001
                                                Amortized Cost    Fair Value      Amortized Cost     Fair Value
                                                --------------    ----------      --------------     ----------


<S>                                              <C>             <C>              <C>               <C>
United States Government and its agencies          $179,613        $184,409         $208,973          $213,731
Collateralized Mortgage Obligations                  66,647          70,064            4,958             5,065
States and Municipal                                165,040         175,821          162,886           166,866
Corporate Obligations                                99,328         100,155           77,576            77,847
                                                     ------         -------           ------            ------
                                                   $510,628        $531,449         $454,393          $463,509
                                                   ========        ========         ========          ========
</TABLE>

4.  Short-Term Borrowings
     Period-end short-term borrowings were comprised of the following:
<TABLE>
<CAPTION>

                                                                                      (000's)
                                                                            September 30,   December 31,
                                                                                  2002          2001
                                                                                  ----          ----

<S>                                                                           <C>           <C>
Federal Funds Purchased                                                          $5,760        $9,920
Repurchase Agreements                                                            14,732        37,400
Note Payable - U.S. Government                                                    4,767         7,276
                                                                                  -----         -----
                                                                                $25,259       $54,596
                                                                                =======       =======
</TABLE>

                                       8
<PAGE>

5.   Other Borrowings
     Other borrowings at period-end are summarized as follows:


<TABLE>
<CAPTION>

                                                                                           (000's)
                                                                                 September 30,   December 31,
                                                                                      2002           2001
                                                                                      ----           ----

<S>                                                                                <C>            <C>
FHLB Advances                                                                       $397,224       $419,478
Note Payable to a Financial Institution                                               19,500              -
City of Terre Haute, Indiana Economic Development Revenue bonds                        6,600          6,600
                                                                                       -----          -----
                                                                                    $423,324       $426,078
                                                                                    ========        =======
</TABLE>

6.   Derivatives

     During 2001, the Corporation purchased an interest rate cap contract with a
notional principal balance of $50 million. The agreement requires the
counterparty to pay the Corporation the excess of the 3 month LIBOR over 6.00%.
The cap has a 36 month term which runs through June, 2004. No payments are
currently required under the agreement. The agreement was entered into to help
protect the Corporation's net interest income should interest rates increase in
excess of the cap's trigger amount. The interest rate cap is carried at fair
value, approximately $7 thousand at September 30, 2002, and is included in other
assets on the statement of condition.

7.  Acquisitions

     Forrest Sherer, Inc. (FSI) - On May 1, 2001, the Corporation acquired all
of the outstanding common stock of FSI, a full-line insurance agency
headquartered in Terre Haute, Indiana. The purchase price was $8.5 million,
consisting of the issuance of 182,672 shares of the Corporation's common stock
and the payment of $1.7 million in cash. Assets acquired, liabilities assumed
and net assets at acquisition were not significant. The acquisition was
accounted for as a purchase and resulted in the recording of goodwill of
approximately $5.4 million and a customer list intangible of approximately $3.1
million. Prior to the adoption of new accounting guidance, effective January 1,
2002, goodwill was being amortized using the straight-line method over 15 years.
The customer list intangible is being amortized, using an accelerated method,
over ten years.

     Community Financial Corporation (CFC) - On January 31, 2002, the
Corporation acquired all of the outstanding stock of CFC for $33 million in
cash. CFC is a bank holding company based in Olney, Illinois, which had total
assets of approximately $190 million and net assets of approximately $32 million
at acquisition. The fair values of significant assets acquired and liabilities
assumed were $98 million of loans, $48 million of cash and cash equivalents, $38
million of securities and $148 million of deposits. The transaction was
accounted for as a purchase and resulted in the recording of a core deposit
intangible of approximately $1 million.

     The following table presents proforma revenue, net income, and earnings per
share determined as if the acquisitions had been consummated at January 1, 2001.
Key assumptions include the add back of the amortization of the intangible
assets of $230 thousand of FSI and CFC.

<TABLE>
<CAPTION>

                                                                                   Nine months ended September 30,
                                                                                          (000's omitted,
                                                                                        except per share data)

                                                                                          2002          2001
                                                                                          ----          ----

<S>                                                                                    <C>           <C>
Revenue                                                                                 $123,737      $137,716
Net income                                                                                18,589        16,120
Earnings per share                                                                      $   2.72      $   2.36
</TABLE>

8.  New Accounting Standards

     A new accounting standard dealing with asset retirement obligations will
apply for 2003. The Corporation does not believe this standard will have a
material affect on its financial position or results of operations.

     Effective January 1, 2002, the Corporation adopted a new accounting
standard dealing with the impairment and disposal of long-lived assets. The
effect of this on the financial position and results of operations of the
Corporation was not significant.

     New accounting standards issued in 2001 required all business combinations
initiated after June 30, 2001 to be recorded using the purchase method of
accounting. Under the purchase method, all identifiable tangible and intangible
assets and liabilities of the acquired company are recorded at fair value at
date of acquisition, and the excess of cost over fair value of net assets
acquired is recorded as goodwill. Identifiable intangible assets with finite
useful lives will be separated from goodwill and amortized over their expected
lives, whereas goodwill, both amounts previously recorded and future amounts
purchased,

                                       9
<PAGE>

will cease being amortized on January 1, 2002. Annual impairment testing will be
required for goodwill with impairment being recorded if the carrying amount of
goodwill exceeds its implied fair value.

     The Corporation adopted this standard on January 1, 2002 and ceased
amortizing goodwill associated with the acquisitions of The Morris Plan Company
of Terre Haute in 1998 and FSI in 2001. No additional goodwill has been recorded
during 2002 and management does not believe any amount of the goodwill recorded
by the Corporation is impaired. The $7.1 million of goodwill on the balance
sheet is net of accumulated amortization of $737 thousand.

     Intangible assets at September 30, 2002, subject to amortization are as
follows:


                                                        (000's)
                                                                Accumulated
                                             Gross Amount      Amortization
                                             ------------      ------------

Customer list intangible                        $3,108          $  625
Core deposit intangible                          1,165              67
Branch purchase intangibles                        981             496
Non-compete agreements                             500             152
                                                   ---             ---
                                                $5,754          $1,340
                                                ======          ======

     Amortization expense for the second quarter of 2002 and year to-date was
$172 thousand and $519 thousand respectively.

     Estimated amortization expense for the next five years is:

                                        (000's)
                                    2002        691
                                    2003        689
                                    2004        689
                                    2005        689
                                    2006        681

     If this standard had been in effect in 2001, net income for the three and
nine months ended September 30, 2001, would not have included goodwill
amortization of $100 thousand and $270 thousand and would have been $5.9 million
and $18.3 million. Earnings per share would have been $0.86 and $2.67.

                           FIRST FINANCIAL CORPORATION


ITEMS 2. and 3. Management's Discussion and Analysis of Financial Condition and
     Results of Operations and Quantitative and Qualitative Disclosures About
     Market Risk

     The purpose of this discussion is to point out key factors in the
Corporation's recent performance compared with earlier periods. The discussion
should be read in conjunction with the financial statements beginning on page
four of this report. All figures are for the consolidated entities. It is
presumed the readers of these financial statements and of the following
narrative have previously read the Corporation's annual report for 2001.

     Forward-looking statements contained in the following discussion are based
on estimates and assumptions that are subject to significant business, economic
and competitive uncertainties, many of which are beyond the Corporation's
control and are subject to change. These uncertainties can affect actual results
and could cause actual results to differ materially from those expressed in any
forward-looking statements in this discussion.

                          Summary of Operating Results


     Net income for the nine months ended September 30, 2002 was $19.5 million,
an 8.2% improvement from the $18.0 million in the same period in 2001. Basic
earnings per share increased to $2.85 through the third quarter of 2002 compared
to $2.63 for 2001, an 8.4% improvement.

     Third quarter net income was $6.2 million, a 1.9% decrease from net income
of $6.3 million in the third quarter of 2001. Compared to the same quarter last
year, earnings per share decreased 2.2% to $0.90 per share from $0.92 per share,
and the net interest margin increased 1.5% to 4.11% from 4.05%.

                                       10
<PAGE>

     The primary components of income and expense affecting net income are
discussed in the following analysis.

Net Interest Income

     The Corporation's primary source of earnings is net interest income, which
is the difference between the interest earned on loans and other investments and
the interest paid for deposits and other sources of funds. Net interest income
increased to $58.8 million in the first nine months of 2002 from $52.0 million
in the same period of 2001, a 13.2%, or $6.9 million increase. This was the
result of an increase of $161.4 million in average interest earning assets and
an improved net interest margin for 2002. The net interest margin increased from
3.9% in 2001 to 4.1% in 2002, a 3.5% increase driven by a greater decline in the
average cost of funds than in the yield on earning assets.


Non-Interest Income

     Non-interest income increased $4.8 million, or 31.8%, over 2001, which was
driven by increases in fee-based income, higher gains from the sales of mortgage
loans and insurance commission income related to the recent acquisition of
Forrest Sherer, Inc. in May 2001.


Non-Interest Expenses

     Non-interest expenses increased $7.9 million, or 20.5%, due mainly to added
costs, primarily personnel costs, associated with the recent acquisitions, as
well as increases in employee salaries and fringe benefit programs.


Allowance for Loan Losses

     The Corporation's provision for loan losses increased to $6.6 million for
the first nine months of 2002 compared to $4.5 million in the same period of
2001. At September 30, 2002, the allowance for loan losses was 1.46% of net
loans, an increase from 1.36% at December 31, 2001. Net chargeoffs for the first
nine months of 2002 were $5.8 million compared to $6.0 million for the same
period of 2001. Based on management's analysis of the current portfolio, an
evaluation that includes consideration of historical loss experience and
potential loss exposure on identified problem loans, management believes the
allowance of $20.9 million at September 30, 2002 is adequate.


Nonperforming Loans and Leases

     Nonperforming loans and leases consist of (1) nonaccrual loans and leases
on which the ultimate collectability of the full amount of interest is
uncertain, (2) loans and leases which have been renegotiated to provide for a
reduction or deferral of interest or principal because of a deterioration in the
financial position of the borrower, and (3) loans and leases past due ninety
days or more as to principal or interest. A summary of nonperforming loans and
leases at September 30, 2002 and December 31, 2001 follows:

<TABLE>
<CAPTION>

                                                                                (000's)
                                                                 September 30, 2002    December 31, 2001
                                                                 ------------------    -----------------

<S>                                                                   <C>                <C>
Nonaccrual loans and leases                                             $9,945             $8,854
Renegotiated loans and leases                                              574                590
Ninety days past due loans and leases                                    3,975              4,925
                                                                         -----              -----
   Total nonperforming loans and leases                                $14,494            $14,369
                                                                       =======            =======

Ratio of the allowance for loan losses
as a percentage of nonperforming loans and leases                         144%               127%
</TABLE>

                                       11
<PAGE>


     The following loan categories comprise significant components of the
nonperforming loans at September 30, 2002 and December 31, 2001.

<TABLE>
<CAPTION>

                                                                      (000's)
                                                   September 30, 2002          December 31, 2001
                                                   ------------------          -----------------
Non-Accrual Loans:
<S>                                                     <C>                      <C>
      1-4 family residential                              $2,010                   $3,033
      Commercial loans                                     6,336                    4,406
      Installment loans                                    1,599                    1,415
      Other, various                                           -                        -
                                                           -----                    -----
                                                          $9,945                   $8,854
                                                          ======                   ======

Past due 90 days or more:
       1-4 family residential                             $1,821                   $1,587
       Commercial loans                                    1,201                    2,177
       Installment loans                                     953                    1,161
       Other, various                                          -                        -
                                                           -----                    -----
                                                          $3,975                   $4,925
                                                          ======                   ======
</TABLE>


     There are no material industry concentrations within the nonperforming
loans.

Interest Rate Sensitivity and Liquidity

     The Corporation charges the nine subsidiary banks with monitoring and
managing their individual sensitivity to fluctuations in interest rates and
assuring that they have adequate liquidity to meet loan demand or any potential
unexpected deposit withdrawals. This function is facilitated by the
Asset/Liability Committee (the Committee). The primary goal of the committee is
to maximize net interest income within the interest rate risk limits approved by
the Board of Directors. This goal is accomplished through management of the
subsidiary bank's balance sheet liquidity and interest rate risk exposures due
to the changes in economic conditions and interest rate levels.

Interest Rate Risk and Quantitative and Qualitative Disclosures About Market
Risk

      Management considers interest rate risk to be the Corporation's most
significant market risk. Interest rate risk is the exposure to changes in net
interest income as a result of changes in interest rates. Consistency in the
Corporation's net income is largely dependent on the effective management of
this risk.

     The Committee reviews a series of monthly reports to ensure that
performance objectives are being met. It monitors and controls interest rate
risk through earnings simulation. Simulation modeling measures the effects of
changes in interest rates, changes in the shape of the yield curve, and changes
in prepayment speeds on net interest income. The primary measure of Interest
Rate Risk is "Earnings at Risk." This measure projects the earnings effect of
various rate movements over the next three years on net interest income. It is
important to note that measures of interest rate risk have limitations and are
dependent upon certain assumptions. These assumptions are inherently uncertain
and, as a result, the model cannot precisely predict the impact of interest rate
fluctuations on net interest income. Actual results will differ from simulated
results due to timing, frequency, and amount of interest rate changes as well as
overall market conditions. The Committee has performed a thorough analysis and
believes the assumptions to be valid and theoretically sound. The relationships
are continuously monitored for behavioral changes.

     As outlined in Note 6, the Corporation makes limited use of derivatives to
facilitate its interest rate risk management activities. The Corporation
currently does not invest in derivative products for short-term gain, nor is
engaged in securities trading activity. The Corporation invests in assets whose
value is derived from an underlying asset. These assets include government
agency issued mortgage-backed securities. The performance of these assets in
changing rate environments and the impact of derivatives are included in the
following table.

     The table below shows the Corporation's estimated earnings sensitivity
profile as of September 30, 2002. Given a 100 basis point increase in rates, net
interest income would increase 1.78% over the next 12 months and increase 7.02%
over the second 12 month period. A 100 basis point decrease would result in a
1.79% decrease in net interest income over the next 12 months and a 6.79%
decrease over the second 12 month period. These estimates assume all rates
changed overnight and management took no action as a result of this change.




                                       12
<PAGE>

<TABLE>
<CAPTION>


    Basis Point                                  Percentage Change in Net Interest Income
                                                 ----------------------------------------
    Interest Rate Change                           12 months     24 months      36 months
    -------------------------------------------------------------------------------------
<S>                                                <C>          <C>           <C>
    Down 300                                         -9.71        -23.46         -29.74
    Down 200                                         -5.46        -15.00         -19.12
    Down 100                                         -2.87         -7.67          -9.65
    Up 100                                            2.96          8.03          10.31
    Up 200                                            6.55         17.28          21.89
    Up 300                                            9.86         25.12          31.99

</TABLE>

     The Corporation does have other assets and liabilities, which contain
embedded options, most notably callable agency securities, and putable Federal
Home Loan Bank advances. The securities pay a premium rate and the advances
charge a discounted rate in exchange for the option. Therefore, there is a
benefit to current income from using these products. Management believes these
put and call options are clearly and closely related to the underlying
instruments and that they are therefore not considered derivatives. Typical rate
shock analysis does not reflect management's ability to react and thereby reduce
the effects of rate changes, and represents a worst case scenario. The model
assumes no actions are taken and prices change to the full extent of the rate
shock.

Liquidity Risk

     Liquidity is measured by each bank's ability to raise funds to meet the
obligations from its customers, including deposit withdrawals and credit needs.
This is accomplished primarily by maintaining sufficient liquid assets in the
form of investment securities and core deposits. The Corporation has $15.3
million of investments that mature throughout the coming 12 months. The
Corporation also anticipates $59.8 million of principal payments from
mortgage-backed securities. Given the current interest rate environment, the
Corporation anticipates $19.8 million of securities to be called within the next
12 months. With these sources of funds, the Corporation currently anticipates
adequate liquidity to meet the expected obligations of its customers.

Financial Condition

     Comparing 2002 to 2001, year-to-date average deposits were up $180.1
million, or 13.9%. These deposits were used to fund an increase in total average
loans of $125.5 million, or 9.6%, and pay down average borrowings by $36.9
million. Average assets increased $175.7 million, or 8.6%, and average
shareholders' equity increased $27.3 million, or 13.0%. Book value per share
increased 9.2% to $35.00 in 2002 from $32.04 in 2001.

     The purchase of Community Bank and Trust, N.A was consummated on January
31, 2002. The average balances reported above include Community's $94.5 million
of average loans, $130.3 million of average deposits, and $161.2 million of
average total assets.

Capital Adequacy

     As of September 30, 2002, the Corporation's leverage ratio was 10.45%
compared to 9.87% at December 31, 2001.

     At September 30, 2002, the Corporation's total risk-based capital ratio,
which includes Tier II capital, was 15.80% compared to 15.15% at December 31,
2001. These amounts exceed minimum regulatory capital requirements.

ITEM 4. Controls and Procedures

(a) Within the 90-day period prior to the filing date of this report, an
evaluation was carried out under the supervision and with the participation of
First Financial Corporation's management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934). Based on their evaluation, our Chief Executive
Officer and Chief Financial Officer have concluded that the Company's disclosure
controls and procedures are, to the best of their knowledge, effective.

(b) Subsequent to the date of their evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that there were no significant changes in
First Financial Corporation's internal controls or in other factors that could
significantly affect its internal controls, including any corrective actions
with regard to significant deficiencies and material weaknesses.


                                       13
<PAGE>




                           FIRST FINANCIAL CORPORATION
                            PART II OTHER INFORMATION
                                    FORM 10-Q



Item 5  Other Information

     At the October 15, 2002 board meeting, Norman L. Lowery was named by the
Board of Directors as the Chief Executive Officer of the Corporation.

Item 6.  Exhibits and Reports on Form 8-K.
     (a) Exhibits

           3 (i) Articles of Incorporation of First Financial Corporation

         3(ii) By-laws of First Financial Corporation

         10.1 Deferred Compensation Agreement and Split Dollar Insurance
              Agreement for Donald E. Smith

         10.2 Employment Agreement for Norman L. Lowery

         10.3 2001 Long-Term Incentive Plan of the Corporation

         99.1 Chief Executive Officer and Chief Financial Officer Certification
              pursuant to 18 U.S.C. Section 1350

     (b) No reports on Form 8-K were filed during the quarter of the fiscal year
         for which this report is filed.




                                       14
<PAGE>


                           FIRST FINANCIAL CORPORATION
                            PART II OTHER INFORMATION
                                    FORM 10-Q
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                              FIRST FINANCIAL CORPORATION
                                              ---------------------------
                                                     (Registrant)




Date: November 14, 2002                        By /s/ Donald E. Smith
                                                 -------------------------
                                               Donald E. Smith, Chairman



Date: November 14, 2002                        By /s/ Norman L. Lowery
                                                 -------------------------
                                               Norman L. Lowery, Vice Chairman



Date: November 14, 2002                        By /s/ Michael A. Carty
                                                 -------------------------
                                               Michael A. Carty, Treasurer



                                       15
<PAGE>


                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER



I, Norman L. Lowery, certify that:


1)   I have reviewed this quarterly report on Form 10-Q of First Financial
     Corporation;

2)   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3)   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4)   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
        information relating to the registrant, including its consolidated
        subsidiaries, is made known to us by others within those entities,
        particularly during the period in which this quarterly report is being
        prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
        procedures as of a date within 90 days prior to the filing date of this
        quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
        effectiveness of the disclosure controls and procedures based on our
        evaluation as of the Evaluation Date;

5)   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a) all significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have identified
        for the registrant's auditors any material weaknesses in internal
        controls; and

     b) any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

6)   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:     November 14, 2002


Signed: /s/ Norman L. Lowery
      -------------------------
      Norman L. Lowery,
      Vice Chairman and CEO


                                       16
<PAGE>
                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER



I, Michael A. Carty, certify that:


1)   I have reviewed this quarterly report on Form 10-Q of First Financial
     Corporation;

2)   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3)   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4)   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a) designed such disclosure controls and procedures to ensure that material
        information relating to the registrant, including its consolidated
        subsidiaries, is made known to us by others within those entities,
        particularly during the period in which this quarterly report is being
        prepared;

     b) evaluated the effectiveness of the registrant's disclosure controls and
        procedures as of a date within 90 days prior to the filing date of this
        quarterly report (the "Evaluation Date"); and

     c) presented in this quarterly report our conclusions about the
        effectiveness of the disclosure controls and procedures based on our
        evaluation as of the Evaluation Date;

5)   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a) all significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have identified
        for the registrant's auditors any material weaknesses in internal
        controls; and

     b) any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

6)   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:    November 14, 2002


Signed:  /s/ Michael A. Carty
       ------------------------
       Michael A. Carty,
       Treasurer and CFO


                                       17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(I)
<SEQUENCE>3
<FILENAME>c73127exv3wxiy.txt
<DESCRIPTION>ARTICLES OF INCORPORATION
<TEXT>
<PAGE>
Exhibit 3(i) Articles of Incorporation of First Financial Corporation


  AMENDED AND RESTATED ARTICLES OF INCORPORATION OF FIRST FINANCIAL CORPORATION

                                    ARTICLE 1
                                      NAME

         The name of the Corporation is First Financial Corporation.

                                    ARTICLE 2
                               PURPOSES AND POWERS

         SECTION 2.01. PURPOSES. The purposes for which the Corporation is
formed are the transaction of any or all lawful business for which corporations
may be incorporated under the Indiana Business Corporation Law, as the same may,
from time to time, be amended (the "Act").

         SECTION 2.02. POWERS. The Corporation shall have the same powers as an
individual to do all things necessary or convenient to carry out its business
and affairs, including without limitation, all the powers specifically
enumerated in the Act.

                                    ARTICLE 3
                                TERM OF EXISTENCE

         The period during which the Corporation shall continue is perpetual.

                                    ARTICLE 4
                      REGISTERED OFFICE AND RESIDENT AGENT

         The street address of the registered office of the Corporation is:

                            One First Financial Plaza
                                  P.O. Box 540
                           Terre Haute, Indiana 47808

         and the name and business office address of its registered agent in
charge of such office are:

                                 Donald E. Smith
                           First Financial Corporation
                            One First Financial Plaza
                                  P.O. Box 540
                           Terre Haute, Indiana 47808

                                    ARTICLE 5
                                NUMBER OF SHARES

         The total number of shares which the Corporation shall have authority
to issue is Fifty Million (50,000,000) shares, all of which are without par
value.

                                    ARTICLE 6
                                 TERMS OF SHARES
<PAGE>

         SECTION 6.01. DESIGNATION OF CLASSES, NUMBER AND PAR VALUE OF SHARES.
The shares of authorized capital shall be divided into Ten Million (10,000,000)
shares of Preferred Stock, without par value, as hereinafter provided
("Preferred Stock"), and Forty Million (40,000,000) shares of Common Stock,
without par value ("Common Stock"), as hereinafter provided.

         SECTION 6.02. RIGHTS, PRIVILEGES, LIMITATIONS AND RESTRICTIONS OF
PREFERRED STOCK. The Board of Directors of the Corporation is vested with
authority to determine and state the designations and the relative preferences,
limitations, voting rights, if any, and other rights of the Preferred Stock and
of each series of Preferred Stock by the adoption and filing in accordance with
the Act, before the issuance of any shares of such Preferred Stock or series of
Preferred Stock, of an amendment or amendments to these Articles of
Incorporation as the same may, from time to time, be amended, determining the
terms of such Preferred Stock or series of Preferred Stock ("Preferred Stock
Designation"). All shares of Preferred Stock of the same series shall be
identical with each other in all respects. The number of authorized shares of
Preferred Stock may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the voting power of all of the then outstanding shares of the
capital stock of the Corporation entitled to vote generally in the election of
Directors, after giving effect to the provisions in Article 11 hereof ("Voting
Stock"), voting as a single class, without a separate vote of the holders of the
Preferred Stock or any series thereof, unless a vote of any such holders is
required pursuant to the Preferred Stock Designation.

         SECTION 6.03.  RIGHTS, PRIVILEGES, LIMITATIONS AND RESTRICTIONS OF
COMMON STOCK.

                  CLAUSE 6.031. SINGLE CLASS. The shares of Common Stock shall
         constitute a separate and single class and shall not be issued in
         series. All shares of Common Stock shall be identical with each other
         in all respects.

                  CLAUSE 6.032. LIQUIDATION. In the event of any voluntary or
         involuntary liquidation, dissolution, or winding up of the Corporation,
         the holders of the shares of Common Stock shall be entitled. after
         payment or provision for payment of the debts and other liabilities of
         the Corporation and of all shares of stock having priority over the
         Common Stock, in the event of voluntary or involuntary liquidation,
         dissolution or winding up, to share ratably in the remaining net assets
         of the Corporation.

                  CLAUSE 6.033. VOTING RIGHTS. Every holder of shares of Common
         Stock shall have the right, at every Shareholders' meeting, to one vote
         for each share of Common Stock standing in his name on the books of the
         Corporation, except as otherwise provided in the Act.

         SECTION 6.04. ISSUANCE OF SHARES. The Board of Directors has authority
to authorize and direct the issuance by the Corporation of shares of Preferred
Stock and Common Stock at such times, in such amounts, to such persons, for such
considerations and upon such terms and conditions as it may, from time to time,
determine upon, subject only to the restrictions, limitations, conditions and
requirements imposed by the Act, other applicable laws and these Articles of
Incorporation, as the same may, from time to time, be amended.

         SECTION 6.05. DISTRIBUTIONS UPON SHARES. The Board of Directors has
authority to authorize and direct the payment of dividends and the making of
other distributions by the Corporation in respect of the issued and outstanding
shares of Preferred Stock and Common Stock (i) at such times, in such amount and
forms, from such sources and upon such terms and conditions as it may, from time
to time, determine upon, subject only to the restrictions, limitations,
conditions and requirements imposed by the Act, other applicable laws and these
Articles of Incorporation, as the same may, from time to time, be amended, and
(ii) in shares of the same class or series or in shares of any other class or
series without obtaining the affirmative vote or the written consent of the
holders of the shares of the class or series in which the payment or
distribution is to be made.

         SECTION 6.06. ACQUISITION OF SHARES. The Board of Directors has
authority to authorize and direct the acquisition by the Corporation of the
issued and outstanding shares of Preferred Stock and Common Stock at such times,
in such amounts, from such persons, for such considerations, from such sources
and upon such terms and conditions as it may, from time to time, determine upon,
subject only to the restrictions, limitations, conditions and requirements
imposed by the Act, other applicable laws and these Articles of Incorporation,
as the same may, from time to time, be amended.
<PAGE>

         SECTION 6.07. RECOGNITION PROCEDURE FOR BENEFICIAL OWNERSHIP OF SHARES
OR RIGHTS. The Board of Directors may establish in the Code of By-Laws of the
Corporation a recognition procedure by which the beneficial owner of any share
or right of the Corporation that is registered on the books of the Corporation
in the name of a nominee is recognized by the Corporation, to the extent
provided in any such recognition procedure, as the owner thereof.

         SECTION 6.08. DISCLOSURE PROCEDURE FOR BENEFICIAL OWNERSHIP OF SHARES
OR RIGHTS. The Board of Directors may establish in the Corporation's Code of
By-Laws a disclosure procedure by which the name of the beneficial owner of any
share or right of the Corporation that is registered on the books of the
Corporation in the name of a nominee shall, to the extent not prohibited by the
Act or other applicable laws, be disclosed to the Corporation. Any disclosure
procedure established by the Board of Directors may include reasonable sanctions
to ensure compliance therewith, including without limitation (i) prohibiting the
voting of, (ii) providing for mandatory or optional reacquisition by the
Corporation of, and (iii) the withholding or payment into escrow of any dividend
or other distribution in respect of, any share or right of the Corporation as to
which the name of the beneficial owner is not disclosed to the Corporation as
required by such disclosure procedure.

         SECTION 6.09. NO PRE-EMPTIVE RIGHTS. The holders of the Common Stock
and the holders of the Preferred Stock or any series of the Preferred Stock
shall have no pre-emptive rights to subscribe to or purchase any shares of
Common Stock, Preferred Stock or other securities of the Corporation.

         SECTION 6.10. RECORD OWNERSHIP OF SHARES OR RIGHTS. The Corporation, to
the extent permitted by law, shall be entitled to treat the person in whose name
any share or right of the Corporation is registered on the books of the
Corporation as the owner thereof for all purposes, and shall not be bound to
recognize any equitable or any other claim to, or interest in, such share or
right on the part of any other person, whether or not the Corporation shall have
notice thereof.

                                    ARTICLE 7
                                    DIRECTORS
         SECTION 7.01. NUMBER. The number of Directors of the Corporation shall
not be less than five (5) nor more than twenty (20), as may be specified from
time to time by resolution adopted by a majority of the total number of the
Corporation's Directors. If and whenever the Board of Directors has not
specified the number of Directors, the number shall be fourteen (14). The
directors elected by the Shareholders shall be divided into three (3) classes,
as nearly equal in number as possible, with the term of office of the first
class to expire at the Annual Meeting of Shareholders held following the fiscal
year ended December 31, 1997, the term of office of the second class to expire
at the Annual Meeting of Shareholders held following the fiscal year ended
December 31, 1998, and the term of office of the third class to expire at the
Annual Meeting of Shareholders held following the fiscal year ended December 31,
1999. At each Annual Meeting of Shareholders following such initial
classification, Directors elected by the Shareholders to succeed those Directors
whose term expires shall be elected for a term of office to expire at the third
succeeding Annual Meeting of Shareholders after their election. Each Director
shall hold office until his successor is chosen and qualified. There shall be no
cumulative voting by Shareholders of any class or series in the election of
Directors of the Corporation.

         SECTION 7.02. VACANCIES. Subject to the rights of the holders of any
series of Preferred Stock then outstanding, newly-created directorships
resulting from any increase in the authorized number of Directors or any
vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause shall be filled
only by a majority vote of the Continuing Directors, as defined below, although
less than a quorum of the Board of Directors. Directors so chosen shall hold
office for a term expiring at the Annual Meeting of Shareholders at which the
term of the class to which they have been elected expires. No decrease in the
number of authorized Directors constituting the entire Board of Directors shall
shorten the term of any incumbent Director. For purposes of this section, the
term "Continuing Director" shall mean any Director then serving as such who was
a member of the Corporation's Board of Directors on April 16, 1997. or was
recommended for appointment or election (before such person's initial assumption
of office as a Director) by a majority of the Continuing Directors then on the
Board.
<PAGE>

         SECTION 7.03. REMOVAL. Subject to the rights of the holders of any
series of Preferred Stock then outstanding, any Director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 66 2/3% of the voting power
of all of the shares of the Corporation entitled to vote generally in the
election of Directors, voting together as a single class. For purposes of this
section, removal for cause shall be limited to the grounds then specifically
enumerated in 12 C.F.R. Section 563.39 (or any successor provision) with respect
to termination for cause.

         SECTION 7.04. SHAREHOLDER NOMINATION OF DIRECTOR CANDIDATES AND
INTRODUCTION OF BUSINESS. Advance notice of Shareholder nominations for the
election of Directors and of business to be brought by Shareholders before any
meeting of the Shareholders of the Corporation shall be given in the manner
provided in the Corporation's Code of By-Laws.

         SECTION 7.05. CALLING OF SPECIAL SHAREHOLDER MEETINGS. Special meetings
of the Shareholders of the Corporation may only be called by the Chairman of the
Board of Directors or by the Board of Directors pursuant to a resolution adopted
by a majority of the total number of Directors of the Corporation.

         SECTION 7.06. CODE OF BY-LAWS. The Board of Directors of the
Corporation shall have power, without the assent or vote of the Shareholders, to
make, alter, amend or repeal the Code of By-Laws of the Corporation by the
affirmative vote of a number of Directors equal to a majority of the number who
constitute a full Board of Directors at the time of such action. Shareholders
shall not have any power to make, alter, amend or repeal the Corporation's Code
of By-Laws.

         SECTION 7.07. FACTORS TO BE CONSIDERED BY BOARD. In addition to any
other considerations which the Board of Directors may lawfully take into
account, in determining whether to take or to refrain from taking corporate
action on any matter, including making or declining to make any recommendation
to the Shareholders of the Corporation, the Board of Directors may in its
discretion consider the long-term as well as short-term best interests of the
Corporation (including the possibility that these interests may be best served
by the continued independence of the Corporation), taking into account, and
weighing as the Directors deem appropriate, the social and economic effects of
such action on present and future employees, suppliers, customers of the
Corporation and its subsidiaries (including account holders and borrowers of any
of the Corporation's subsidiaries), the effect upon communities in which offices
or other facilities of the Corporation are located, and the effect on the
Corporation's ability to fulfill its corporate obligations as a bank holding
company and on the ability of any of its subsidiary financial institutions to
fulfill the objectives of a financial institution under applicable statutes and
regulations, and any other factors the Directors consider pertinent.

         SECTION 7.08. AUTHORIZED BOARD ACTIONS. In furtherance and not in
limitation of the powers conferred by law or in these Articles of Incorporation,
as the same may, from time to time, be amended, the Board of Directors (and any
committee of the Board of Directors) is expressly authorized, to the extent
permitted by law, to take such action or actions as the Board or such committee
may determine to be reasonably necessary or desirable to (A) encourage any
person (as defined in Section 10.03, Clause 10.031 hereof) to enter into
negotiations with the Board of Directors and management of the Corporation with
respect to any transaction which may result in a change in control of the
Corporation which is proposed or initiated by such person or (B) contest or
oppose any such transaction which the Board of Directors or such committee
determines to be unfair, abusive or otherwise undesirable with respect to the
Corporation and its business, assets or properties or the Shareholders of the
Corporation, including, without limitation, the adoption of such plans or the
issuance of such rights, options, capital stock, notes, debentures or other
evidences of indebtedness or other securities of the Corporation (which issuance
may be with or without consideration, and may (but need not) be issued pro
rata), which rights, options, capital stock, notes, evidences of indebtedness
and other securities (i) may be exchangeable for or convertible into cash or
other securities on such terms and conditions as may be determined by the Board
or such committee and (ii) may provide for the treatment of any holder or class
of holders thereof designated by the Board of Directors or any such committee in
respect of the terms, conditions, provisions and rights of such securities which
is different from, and unequal to, the terms, conditions, provisions and rights
applicable to all other holders thereof.

         SECTION 7.09. AMENDMENT, REPEAL. Notwithstanding anything contained in
the Articles of Incorporation or the Code of By-Laws of the Corporation to the
contrary and notwithstanding that a lesser percentage or no vote may be
specified by law, but in addition to any affirmative vote of the
<PAGE>

holders of any particular class or series of capital stock of the Corporation
required by law or any Preferred Stock Designation, the affirmative vote of the
holders of at least 66 2/3% of the voting power of all of the then-outstanding
shares of Voting Stock, voting together as a single class, shall be required to
alter, amend, change or repeal this Article 7.

                                    ARTICLE 8
                                    DIRECTORS

         The names and post office addresses of the initial Board of Directors
of the Corporation are as follows:

- --------------------------------------------------------------------------------
               NAME                            POST OFFICE ADDRESS
- --------------------------------------------------------------------------------
Walter A. Bledsoe                        P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
B. Guille Cox, Jr.                       P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Thomas T. Dinkel                         P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Anton H. George                          P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Mari H. George                           P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Gregory L. Gibson                        P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Max L. Gibson                            P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Norman L. Lowery                         P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
William A. Niemeyer                      P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Patrick O'Leary                          P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808
- --------------------------------------------------------------------------------


<PAGE>

- --------------------------------------------------------------------------------
John W. Ragle                            P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Chapman J. Root, II                      P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Donald E. Smith                          P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------
Virginia L. Smith                        P.O. Box 540
                                         One First Financial Plaza
                                         Terre Haute, Indiana  47808

- --------------------------------------------------------------------------------

                                    ARTICLE 9

   PROVISIONS FOR REGULATION OF BUSINESS AND CONDUCT OF AFFAIRS OF CORPORATION


         SECTION 9.01. AMENDMENTS OF ARTICLES OF INCORPORATION. Except as
otherwise provided in Articles 7 and 10 hereof, the Corporation reserves the
right to increase or decrease the number of its authorized shares, or any class
or series thereof, and to reclassify the same, and to amend, alter, change or
repeal any provision contained in these Articles of Incorporation, or any
amendment hereto, or to add any provision to these Articles of Incorporation or
to any amendment hereto, in any manner now or hereafter prescribed or permitted
by the Act or any other applicable laws, and all rights and powers conferred
upon Shareholders, Directors and/or Officers in these Articles of Incorporation,
or any amendment hereto, are granted subject to this reserve power. No
Shareholder has a vested property right resulting from any provision in these
Articles of Incorporation, or any amendment hereto, or authorized to be in the
Code of By-Laws of the Corporation or these Articles of Incorporation by the
Act, including, without limitation, provisions relating to management, control,
capital structure, dividend entitlement, or purpose or duration of the
Corporation.

         SECTION 9.02. ACTION BY SHAREHOLDERS. Meetings of the Shareholders of
the Corporation shall be held at such place, within or without the State of
Indiana, as may be specified in the Code of By-Laws of the Corporation or in the
respective notices, or waivers of notice, thereof. Any action required or
permitted to be taken at any meeting of the Shareholders may be taken without a
meeting if a consent in writing setting forth the action so taken is signed by
all the Shareholders entitled to vote with respect thereto, and such written
consent is filed with the minutes of the proceedings of the Shareholders.

         SECTION 9.03. ACTION BY DIRECTORS. Meetings of the Board of Directors
of the Corporation or any committee thereof shall be held at such place, within
or without the State of Indiana, as may be specified in the Code of By-Laws of
the Corporation or in the respective notices, or waivers of notice, thereof. Any
action required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by all members of
the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of the proceedings of such Board or
committee.

         SECTION 9.04. PLACES OF KEEPING OF CORPORATE RECORDS. The Corporation
shall keep at its principal office a copy of (1) its Articles of Incorporation,
and all amendments thereto currently in effect; (2) its Code of By-Laws, and all
amendments thereto currently in effect; (3) minutes of all meetings of the
Shareholders and records of all actions taken by the Shareholders without a
meeting (collectively, "Shareholders Minutes") for the
<PAGE>

prior three years; (4) all written communications by the Corporation to the
Shareholders including the financial statements furnished by the Corporation to
the Shareholders ("Shareholder Communications") for the prior three years; (5) a
list of the names and business addresses of the current Directors and the
current Officers of the Corporation; and (6) the most recent Annual Report of
the Corporation as filed with the Secretary of State of Indiana. The Corporation
shall also keep and maintain at its principal office, or at such other place or
places within or without the State of Indiana as may be provided, from time to
time, in the Code of By-Laws, (1) minutes of all meetings of the Board of
Directors and of each committee of such Board, and records of all actions taken
by the Board of Directors and by each committee without a meeting; (2)
appropriate accounting records of the Corporation; (3) a record of the
Shareholders in a form that permits preparation of a list of the names and
addresses of all the Shareholders, in alphabetical order, stating the number of
shares held by each Shareholder; and (4) Shareholders Minutes for periods
preceding the prior three years. All of the records of the Corporation described
in this Section 9.04 (collectively, the "Corporate Records") shall be maintained
in written form or in another form capable of conversion into written form
within a reasonable time.

         SECTION 9.05.  LIMITATION OF LIABILITY AND RELIANCE ON CORPORATE
 RECORDS AND OTHER INFORMATION.

                  CLAUSE 9.051. GENERAL LIMITATION. No Director, member of any
         committee of the Board of Directors, or of another committee appointed
         by the Board, Officer, employee or agent of the Corporation ("Corporate
         Person") shall be liable for any loss or damage if, in taking or
         omitting to take any action causing such loss or damage, either (1)
         such Corporate Person acted (A) in good faith, (B) with the care an
         ordinarily prudent person in a like position would have exercised under
         similar circumstances, and (C) in a manner such Corporate Person
         reasonably believed was in the best interests of the Corporation, or
         (2) such Corporate Person's breach of or failure to act in accordance
         with the standards of conduct set forth in Clause 9.051 (1) above (the
         "Standards of Conduct") did not constitute willful misconduct or
         recklessness.

                  CLAUSE 9.052. RELIANCE ON CORPORATE RECORDS AND OTHER
         INFORMATION. Any "Corporate Person" shall be fully protected, and shall
         be deemed to have complied with the Standards of Conduct, in relying in
         good faith, with respect to any information contained therein, upon (1)
         the Corporate Records, or (2) information, opinions, reports or
         statements (including financial statements and other financial data)
         prepared or presented by (A) one or more other Corporate Persons whom
         such Corporate Person reasonably believes to be competent in the
         matters presented, (B) legal counsel, public accountants or other
         persons as to matters that such Corporate Person reasonably believes
         are within such person's professional or expert competence, (C) a
         committee of the Board of Directors or other committee appointed by the
         Board of Directors, of which such Corporate Person is not a member, if
         such Corporate Person reasonably believes such committee of the Board
         of Directors or such appointed committee merits confidence, or (D) the
         Board of Directors, if such Corporate Person is not a Director and
         reasonably believes that the Board merits confidence.

         SECTION 9.06. INTEREST OF DIRECTORS IN CONTRACTS. Any contractor other
transaction between the Corporation and (i) any Director, or (ii) any
corporation, unincorporated association, business trust, estate, partnership,
trust, joint venture, individual or other legal entity ("Legal Entity") (A) in
which any Director has a material financial interest or is a general partner, or
(B) of which any Director is a director, officer, or trustee (collectively, a
"Conflict Transaction"), shall be valid for all purposes, if the material facts
of the Conflict Transaction and the Director's interest were disclosed or known
to the Board of Directors, a committee of the Board of Directors with authority
to act thereon, or the Shareholders entitled to vote thereon, and the Board of
Directors, such committee or such Shareholders authorized, approved or ratified
the Conflict Transaction. A Conflict Transaction is authorized, approved or
ratified:

                 (1) By the Board of Directors or such committee, if it receives
         the affirmative vote of a majority of the Directors who have no
         interest in the Conflict Transaction, notwithstanding the fact that
         such majority may not constitute a quorum or a majority of the Board of
         Directors or such committee or a majority of the Directors present at
         the meeting, and notwithstanding the presence or vote of any Director
         who does have such an interest; provided, however, that no Conflict
         Transaction may be authorized, approved or ratified by a single
         Director; and
<PAGE>

                  (2) By such Shareholders, if it receives the vote of a
         majority of the shares entitled to be counted, in which vote shares
         owned or voted under the control of any Director who, or of any Legal
         Entity that, has an interest in the Conflict Transaction may be
         counted; provided, however, that a majority of such shares, whether or
         not present, shall constitute a quorum for the purpose of authorizing,
         approving or ratifying a Conflict Transaction.

         This Section 9.06 shall not be construed to require authorization,
ratification or approval by the Shareholders of any Conflict Transaction, or to
invalidate any Conflict Transaction, that would otherwise be valid under the
common and statutory law applicable thereto.

         SECTION 9.07. COMPENSATION OF DIRECTORS. The Board of Directors is
hereby specifically authorized, in and by the Code of By-Laws of the
Corporation, or by resolution duly adopted by such Board, to make provision for
reasonable compensation to its members for their services as Directors, and to
fix the basis and conditions upon which such compensation shall be paid. Any
Director of the Corporation may also serve the Corporation in any other capacity
and receive compensation therefor in any form.

         SECTION 9.08. DIRECTION OF PURPOSES AND EXERCISE OF POWERS BY
DIRECTORS. The Board of Directors, subject to any specific limitations or
restrictions imposed by the Act or these Articles of Incorporation, as the same
may, from time to time, be amended, shall direct the carrying out of the
purposes and exercise the powers of the Corporation, without previous
authorization or subsequent approval by the Shareholders of the Corporation.



<PAGE>


                                   ARTICLE 10
                  PROVISIONS FOR CERTAIN BUSINESS COMBINATIONS

         SECTION 10.01.  VOTE REQUIRED.

         CLAUSE 10.011. HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In
addition to any affirmative vote required by law or these Articles of
Incorporation, and except as otherwise expressly provided in Section 10.02 of
this Article 10:

                  1. any merger or consolidation of the Corporation or any
         Subsidiary (as hereinafter defined) with (A) any Interested Shareholder
         (as hereinafter defined), or (B) any other corporation (whether or not
         itself an Interested Shareholder) which is, or after such merger or
         consolidation would be, an Affi1iate (as hereinafter defined) of an
         Interested Shareholder; or

                  2. any sale, lease, exchange, mortgage, pledge, transfer or
         other disposition (in one transaction or a series of transactions) to
         or with any Interested Shareholder or any Affiliate of any Interested
         Shareholder, of any assets of the Corporation or any Subsidiary having
         an aggregate Fair Market Value equaling or exceeding 25% or more of the
         combined assets of the Corporation and its Subsidiaries; or

                  3. the issuance or transfer by the Corporation or any
         Subsidiary (in one transaction or a series of transactions) of any
         securities of the Corporation or any Subsidiary to any Interested
         Shareholder or any Affiliate of any Interested Shareholder in exchange
         for cash, securities or other property (or a combination thereof)
         having an aggregate Fair Market Value equaling or exceeding 25% of the
         combined assets of the Corporation and its Subsidiaries except pursuant
         to an employee benefit plan of the Corporation or any Subsidiary
         thereof; or

                  4. the adoption of any plan or proposal for the liquidation or
         dissolution of the Corporation proposed by or on behalf of an
         Interested Shareholder or any Affiliate of any Interested Shareholder;
         or

                  5. any reclassification of securities (including any reverse
         stock split) or recapitalization of the Corporation, or any merger or
         consolidation of the Corporation with any of its Subsidiaries or any
         other transaction (whether or not with or into or otherwise involving
         any Interested Shareholder) which has the effect, directly or
         indirectly, of increasing the proportionate share of the outstanding
         shares of any class or series of equity or convertible securities of
         the Corporation or any Subsidiary which is Beneficially Owned (as
         hereinafter defined) directly or indirectly by any Interested
         Shareholder or any Affiliate of any Interested Shareholder;

shall require the affirmative vote of the holders of at least 80% of the voting
power of all of the then-outstanding shares of Voting Stock, voting together as
a single class. Such affirmative vote shall be required notwithstanding that any
other provisions of these Articles of Incorporation, or any provision of law, or
any Preferred Stock Designation, or any agreement with any national securities
exchange or otherwise might otherwise permit a lesser vote or no vote.

         CLAUSE 10.012. DEFINITION OF "BUSINESS COMBINATION." The term "Business
Combination" as used in this Article 10 shall mean any transaction which is
referred to in any one or more of paragraphs (1) through (5) of Clause 10.011 of
this Section 10.01.

         SECTION 10.02. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of
Section 10.01 of this Article 10 shall not be applicable to any particular
Business Combination, and such Business Combination shall require only such
affirmative vote as is required by law, and any other provision of these
Articles of Incorporation, and any Preferred Stock Designation, if, in the case
of a Business Combination that does not involve any cash or other consideration
being received by the Shareholders of the Corporation, solely in their capacity
as Shareholders of the Corporation, the condition specified in the following
Clause 10.021 is met or, in the case of any other Business Combination, the
conditions specified in either of the following Clause 10.021 or 10.022 are met:
<PAGE>

         CLAUSE 10.021. APPROVAL BY CONTINUING DIRECTORS. The Business
Combination shall have been approved by a majority of the Continuing Directors
(as hereinafter defined); provided, however, that this condition shall not be
capable of satisfaction unless there are at least three Continuing Directors.

         CLAUSE 10.022.  PRICE AND PROCEDURE REQUIREMENTS. All of the following
conditions shall have been met:

                  1. The consideration to be received by holders of shares of a
         particular class (or series) of outstanding capital stock (including
         Common Stock) shall be in cash or in the same form as the Interested
         Shareholder or any of its Affiliates has previously paid for shares of
         such class (or series) of capital stock. If the Interested Shareholder
         or any of its Affiliates has paid for shares of any class (or series)
         of capital stock with varying forms of consideration, the form of
         consideration to be received per share by holders of shares of such
         class (or series) of capital stock shall be either cash or the form
         used to acquire the largest number of shares of such class (or series)
         of capital stock previously acquired by the Interested Shareholder.

                  2. The aggregate amount of (x) the cash and (y) the Fair
         Market Value as of the date (the "Consummation Date") of the
         consummation of the Business Combination, of the consideration other
         than cash to be received per share by holders of Common Stock in such
         Business Combination shall be at least equal to the higher of the
         following (in each case appropriately adjusted in the event of any
         stock dividend, stock split, combination of shares or similar event):

                           A. (if applicable) the highest per share price
                  (including any brokerage commissions, transfer taxes and
                  soliciting dealers' fees) paid by the Interested Shareholder
                  or any of its Affiliates for any shares of Common Stock
                  acquired by them within the two-year period immediately prior
                  to the date of the first public announcement of the proposal
                  of the Business Combination (the "Announcement Date") or in
                  any transaction in which the Interested Shareholder became an
                  Interested Shareholder, whichever is higher; and

                           B. The Fair Market Value per share of Common Stock on
                  the Announcement Date or on the date on which the Interested
                  Shareholder became an Interested Shareholder (the
                  "Determination Date"), whichever is higher.

                  3. The aggregate amount of (x) the cash and (y) the Fair
         Market Value, as of the Consummation Date, of the consideration other
         than cash to be received per share by holders of shares of any class
         (or series), other than Common Stock, of outstanding capital stock of
         the Corporation shall be at least equal to the highest of the following
         (in each case appropriately adjusted in the event of any stock
         dividend, stock split, combination of shares or similar event), it
         being intended that the requirements of this subparagraph (3) shall be
         required to be met with respect to every such class (or series) of
         outstanding capital stock whether or not the Interested Shareholder or
         any of its Affiliates has previously acquired any shares of a
         particular class (or series) of capital stock:

                          A. (if applicable) the highest per share price
                  (including any brokerage commissions, transfer taxes and
                  soliciting dealers' fees) paid by the Interested Shareholder
                  or any of its Affiliates for any shares of such class (or
                  series) of capital stock acquired by them within the two-year
                  period immediately prior to the Announcement Date or in any
                  transaction in which it became an Interested Shareholder,
                  whichever is higher;

                          B. the Fair Market Value per share of such class (or
                  series) of capital stock on the Announcement Date or on the
                  Determination Date, whichever is higher; and

                          C. (if applicable) the highest preferential amount per
                  share, if any, to which the holders of shares of such class
                  (or series) of capital stock would be entitled in the event of
                  any voluntary or involuntary liquidation, dissolution or
                  winding up of the Corporation.

                  4. After such Interested Shareholder has become an Interested
         Shareholder and prior to the
<PAGE>

         consummation of such Business Combination: (a) except as approved by a
         majority of the Continuing Directors, there shall have been no failure
         to declare and pay at the regular date therefor any full quarterly
         dividends (whether or not cumulative) on any outstanding Preferred
         Stock; (b) there shall have been (I) no reduction in the annual rate of
         dividends paid on the Common Stock (except as necessary to reflect any
         subdivision of the Common Stock), except as approved by a majority of
         the Continuing Directors, and (ii) an increase in such annual rate of
         dividends as necessary to reflect any reclassification (including any
         reverse stock split), recapitalization, reorganization or any similar
         transaction which has the effect of reducing the number of outstanding
         shares of the Common Stock, unless the failure so to increase such
         annual rate is approved by a majority of the Continuing Directors; and
         (c) neither such Interested Shareholder nor any of its Affiliates shall
         have become the beneficial owner of any additional shares of Voting
         Stock except as part of the transaction which results in such
         Interested Shareholder becoming an Interested Shareholder; provided,
         however, that no approval by Continuing Directors shall satisfy the
         requirements of this subparagraph (4) unless at the time of such
         approval there are at least three Continuing Directors.

                  5. After such Interested Shareholder has become an Interested
         Shareholder, such Interested Shareholder and any of its Affiliates
         shall not have received the benefit, directly or indirectly (except
         proportionately, solely in such Interested Shareholder's or Affiliate's
         capacity as a Shareholder of the Corporation), of any loans. advances,
         guarantees, pledges or other financial assistance or any tax credits or
         other tax advantages provided by the Corporation, whether in
         anticipation of or in connection with such Business Combination or
         otherwise.

                  6. A proxy or information statement describing the proposed
         Business Combination and complying with the requirements of the
         Securities Exchange Act of 1934, as amended, and the rules and
         regulations thereunder (or any subsequent provisions replacing such
         Act, rules or regulations) shall be mailed to all Shareholders of the
         Corporation at least 30 days prior to the consummation of such Business
         Combination (whether or not such proxy or information statement is
         required to be mailed pursuant to such Act or subsequent provisions).

                  7. Such Interested Shareholder shall have provided the
         Corporation with such information as shall have been requested pursuant
         to Section 10.05 of this Article 10 within the time period set forth
         therein.

         SECTION 10.03.  CERTAIN DEFINITIONS.  For the purposes of this Article
10:

         CLAUSE 10.031. A "person" shall include an individual, a group acting
in concert, a corporation, a partnership, an association, a joint venture, a
pool, a joint stock company, a trust, an unincorporated organization or similar
company, a syndicate or any other group formed for the purpose of acquiring,
holding or disposing of securities.

         CLAUSE 10.032. "Interested Shareholder" means any person (other than
the Corporation or any Subsidiary) who or which:

                  1. is the beneficial owner (as hereinafter defined), directly
         or indirectly, of ten percent or more of the voting power of the
         outstanding Voting Stock; or

                  2. is an Affiliate or an Associate of the Corporation and at
         any time within the two-year period immediately prior to the date in
         question was the beneficial owner, directly or indirectly, of ten
         percent or more of the voting power of the then outstanding Voting
         Stock; or

                  3. is an assignee of or has otherwise succeeded to any shares
         of Voting Stock which were at any time within the two-year period
         immediately prior to the date in question beneficially owned by any
         Interested Shareholder, if such assignment or succession shall have
         occurred in the course of a transaction or series of transactions not
         involving a public offering within the meaning of the Securities Act of
         1933, as amended.
<PAGE>

         CLAUSE 10.033. A person shall be a "beneficial owner" of, or shall
"Beneficially Own," any Voting Stock:

                  1. which such person or any of its Affiliates or Associates
         (as hereinafter defined) beneficially owns, directly or indirectly
         within the meaning of Rule 13d-3 under the Securities Exchange Act of
         1934, as in effect on April 16, 1997; or

                  2. which such person or any of its Affiliates or Associates
         has (a) the right to acquire (whether such right is exercisable
         immediately or only after the passage of time), pursuant to any
         agreement, arrangement or understanding or upon the exercise of
         conversion rights, exchange rights, warrants or options, or otherwise,
         or (b) the right to vote pursuant to any agreement, arrangement or
         understanding (but neither such person nor any such Affiliate or
         Associate shall be deemed to be the beneficial owner of any shares of
         Voting Stock solely by reason of a revocable proxy granted for a
         particular meeting of Shareholders, pursuant to a public solicitation
         of proxies for such meeting, and with respect to which shares neither
         such person nor any such Affiliate or Associate is otherwise deemed the
         beneficial owner); or

                  3. which are beneficially owned, directly or indirectly,
         within the meaning of Rule 13d-3 under the Securities Exchange Act of
         1934, as in effect on April 16, 1997, by any other person with which
         such person or any of its Affiliates or Associates has any agreement,
         arrangement or understanding for the purpose of acquiring, holding,
         voting (other than solely by reason of a revocable proxy as described
         in subparagraph (2) of this Clause 10.033) or disposing of any shares
         of Voting Stock; provided, however, that in the case of any employee
         stock ownership or similar plan of the Corporation or of any Subsidiary
         in which the beneficiaries thereof possess the right to vote any shares
         of Voting Stock held by such plan, no such plan nor any trustee with
         respect thereto (nor any Affiliate of such trustee), solely by reason
         of such capacity of such trustee, shall be deemed, for any purpose
         hereof, to beneficially own any shares of Voting Stock held under any
         such plan.

         CLAUSE 10.034. For the purposes of determining whether a person is an
Interested Shareholder pursuant to Clause 10.032 of this Section 10.03, the
number of shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of Clause 10.033 of this Section 10.03 but
shall not include any other unissued shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.

         CLAUSE 10.035. "Affiliate" or" Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on April 16,
1997.

         CLAUSE 10.036. "Subsidiary" means any corporation of which a majority
of any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Shareholder set forth in Clause 10.032 of this Section 10.03, the
term "Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the Corporation.

         CLAUSE 10.037. "Continuing Director" for purposes of this Article 10
means any member of the Board of Directors of the Corporation who is
unaffiliated with the Interested Shareholder and was a member of the Board prior
to the time that the Interested Shareholder became an Interested Shareholder,
and any director who is thereafter chosen to fill any vacancy on the Board of
Directors or who is elected and who, in either event, is unaffiliated with the
Interested Shareholder and in connection with his or her initial assumption of
office is recommended for appointment or election by a majority of Continuing
Directors then on the Board.

         CLAUSE 10.038. "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding the
date in question of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended, on which such stock is listed,
or, if
<PAGE>

such stock is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use, or if no
such quotations are available, the fair market value on the date in question of
a share of such stock as determined by the Board in accordance with Section
10.04 of this Article 10, in each case with respect to any class of stock,
appropriately adjusted for any dividend or distribution in shares of such stock
or any combination or reclassification of outstanding shares of such stock into
a smaller number of shares of such stock; and (ii) in the case of property other
than cash or stock, the fair market value of such property on the date in
question as determined by the Board in accordance with Section 10.04 of this
Article 10.

         CLAUSE 10.039. Reference to "highest per share price" shall in each
case with respect to any class of stock reflect an appropriate adjustment for
any dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such stock.

         CLAUSE 10.310. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be received"
as used in Clauses 10.022(2) and 10.022(3) of Section 10.02 of this Article 10
shall include the shares of Common Stock and/or the shares of any other class
(or series) of outstanding capital stock retained by the holders of such shares.

         SECTION 10.04. POWERS OF THE BOARD OF DIRECTORS. A majority of the
total number of Directors of the Corporation, but only if a majority of such
Directors shall then consist of Continuing Directors or, if a majority of the
total number of Directors shall not then consist of Continuing Directors, a
majority of the then Continuing Directors, shall have the power and duty to
determine, on the basis of information known to them after reasonable inquiry,
all facts necessary to determine compliance with this Article 10, including,
without limitation, (a) whether a person is an Interested Shareholder, (b) the
number of shares of Voting Stock beneficially owned by any person, (c) whether a
person is an Affiliate or Associate of another, (d) whether the applicable
conditions set forth in Clause 10.022 of Section 10.02 have been met with
respect to any Business Combination, (e) the Fair Market Value of stock or other
property in accordance with Clause 10.038 of Section 10.03 of this Article 10,
and (1) whether the assets which are the subject of any Business Combination
referred to in Clause 10.011 (2) of Section 10.01 have, or the consideration to
be received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination referred to in Clause 10.011(3) of
Section 10.01 has, an aggregate Fair Market Value equaling or exceeding 25% of
the combined assets of the Corporation and its Subsidiaries.

         SECTION 10.05. INFORMATION TO BE SUPPLIED TO THE CORPORATION. A
majority of the total number of Directors of the Corporation, but only if a
majority of such Directors shall then consist of Continuing Directors or, if a
majority of the total number of Directors shall not then consist of Continuing
Directors, a majority of the then Continuing Directors, shall have the right to
demand that any person who it is reasonably believed is an Interested
Shareholder (or holds of record shares of Voting Stock Beneficially Owned by any
Interested Shareholder) supply the Corporation with complete information as to
(i) the record owner(s) of all shares Beneficially Owned by such person who it
is reasonably believed is an Interested Shareholder, (ii) the number of, and
class or series of, shares Beneficially Owned by such person who it is
reasonably believed is an Interested Shareholder and held of record by each such
record owner and the number(s) of the stock certificate(s) evidencing such
shares, and (iii) any other factual matter relating to the applicability or
effect of this Article 10, as may be reasonably requested of such person, and
such person shall furnish such information within 10 days after receipt of such
demand.

         SECTION 10.06. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED
SHAREHOLDERS. Nothing contained in this Article 10 shall be construed to relieve
any Interested Shareholder from any fiduciary obligation imposed by law.

         SECTION 10.07. AMENDMENT, REPEAL, ETC. Notwithstanding any other
provisions of these Articles of Incorporation or the Code of By-Laws of the
Corporation to the contrary and notwithstanding that a lesser vote or no vote
may be specified by law, but in addition to any affirmative vote of the holders
of any particular class or series of the Corporation's capital stock required by
law or any Preferred Stock Designation, the affirmative vote of the holders of
at least 66 2/3 percent of the voting power of all of the then-outstanding
shares of Voting Stock, voting together as a single class, shall be required to
alter, amend or repeal this Article 10.
<PAGE>



                                   ARTICLE 11
                                 INDEMNIFICATION

        SECTION 11.01. GENERAL. The Corporation shall, to the fullest extent to
which it is empowered to do so by the Act, or any other applicable laws. as from
time to time in effect, indemnify any person who was or is a party. or is
threatened to be made a party, to any threatened, pending or completed action.
suit or proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal, by reason of the fact that he is or was a Director,
Officer, employee or agent of the Corporation, or who, while serving as such
Director. Officer, employee or agent of the Corporation. is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, whether for profit or not. against
expenses (including counsel fees), judgments, settlements, penalties and fines
(including excise taxes assessed with respect to employee benefit plans)
actually or reasonably incurred by him in accordance with such action, suit or
proceeding, if he acted in good faith and in a manner he reasonably believed, in
the case of conduct in his official capacity, was in the best interests of the
Corporation, and in all other cases, was not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, he
either had reasonable cause to believe his conduct was lawful or no reasonable
cause to believe his conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not meet the prescribed standard of conduct.

        SECTION 11.02. AUTHORIZATION OF INDEMNIFICATION. To the extent that a
Director, Officer, employee or agent of the Corporation has been successful, on
the merits or otherwise, in the defense of any action, suit or proceeding
referred to in Section 11.01 of this Article, or in the defense of any claim,
issue or matter therein, the Corporation shall indemnify such person against
expenses (including counsel fees) actually and reasonably incurred by such
person in connection therewith. Any other indemnification under Section 11.01 of
this Article (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case, upon a determination that indemnification of
the Director, Officer, employee or agent is permissible in the circumstances
because he has met the applicable standard of conduct. Such determination shall
be made (1) by the Board of Directors by a majority vote of a quorum consisting
of Directors who were not at the time parties to such action, suit or
proceeding; or (2) if a quorum cannot be obtained under subdivision (1), by a
majority vote of a committee duly designated by the Board of Directors (in which
designation Directors who are parties may participate), consisting solely of two
or more Directors not at the time parties to such action, suit or proceeding; or
(3) by special legal counsel: (A) selected by the Board of Directors or its
committee in the manner prescribed in subdivision (1) or (2), or (B) if a quorum
of the Board of Directors cannot be obtained under subdivision (1) and a
committee cannot be designated under subdivision (2), selected by a majority
vote of the full Board of Directors (in which selection Directors who are
parties may participate); or (4) by the Shareholders, but shares owned by or
voted under the control of Directors who are at the time parties to such action,
suit or proceeding may not be voted on the determination.

        Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under subsection (3)
to select counsel.

        SECTION 11.03. GOOD FAITH DEFINED. For purposes of any determination
under Section 11.01 of this Article 11, a person shall be deemed to have acted
in good faith and to have otherwise met the applicable standard of conduct set
forth in Section 11.01 if his action is based on information, opinions, reports,
or statements, including financial statements and other financial data, if
prepared or presented by (1) one or more Officers or employees of the
Corporation or another enterprise whom he reasonably believes to be reliable and
competent in the matters presented; (2) legal counsel, public accountants,
appraisers or other persons as to matters he reasonably believes are within the
person's professional or expert competence; or (3) a committee of the Board of
Directors of the Corporation or another enterprise of which the person is not a
member if he reasonably believes the committee merits confidence. The term
"another enterprise" as used in this Section 11.03 shall mean any other
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise of which such person is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee or agent. The
provisions


<PAGE>

of this Section 11.03 shall not be deemed to be exclusive or to limit in any way
the circumstances in which a person may be deemed to have met the applicable
standards of conduct set forth in Section 11.01 of this Article 11.

        SECTION 11.04. PAYMENT OF EXPENSES IN ADVANCE. Expenses incurred in
connection with any civil or criminal action, suit or proceeding may be paid for
or reimbursed by the Corporation in advance of the final disposition of such
action, suit or proceeding, as authorized in the specific case in the same
manner described in Section 11.02 of this Article, upon receipt of a written
affirmation of the Director, Officer, employee or agent's good faith belief that
he has met the standard of conduct described in Section 11.01 of this Article
and upon receipt of a written undertaking by or on behalf of the Director,
Officer, employee or agent to repay such amount if it shall ultimately be
determined that he did not meet the standard of conduct set forth in this
Article 11, and a determination is made that the facts then known to those
making the determination would not preclude indemnification under this Article
11.

        SECTION 11.05. PROVISIONS NOT EXCLUSIVE. The indemnification provided by
this Article shall not be deemed exclusive of any other rights to which a person
seeking indemnification may be entitled under these Articles of Incorporation,
the Corporation's Code of By-Laws, any resolution of the Board of Directors or
Shareholders, any other authorization, whenever adopted, after notice, by a
majority vote of all Voting Stock then outstanding, or any contract, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
Director, Officer, employee or agent, and shall inure to the benefit of the
heirs, executors and administrators of such a person.

        SECTION 11.06. VESTED RIGHT TO INDEMNIFICATION. The right of any
individual to indemnification under this Article shall vest at the time of
occurrence or performance of any event, act or omission giving rise to any
action, suit or proceeding of the nature referred to in Section 11.01 of this
Article 11 and, once vested, shall not later be impaired as a result of any
amendment, repeal, alteration or other modification of any or all of these
provisions. Notwithstanding the foregoing, the indemnification afforded under
this Article shall be applicable to all alleged prior acts or omissions of any
individual seeking indemnification hereunder, regardless of the fact that such
alleged acts or omissions may have occurred prior to the adoption of this
Article. To the extent such prior acts or omissions cannot be deemed to be
covered by this Article 11, the right of any individual to indemnification shall
be governed by the indemnification provisions in effect at the time of such
prior acts or omissions.

        SECTION 11.07. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a Director, Officer, employee or
agent of the Corporation, or who is or was serving at the request of the
Corporation as a director, officer, Partner, trustee, employee or agent of
another corporation, Partnership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against or incurred by the
individual in that capacity or arising from the individual's status as a
Director, Officer, employee or agent, whether or not the Corporation would have
power to indemnify the individual against the same liability under this Article
11.

        SECTION 11.08. ADDITIONAL DEFINITIONS. For purposes of this Article,
references to the "Corporation" shall include any domestic or foreign
predecessor entity of the Corporation in a merger or other transaction in which
the predecessor's existence ceased upon consummation of the transaction.

        For purposes of this Article, serving an employee benefit plan at the
request of the Corporation shall include any service as a Director, Officer,
employee or agent of the Corporation which imposes duties on or involves
services by such Director, Officer, employee, or agent with respect to an
employee benefit plan, its participants, or beneficiaries. A person who acted in
good faith and in a manner he reasonably believed to be in the best interests of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the Corporation"
referred to in this Article.

        For purposes of this Article, "party" includes any individual who is or
was a plaintiff, defendant or respondent in any action, suit or proceeding, or
who is threatened to be made a named defendant or respondent in any action, suit
or proceeding.

        For purposes of this Article, "official capacity," when used with
respect to a Director, shall mean the


<PAGE>

office of director of the Corporation; and when used with respect to an
individual other than a Director, shall mean the office in the Corporation held
by the Officer or the employment or agency relationship undertaken by the
employee or agent on behalf of the Corporation. "Official capacity" does not
include service for any other foreign or domestic corporation or any
partnership, joint venture, trust, employee benefit plan, or other enterprise,
whether for profit or not.

        SECTION 11.09. PAYMENTS A BUSINESS EXPENSE. Any payments made to any
indemnified party under this Article under any other right to indemnification
shall be deemed to be an ordinary and necessary business expense of the
Corporation, and payment thereof shall not subject any person responsible for
the payment, or the Board of Directors, to any action for corporate waste or to
any similar action.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(II)
<SEQUENCE>4
<FILENAME>c73127exv3wxiiy.txt
<DESCRIPTION>BY-LAWS
<TEXT>
<PAGE>



Exhibit 3(ii) By-laws of First Financial Corporation

                                 CODE OF BY-LAWS

                                       OF

                           FIRST FINANCIAL CORPORATION


                                    ARTICLE I
                                     OFFICES

        SECTION 1. Principal Office. The principal office (the "Principal
Office") of First Financial Corporation (the "Corporation") shall be at One
First Financial Plaza, P.O. Box 540, Terre Haute, Indiana 47808, or such other
place as shall be determined by resolution of the Board of Directors of the
Corporation (the "Board").

        SECTION 2. Other Offices. The Corporation may have such other offices at
such other places within or without the State of Indiana as the Board may from
time to time designate, or as the business of the Corporation may require.

                                   ARTICLE II
                                      SEAL

        SECTION 1. Corporate Seal. The corporate seal of the Corporation (the
"Seal") shall be circular in form and shall have inscribed thereon the words
"First Financial Corporation" and "INDIANA." In the center of the seal shall
appear the word "Seal." Use of the Seal or an impression thereof shall not be
required, and shall not affect the validity of any instrument whatsoever.

                                   ARTICLE III
                              SHAREHOLDER MEETINGS

        SECTION 1. Place of Meeting. Every meeting of the shareholders of the
Corporation (the "Shareholders") shall be held at the Principal Office, unless a
different place is specified in the

notice or waiver of notice of such meeting or by resolution of the Board or the
Shareholders, in which event such meeting may be held at the place so specified,
either within or without the State of Indiana.

        SECTION 2. Annual Meeting. The annual meeting of the Shareholders (the
"Annual Meeting") shall be held each year at 11:00 A.M. on the third Wednesday
in April (or, if such day is a legal holiday, on the next succeeding day not a
legal holiday), for the purpose of electing directors of the Corporation
("Directors") and for the transaction of such other business as may legally come
before the Annual Meeting. If for any reason the Annual Meeting shall not be
held at the date and time herein provided, the same may be held at any time
thereafter, or the business to be transacted at such Annual Meeting may be
transacted at any special meeting of the Shareholders (a "Special Meeting")
called for that purpose.

        SECTION 3. Notice of Annual Meeting. Written or printed notice of the
Annual Meeting, stating the date, time and place thereof, shall be delivered or
mailed by the Secretary or an Assistant Secretary


<PAGE>

to each Shareholder of record entitled to notice of such Meeting, at such
address as appears on the records of the Corporation, at least ten and not more
than sixty days before the date of such Meeting.

        SECTION 4. Special Meetings. Special Meetings, for any purpose or
purposes (unless otherwise prescribed by law), may be called by only the
Chairman of the Board of Directors (the "Chairman"), if any, or by the Board,
pursuant to a resolution adopted by a majority of the total number of Directors
of the Corporation, to vote on the business proposed to be transacted thereat.
All requests for Special Meetings shall state the purpose or purposes thereof,
and the business transacted at such Meeting shall be confined to the purposes
stated in the call and matters germane thereto.

        SECTION 5. Notice of Special Meetings. Written or printed notice of all
Special Meetings, stating the date, time, place and purpose or purposes thereof,
shall be delivered or mailed by the Secretary or the President or any Vice
President calling the Meeting to each Shareholder of record entitled to notice
of such Meeting, at such address as appears on the records of the Corporation,
at least ten and not more than sixty days before the date of such Meeting.

        SECTION 6. Waiver of Notice of Meetings. Notice of any Annual or Special
Meeting (a "Meeting") may be waived in writing by any Shareholder, before or
after the date and time of the Meeting specified in the notice thereof, by a
written waiver delivered to the Corporation for inclusion in the minutes or
filing with the corporate records. A Shareholder's attendance at any Meeting in
person or by proxy shall constitute a waiver of (a) notice of such Meeting,
unless the Shareholder at the beginning of the Meeting objects to the holding of
or the transaction of business at the Meeting, and (b) consideration at such
Meeting of any business that is not within the purpose or purposes described in
the Meeting notice, unless the Shareholder objects to considering the matter
when it is presented.

        SECTION 7. Quorum. At any Meeting, the holders of a majority of the
voting power of all shares of the Corporation (the "Shares") issued and
outstanding and entitled to vote at such Meeting, represented in person or by
proxy, shall constitute a quorum for the election of Directors or for the
transaction of other business, unless otherwise provided by law, the Articles of
Incorporation of the Corporation, as the same may, from time to time be amended
(the "Articles"), or this Code of By-Laws, as the same may, from time to time,
be amended (these "By-Laws."). If, however, a quorum shall not be present or
represented at any Meeting, the Shareholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the Meeting from
time to time, without notice other than announcement at the Meeting of the date,
time and place of the adjourned Meeting, unless the date of the adjourned
Meeting requires that the Board fix a new record date (the "Record Date")
therefor, in which case notice of the adjourned Meeting shall be given. At such
adjourned Meeting, if a quorum shall be present or represented, any business may
be transacted that might have been transacted at the Meeting as originally
scheduled.

        SECTION 8. Voting. At each Meeting, every Shareholder entitled to vote
shall have one vote for each Share standing in his name on the books of the
Corporation as of the Record Date fixed by the Board for such Meeting, except as
otherwise provided by law or the Articles, and except that no Share shall be
voted at any Meeting upon which any installment is due and unpaid. Voting for
Directors and, upon the demand of any Shareholder, voting upon any question
properly before a Meeting, shall be by ballot. A plurality vote shall be
necessary to elect any Director, and on all other matters, the action or a
question shall be approved if the number of votes cast thereon in favor of the
action or question exceeds the number of votes cast opposing the action or
question, except as otherwise provided by law or the Articles.

        SECTION 9. Shareholder List. The Secretary shall prepare before each
Meeting a complete list of the Shareholders entitled to notice of such Meeting,
arranged in alphabetical order by class of Shares


<PAGE>

(and each series within a class), and showing the address of, and the number of
Shares entitled to vote held by, each Shareholder (the "Shareholder List").
Beginning five business days before the Meeting and continuing throughout the
Meeting, the Shareholder List shall be on file at the Principal Office or at a
place identified in the Meeting notice in the city where the Meeting will be
held, and shall be available for inspection by any Shareholder entitled to vote
at the Meeting. On written demand, made in good faith and for a proper purpose
and describing with reasonable particularity the Shareholder's purpose, and if
the Shareholder List is directly connected with the Shareholder's purpose, a
Shareholder (or such Shareholder's agent or attorney authorized in writing)
shall be entitled to inspect and to copy the Shareholder List, during regular
business hours and at the Shareholder's expense, during the period the
Shareholder List is available for inspection. The original stock register or
transfer book (the "Stock Book"), or a duplicate thereof kept in the State of
Indiana, shall be the only evidence as to who are the Shareholders entitled to
examine the Shareholder List. or to notice of or to vote at any Meeting.

        SECTION 10. Proxies. A Shareholder may vote either in person or by proxy
executed in writing by the Shareholder or a duly authorized attorney-in-fact. No
proxy shall be valid after eleven months from the date of its execution, unless
a shorter or longer time is expressly provided therein.

        SECTION 11. Notice of Shareholder Business. At an Annual Meeting of the
Shareholders, only such business shall be conducted as shall have been properly
brought before the Meeting. To be properly brought before an Annual Meeting,
business must be (a) specified in the notice of Meeting (or any supplement
thereto) given by or at the direction of the Board, (b) otherwise properly
brought before the Meeting by or at the direction of the Board, or (c) otherwise
properly brought before the Meeting by a Shareholder. For business to be
properly brought before an Annual Meeting by a Shareholder, the Shareholder must
have the legal right and authority to make the Proposal for consideration at the
Meeting and the Shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a Shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation. not less than 120 days prior to the Meeting; provided, however,
that in the event that less than 130 days' notice or prior public disclosure of
the date of the Meeting is given or made to Shareholders (which notice or public
disclosure shall include the date of the Annual Meeting specified in these
By-Laws, if such By-Laws have been filed with the Securities and Exchange
Commission and if the Annual Meeting is held on such date), notice by the
Shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the Annual Meeting was mailed or such public disclosure was made. A
Shareholder's notice to the Secretary shall set forth as to each matter the
Shareholder proposes to bring before the Annual Meeting (a) a brief description
of the business desired to be brought before the Annual Meeting and the reasons
for conducting such business at the Annual Meeting, (b) the name and record
address of the Shareholders proposing such business, (c) the class and number of
shares of the Corporation which are beneficially owned by the Shareholder, and
(d) any material interest of the Shareholder in such business. Notwithstanding
anything in these By-Laws to the contrary, no business shall be conducted at an
Annual Meeting except in accordance with the procedures set forth in this
Section 11. The Chairman of an Annual Meeting shall, if the facts warrant,
determine and declare to the Meeting that business was not properly brought
before the Meeting and in accordance with the provisions of this Section 11, and
if he should so determine, he shall so declare to the Meeting and any such
business not properly brought before the Meeting shall not be transacted. At any
Special Meeting of the Shareholders, only such business shall be conducted as
shall have been brought before the Meeting by or at the direction of the Board
of Directors.

        SECTION 12. Notice 0f Shareholder Nominees. Only persons who are
nominated in accordance with the procedures set forth in this Section 12 shall
be eligible for election as Directors. Nominations of persons for election to
the Board may be made at a Meeting of Shareholders by or at the direction of the
Board of Directors, by any nominating committee or person appointed by the Board
of Directors or by


<PAGE>

any Shareholder of the Corporation entitled to vote for the election of
Directors at the Meeting who complies with the notice procedures set forth in
this Section 12. Such nominations, other than those made by or at the direction
of the Board, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a Shareholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 120 days prior to the Meeting; provided, however, that
in the event that less than 130 days' notice or prior public disclosure of the
date of the Meeting is given or made to Shareholders (which notice or public
disclosure shall include the date of the Annual Meeting specified in these
By-Laws, if such By-Laws have been filed with the Securities and Exchange
Commission and if the Annual Meeting is held on such date), notice by the
Shareholders to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the Meeting was mailed or such public disclosure was made. Such Shareholder's
notice shall set forth (a) as to each person whom the Shareholder proposes to
nominate for election or re-election as a Director, (i) the name, age, business
address and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of the
Corporation which are beneficially owned by such person and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including without limitation such person's written consent to being
named in the proxy statement as a nominee and to serving as a Director if
elected); and (b) as to the Shareholder giving the notice (i) the name and
record address of such Shareholder and (ii) the class and number of shares of
the Corporation which are beneficially owned by such Shareholder. No person
shall be eligible for election as a Director of the Corporation unless nominated
in accordance with the procedures set forth in this Section 12. The Chairman of
the Meeting shall, if the facts warrant, determine and declare to the Meeting
that a nomination was not made in accordance with the procedures prescribed by
these By-Laws, and if he should so determine, he shall so declare to the Meeting
and the defective nomination shall be disregarded.

                                   ARTICLE IV
                               BOARD OF DIRECTORS

        SECTION 1. Number. The business and affairs of the Corporation shall be
managed by a Board of not less than five (5) nor more than twenty (20)
Directors, as may be specified from time to time by resolution adopted by a
majority of the total number of the Corporation's Directors, divided into three
classes as provided in the Articles. If and whenever the Board of Directors has
not specified the number of Directors, the number shall be fourteen. The Board
may elect or appoint, from among its members, a Chairman of the Board (the
"Chairman") and a Vice Chairman of the Board (the "Vice Chairman"), neither of
whom need not be an officer (an "Officer") or employee of the Corporation. The
Chairman, if elected or appointed, shall preside at all Shareholder Meetings and
Board Meetings and shall have such other powers and perform such other duties as
are incident to such position and as may be assigned by the Board. The Vice
Chairman shall perform such duties when the Chairman is absent.

        SECTION 2. Vacancies and Removal. Any vacancy occurring in the Board
shall be filled as provided in the Articles. Shareholders shall be notified of
any increase in the number of Directors and the name, principal occupation and
other pertinent information about any Director elected by the Board to fill any
vacancy. Any Director, or the entire Board, may be removed from office only as
provided in the Articles.

        SECTION 3. Powers and Duties. In addition to the powers and duties
expressly conferred upon it by law, the Articles or these By-Laws, the Board may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not inconsistent with the law, the Articles or these By-Laws.

<PAGE>

        SECTION 4. Annual Board Meeting. Unless otherwise determined by the
Board, the Board shall meet each year immediately after the Annual Meeting, at
the place where such Meeting has been held, for the purpose of organization,
election of Officers of the Corporation (the "Officers") and consideration of
any other business that may properly be brought before such annual meeting of
the Board (the "Annual Board Meeting"). No notice shall be necessary for the
holding of the Annual Board Meeting. If the Annual Board Meeting is not held as
above provided, the election of Officers may be held at any subsequent duly
constituted meeting of the Board (a "Board Meeting").

        SECTION 5. Regular Board Meetings. Regular meetings of the Board
("Regular Board Meetings") may be held at stated times or from time to time, and
at such place, either within or without the State of Indiana, as the Board may
determine, without call and without notice.

        SECTION 6. Special Board Meetings. Special meetings of the Board
("Special Board Meetings") may be called at any time or from time to time, and
shall be called on the written request of at least two Directors, by the
Chairman or the President, by causing the Secretary or any Assistant Secretary
to give to each Director, either personally or by mail, telephone, telegraph,
teletype or other form of wire or wireless communication at least two days'
notice of the date, time and place of such Meeting. Special Board Meetings shall
be held at the Principal Office or at such other place, within or without the
State of Indiana, as shall be specified in the respective notices or waivers of
notice thereof.

        SECTION 7. Waiver of Notice and Assent. A Director may waive notice of
any Board Meeting before or after the date and time of the Board Meeting stated
in the notice by a written waiver signed by the Director and filed with the
minutes or corporate records. A Director's attendance at or participation in a
Board Meeting shall constitute a waiver of notice of such Meeting and assent to
any corporate action taken at such Meeting, unless (a) the Director at the
beginning of such Meeting (or promptly upon his arrival) objects to holding of
or transacting business at the Meeting and does not thereafter vote for or
assent to action taken at the Meeting; (b) the Director's dissent or abstention
from the action taken is entered in the minutes of such Meeting; or (c) the
Director delivers written notice of his dissent or abstention to the presiding
Director at such Meeting before its adjournment, or to the Secretary immediately
after its adjournment. The right of dissent or abstention is not available to a
Director who votes in favor of the action taken.

        SECTION 8. Quorum. At all Board Meetings, a majority of the number of
Directors designated for the full Board (the "Full Board") shall be necessary to
constitute a quorum for the transaction of any business, except (a) that for the
purpose of filling of vacancies a majority of Directors then in office shall
constitute a quorum, and (b) that a lesser number may adjourn the Meeting from
time to time until a quorum is present. The act of a majority of the Board
present at a Meeting at which a quorum is present shall be the act of the Board,
unless the act of a greater number is required by law, the Articles or these
By-Laws.

        SECTION 9. Audit and Other Committees of the Board. The Board shall, by
resolution adopted by a majority of the Full Board, designate an Audit Committee
comprised of two or more Directors, which shall have such authority and exercise
such duties as shall be provided by resolution of the Board. The Board may, by
resolution adopted by such majority, also designate other regular or special
committees of the Board ("Committees"), in each case comprised of two or more
Directors and to have such powers and exercise such duties as shall be provided
by resolution of the Board.

        SECTION 10. Resignations. Any Director may resign at any time by giving
written notice to the Board, the Chairman, the President or the Secretary. Any
such resignation shall take effect when delivered unless the notice specifies a
later effective date. Unless otherwise specified in the notice, the acceptance
of such resignation shall not be necessary to make it effective.

<PAGE>


                                    ARTICLE V
                                    OFFICERS

        SECTION 1. Officers. The Officers shall be the President, the Secretary
and the Treasurer, and may include one or more Assistant Secretaries, one or
more Vice Presidents, one or more Assistant Treasurers, a Controller, one or
more Assistant Controllers, and a Chief Credit Officer. Any two or more offices
may be held by the same person. The Board may from time to time elect or appoint
such other Officers as it shall deem necessary, who shall exercise such powers
and perform such duties as may be prescribed from time to time by these By-Laws
or, in the absence of a provision in these By-Laws in respect thereto, as may be
prescribed from time to time by the Board.

        SECTION 2. Election of Officers. The Officers shall be elected by the
Board at the Annual Board Meeting and shall hold office for one year or until
their respective successors shall have been duly elected and shall have
qualified; provided, however, that the Board may at any time elect one or more
persons to new or different offices and/or change the title, designation and
duties and responsibilities of any of the Officers consistent with the law, the
Articles and these By-Laws.

        SECTION 3. Vacancies; Removal. Any vacancy among the Officers may be
filled for the unexpired term by the Board. Any Officer may be removed at any
time by the affirmative vote of a majority of the Full Board.

        SECTION 4. Delegation of Duties. In the case of the absence, disability,
death, resignation or removal from office of any Officer, or for any other
reason that the Board shall deem sufficient, the Board may delegate. for the
time being, any or all of the powers or duties of such Officer to any other
Officer or to any Director.

        SECTION 5. President. The President shall be a Director and, subject to
the control of the Board, shall have general charge of and supervision and
authority over the business and affairs of the Corporation, and shall have such
other powers and perform such other duties as are incident to this office and as
may be assigned to him by the Board. In the case of the absence or disability of
the Chairman or if no Chairman shall be elected or appointed by the Board, the
President shall preside at all Shareholder Meetings and Board Meetings.

        SECTION 6. Vice Presidents. Each of the Vice Presidents, if any, shall
have such powers and perform such duties as may be prescribed for him by the
Board or delegated to him by the President. In the case of the absence,
disability, death, resignation or removal from office of the President, the
powers and duties of the President shall, for the time being, devolve upon and
be exercised by the Executive Vice President, if there be one, and if not, then
by such one of the Vice Presidents as the Board or the President may designate,
or, if there be but one Vice President, then upon such Vice President; and he
shall thereupon, during such period, exercise and perform all of the powers and
duties of the President, except as may be otherwise provided by the Board.

        SECTION 7. Secretary. The Secretary shall have the custody and care of
the Seal, records, minutes and the Stock Book of the Corporation; shall attend
all Shareholder Meetings and Board Meetings, and duly record and keep the
minutes of their proceedings in a book or books to be kept for that purpose;
shall give or cause to be given notice of all Shareholder Meetings and Board
Meetings when such notice shall be required; shall file and take charge of all
papers and documents belonging to the Corporation; and shall have such other
powers and perform such other duties as are incident to the office of secretary
of a business corporation, subject at all times to the direction and control of
the Board and the President.

<PAGE>

        SECTION 8. Assistant Secretaries. Each of the Assistant Secretaries, if
any, shall assist the Secretary in his duties and shall have such other powers
and perform such other duties as may be prescribed for him by the Board or
delegated to him by the President. In case of the absence, disability, death,
resignation or removal from office of the Secretary, his powers and duties
shall, for the time being, devolve upon such one of the Assistant Secretaries as
the Board, the President or the Secretary may designate, or, if there be but one
Assistant Secretary, then upon such Assistant Secretary; and he shall thereupon,
during such period, exercise and perform all of the powers and duties of the
Secretary, except as may be otherwise provided by the Board.

        SECTION 9. Treasurer. The Treasurer shall have control over all records
of the Corporation pertaining to moneys and securities belonging to the
Corporation; shall have charge of, and be responsible for, the collection,
receipt, custody and disbursements of funds of the Corporation; shall have the
custody of all securities belonging to the Corporation; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation; and shall disburse the funds of the Corporation as may be ordered
by the Board, taking proper receipts or making proper vouchers for such
disbursements and preserving the same at all times during his term of office.
When necessary or proper, he shall endorse on behalf of the Corporation all
checks, notes or other obligations payable to the Corporation or coming into his
possession for or on behalf of the Corporation, and shall deposit the funds
arising therefrom, together with all other funds and valuable effects of the
Corporation coming into his possession, in the name and the credit of the
Corporation in such depositories as the Board from time to time shall direct or
in the absence of such action by the Board, as may be determined by the
President or any Vice President. If the Board has not elected a Controller or an
Assistant Controller, or in the absence or disability of the Controller and each
Assistant Controller or if, for any reason, a vacancy shall occur in such
offices, then during such period the Treasurer shall have, exercise and perform
all of the powers and duties of the Controller. The Treasurer shall also have
such other powers and perform such other duties as are incident to the office of
treasurer of a business corporation, subject at all times to the direction and
control of the Board and the President.

        If required by the Board, the Treasurer shall give the Corporation a
bond, in such an amount and with such surety or sureties as may be ordered by
the Board, for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.

        SECTION 10. Assistant Treasurers. Each of the Assistant Treasurers, if
any, shall assist the Treasurer in his duties, and shall have such other powers
and perform such other duties as may be prescribed for him by the Board or
delegated to him by the President. In case of the absence, disability, death,
resignation or removal from office of the Treasurer, his powers and duties
shall, for the time being, devolve upon such one of the Assistant Treasurers as
the Board, the President or the Treasurer may designate, or, if there be but one
Assistant Treasurer, then upon such Assistant Treasurer; and he shall thereupon,
during such period, exercise and perform all the powers and duties of the
Treasurer except as may be otherwise provided by the Board. If required by the
Board, each Assistant Treasurer shall likewise give the Corporation a bond, in
such amount and with such surety or sureties as may be ordered by the Board, for
the same purposes as the bond that may be required to be given by the Treasurer.

        SECTION 11. Controller. The Controller, if any, shall have direct
control over all accounting records of the Corporation pertaining to moneys,
properties, materials and supplies, including the bookkeeping and accounting
departments; shall have direct supervision over the accounting records in all
other departments pertaining to moneys, properties, materials and supplies;
shall render to the


<PAGE>

President and the Board, at Regular Board Meetings or whenever the same shall be
required, an account of all his transactions as Controller and of the financial
condition of the Corporation; and shall have such other powers and perform such
other duties as are incident to the office of Controller of a business
corporation, subject at all times to the direction and control of the Board and
the President.

        SECTION 12. Assistant Controllers. Each of the Assistant Controllers, if
any, shall assist the Controller in his duties, and shall have such other powers
and perform such other duties as may be prescribed for him by the Board or
delegated to him by the President. In case of the absence, disability, death,
resignation or removal from office of the Controller, his powers and duties
shall, for the time being, devolve upon such one of the Assistant Controllers as
the Board, the President or the Controller may designate, or, if there be but
one Assistant Controller, then upon such Assistant Controller; and he shall
thereupon, during such period, exercise and perform all the powers and duties of
the Controller, except as may be otherwise provided by the Board.

        SECTION 13. Chief Credit Officer. The Chief Credit Officer shall have
control over all lending operations of the Corporation and shall have such other
powers and perform such other duties as are incident to the Office of Chief
Credit Officer of a business corporation, subject at all times to the direction
and control of the Board and the President.

                                   ARTICLE VI
                             CERTIFICATES FOR SHARES

        SECTION 1. Certificates. Certificates for Shares ("Certificates") shall
be in such form, consistent with law and the Articles, as shall be approved by
the Board. Certificates for each class, or series within a class, of Shares,
shall be numbered consecutively as issued. Each Certificate shall state the name
of the Corporation and that it is organized under the laws of the State of
Indiana; the name of the registered holder; the number and class and the
designation of the series, if any, of the Shares represented thereby; and a
summary of the designations, relative rights, preferences and limitations
applicable to such class and, if applicable, the variations in rights,
preferences and limitations determined for each series and the authority of the
Board to determine such variations for future series; provided, however, that
such summary may be omitted if the Certificate states conspicuously on its front
or back that the Corporation will furnish the Shareholder such information upon
written request and without charge. Each Certificate shall be signed (either
manually or in facsimile) by (i) the President or a Vice President and (ii) the
Secretary or an Assistant Secretary, or by any two or more Officers that may be
designated by the Board, and may have affixed thereto the Seal, which may be a
facsimile, engraved or printed.

        SECTION 2. Record of Certificates. Shares shall be entered in the Stock
Book as they are issued, and shall be transferable on tt1e Stock Book by the
holder thereof in person, or by his attorney duly authorized thereto in writing,
upon the surrender of the outstanding Certificate therefor properly endorsed.

        SECTION 3. Lost or Destroyed Certificates. Any person claiming a
Certificate to be lost or destroyed shall make affidavit or affirmation of that
fact and, if the Board or the President shall so require, shall give the
Corporation and/or the transfer agents and registrars, if they shall so require,
a bond of indemnity, in form and with one or more sureties satisfactory to the
Board or the President and/or the transfer agents and registrars, in such amount
as the Board or the President may direct and/or the transfer agents and
registrars may require, whereupon a new Certificate may be issued of the same
tenor and for the same number of Shares as the one alleged to be lost or
destroyed.

        SECTION 4. Shareholder Addresses. Every Shareholder shall furnish the
Secretary with an address to which notices of Meetings and all other notices may
be served upon him or mailed to him,



<PAGE>

and in default thereof notices may be addressed to him at his last known address
or at the Principal Office.

                                   ARTICLE VII
                           CORPORATE BOOKS AND RECORDS

        SECTION 1. Places of Keeping. Except as otherwise provided by law, the
Articles or these By-Laws, the books and records of the Corporation (including
the "Corporate Records," as defined in the Articles) may be kept at such place
or places, within or without die State of Indiana, as the Board may from time to
time by resolution determine or, in the absence of such determination by the
Board, as shall be determined by the President.

        SECTION 2. Stock Book. The Corporation shall keep at the Principal
Office the original Stock Book or a duplicate thereof, or, in case the
Corporation employs a stock registrar or transfer agent within or without the
State of Indiana, another record of the Shareholders in a form that permits
preparation of a list of the names and addresses of all the Shareholders, in
alphabetical order by class of Shares, stating the number and class of Shares
held by each Shareholder (the "Record of Shareholders").

        SECTION 3. Inspection of Corporate Records. Any Shareholder (or the
Shareholder's agent or attorney authorized in writing) shall be entitled to
inspect and copy at his expense, after giving the Corporation at least five
business days' written notice of his demand to do so, the following Corporate
Records: (1) the Articles; (2) these By-Laws; (3) minutes of all Shareholder
Meetings and records of all actions taken by the Shareholders without a meeting
(collectively, "Shareholders Minutes") for the prior three years; (4) all
written communications by the Corporation to the Shareholders including the
financial statements furnished by the Corporation to the Shareholders for the
prior three years; (5) a list of the names and business addresses of the current
Directors and the current Officers; and (6) the most recent Annual Report of the
Corporation as filed with the Secretary of State of Indiana. Any Shareholder (or
the Shareholder's agent or attorney authorized in writing) shall also be
entitled to inspect and copy at his expense, after giving the Corporation at
least five business days' written notice of his demand to do so, the following
Corporate Records, if his demand is made in good faith and for a proper purpose
and describes with reasonable particularity his purpose and the records he
desires to inspect, and the records are directly connected with his purpose: (1)
to the extent not subject to inspection under the previous sentence,
Shareholders Minutes, excerpts from minutes of Board Meetings and of Committee
meetings, and records of any actions taken by the Board or any Committee without
a meeting; (2) appropriate accounting records of the Corporation; and (3) the
Record of Shareholders.

        SECTION 4. Record Date. The Board may, in its discretion, fix in advance
a Record Date not more than seventy days before the date (a) of any Shareholder
Meeting, (b) for the payment of any dividend or the making of any other
distribution, (c) for the allotment of rights, or (d) when any change or
conversion or exchange of Shares shall go into effect. If the Board fixes a
Record Date, then only Shareholders who are Shareholders of record on such
Record Date shall be entitled (a) to notice of and/or to vote at any such
Meeting, (b) to receive any such dividend or other distribution, (c) to receive
any such allotment of rights, or (d) to exercise the rights in respect of any
such change, conversion or exchange of Shares, as the case may be,
notwithstanding any transfer of Shares on the Stock Book after such Record Date.

        SECTION 5. Transfer Agents; Registrars. The Board may appoint one or
more transfer agents and registrars for its Shares and may require all
Certificates to bear the signature either of a transfer agent or of a registrar,
or both.


<PAGE>
                                  ARTICLE VIII
                    CHECKS, DRAFTS, DEEDS AND SHARES OF STOCK

        SECTION 1. Checks, Drafts, Notes, Etc. All checks, drafts, notes or
orders for the payment of money of the Corporation shall, unless otherwise
directed by the Board or otherwise required by law, be signed by one or more
Officers as authorized in writing by the President. In addition, the President
may authorize any one or more employees of the Corporation ("Employees") to sign
checks, drafts and orders for the payment of money not to exceed specific
maximum amounts as designated in writing by the President for any one check,
draft or order. When so authorized by the President, the signature of any such
Officer or Employee may be a facsimile signature.

        SECTION 2. Deeds, Notes, Bonds, Mortgages, Contracts, Etc. All deeds,
notes, bonds and mortgages made by the Corporation, and all other written
contracts and agreements, other than those executed in the ordinary course of
corporate business, to which the Corporation shall be a party, shall be executed
in its name by the President, a Vice President or any other Officer so
authorized by the Board and, when necessary or required, the Secretary or an
Assistant Secretary shall attest the execution thereof. All written contracts
and agreements into which the Corporation enters in the ordinary course of
corporate business shall be executed by any Officer or by any other Employee
designated by the President or a Vice President to execute such contracts and
agreements.

        SECTION 3. Sale or Transfer of Stock. Subject always to the further
orders and directions of the Board, any share of stock issued by any corporation
and owned by the Corporation (including reacquired Shares of the Corporation)
may, for sale or transfer, be endorsed in the name of the Corporation by the
President or a Vice President, and said endorsement shall be duly attested by
the Secretary or an Assistant Secretary either with or without affixing thereto
the Seal.

        SECTION 4. Voting of Stock of Other Corporations. Subject always to the
further orders and directions of the Board, any share of stock issued by any
other corporation and owned or controlled by the Corporation (an "Investment
Share") may be voted at any shareholders' meeting of such other corporation by
the President or by a Vice President. Whenever, in the judgment of the
President, it is desirable for the Corporation to execute a proxy or give a
shareholder's consent in respect of any Investment Share, such proxy or consent
shall be executed in the name of the Corporation by the President or a Vice
President, and, when necessary or required, shall be attested by the Secretary
or an Assistant Secretary either with or without affixing thereto the Seal. Any
person or persons designated in the manner above stated as the proxy or proxies
of the Corporation shall have. full right, power and authority to vote an
Investment Share the same as such Investment Share might be voted by the
Corporation.

                                   ARTICLE IX
                                   FISCAL YEAR

        SECTION 1. Fiscal Year. The Corporation's fiscal year shall begin on
January 1 of each year and end on December 31 of the same year.

                                    ARTICLE X
                                   AMENDMENTS

        SECTION 1. Amendments. These By-Laws may be altered, amended or
repealed, in whole or in part, and new By-Laws may be adopted, at any Board
Meeting by the affirmative vote of a majority of the Full Board.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>c73127exv10w1.txt
<DESCRIPTION>DEFERRED COMPENSATION AGREEMENT
<TEXT>
<PAGE>

Exhibit 10.1 Deferred Compensation Agreement and Split Dollar Insurance
Agreement for Donald E. Smith


                         DEFERRED COMPENSATION AGREEMENT

        THIS AGREEMENT made and entered into as of the 22nd day of December,
1994, by and between DONALD E. SMITH ("EMPLOYEE"), the Employee's wife, MARY
FRANCES SMITH ("Wife") and TERRE HAUTE FIRST NATIONAL BANK and FIRST FINANCIAL
CORPORATION (collectively "Employers").

        WITNESSETH THAT:

        WHEREAS, Employee has been employed by Employers for several years and
is now the President and Chief Executive Officer of Terre Haute First National
Bank and President and Chief Executive Officer of First Financial Corporation;

        WHEREAS, Employers recognize the valuable service heretofore performed
by Employee and wish to encourage his continued employment by offering
compensation and benefits beyond his current salary and benefits;

        WHEREAS, Employee wishes to be assured that he or his Wife will be
entitled to a certain amount of compensation and benefits continuing after his
retirement from active service with Employers; and

        WHEREAS, The parties wish to provide the terms and conditions upon which
Employers shall pay such additional compensation to Employee or his wife during
his employment and after his retirement or termination of his employment.

        NOW, THEREFORE, The parties hereby agree as follows:

                                   ARTICLE I.
                                   EMPLOYMENT

        Employers currently employ Employee as President and Chief Executive
Officer. Employee shall have such powers and shall perform such duties in that
capacity or in any future capacity as may be determined by Employers' Board of
Directors.

                                   ARTICLE II.
                                  COMPENSATION

        During his employment, Employers shall pay to Employee compensation as
set by the Employers' Board of Directors. In consideration of Employee's past
distinguished service to Employers and his remaining in Employers' employ,
Employers agree that from January 1, 1995, and continuing after the retirement
of Employee from active service of Employers, in addition to the compensation
determined by the Board of Directors, each year Employers shall pay to Employee
the amount required of the Employee under the Split Dollar Insurance Agreement
executed in conjunction herewith during Employee's lifetime ("BONUS AMOUNT"). In
the event of the death of Employee survived by his wife, the Bonus Amount shall
be paid by Employers to the Wife for her lifetime.

                                  ARTICLE 111.
                             SPLIT DOLLAR AGREEMENT

        The Employers simultaneously herewith have established a Split Dollar
Life Insurance Agreement to be executed in conjunction herewith. Under said
Agreement, Employer shall pay the Premium Advance as defined in


<PAGE>

Paragraph 2b of said Agreement and the Employee or his wife shall be responsible
for contributing the Bonus Amount as his or her portion of the premium.

                                   ARTICLE IV.
                                    TAXATION

        The Employee and his Wife each agree to pay federal, state or local
taxes, if any, which may be required by law to be paid with respect to this
Bonus Amount. Any payments made to the Employee or his Wife pursuant to the
terms of this Agreement shall be reduced by such amounts as are required to be
withheld with respect thereto under all present and future federal, state and
local regulations and other laws and regulations.

                                   ARTICLE V.
                                EMPLOYEE'S DUTIES

        In consideration of the foregoing agreements of Employers and of the
payments to be made by Employers thereto, Employee shall, for so long as he
remains in the active employ of Employers, devote his full business time and
efforts to the business and affairs of Employers or their successors, and after
his retirement, Employee shall consult with Employers in an advisory capacity
when requested to do so by Employers. Employee will not, directly or indirectly,
own, manage, operate, control, be employed by or participate in the ownership,
management, operation or control of, or be connected in any manner with any
business of the type and character engaged in and competitive with that
conducted by the Employers. Notwithstanding the foregoing, Employee shall not be
precluded from serving as a director or member of a committee or board of any
entity or from serving in any other capacity for an entity that involves no
conflict of interest with Employers or their successor.

                                   ARTICLE Vl.
                           NO ASSIGNMENT OF AGREEMENT

        Neither Employee, his Wife nor any other beneficiary under this
Agreement shall have any power or right to transfer, assign, anticipate,
hypothecate, or otherwise encumber any part or all of the amounts payable
hereunder, nor shall such amounts be subject to seizure by any creditor or any
such beneficiary, by a proceeding at law or in equity, and no such benefit shall
be transferable by operation of law in the event of bankruptcy, insolvency or
death of Employee, his spouse, or any other beneficiary hereunder. Any such
attempted assignment or transfer shall be void and shall terminate this
Agreement, and Employers shall thereupon have no further liability hereunder.

                                  ARTICLE Vll.
                               ASSETS OF EMPLOYERS

        This Agreement is an unfunded deferred compensation arrangement solely
for Employee and the payments to Employee, his wife or any other beneficiary
hereunder shall be made from assets which shall continue, for all purposes, to
be a part of the general assets of Employers, and no person acquires a right to
receive payments from Employers under the provisions hereof, such right shall be
no greater than the right of any unsecured general creditor of Employers.

                                  ARTICLE VIII.
                         AMOUNT PAYABLE BY EACH EMPLOYER

        Wherever in this Agreement the terms require payment by or to the
Employers, the amount payable by or to each of the Employers shall be determined
by mutual agreement of the Boards of Directors of the Employers.

                                   ARTICLE IX.
                           NOT AN EMPLOYMENT CONTRACT

        Nothing contained herein shall be construed to be a contract of
employment for any term of years, nor as conferring upon Employee the right to
continue in the employ of Employers in any capacity. It is expressly


<PAGE>

understood by the parties hereto that this Agreement relates exclusively to
additional compensation for Employee's services and is not intended to be an
employment contract.

                                   ARTICLE X.
                                  ARBITRATION

        All claims or disputes between Employers and Employee or his wife
arising out of, or relating to, this Agreement or the breach thereof shall be
decided by arbitration following the Rules of the American Arbitration
Association unless the parties mutually agree otherwise. Notice of the demand
for arbitration shall be filed in writing with the other party to this Agreement
and with the American Arbitration Association and shall be made within a
reasonable time after the dispute has arisen. The award rendered by the
arbitrator shall be final, and judgment may be entered upon it according to
applicable law in any court having jurisdiction thereof.

                                   ARTICLE Xl.
                                     NOTICES

        All notices to be given under this Agreement shall be in writing, and
shall be deemed to have been given and served when delivered in person, by UPS
(or a similar overnight carrier), via facsimile transmission, or by United
States mail, postage prepaid to the addressee at the following addresses:

Employers:
        Attention: President
        Terre Haute First National Bank
        Post Office Box 540
        Terre Haute, Indiana 47808~540

Employee and Wife:
        Donald E. and Mary Frances Smith
        94 Allendale
        Terre Haute, Indiana 47802

Facsimile No: (812) 428-9167                      Facsimile No: (

Or Employee's last known address shown on the records of Employers.

Any party may change its mailing address by serving written notice of such
change and of such new address upon the other party.

                                  ARTICLE XII.
                                  GOVERNING LAW

        This Agreement shall be governed by and construed in accordance with the
laws of the State of Indiana, and each party hereto by execution of this
Agreement, consents to the exercise of jurisdiction over any matter arising in
connection with this Agreement in the Superior Court of Vigo County, State of
Indiana (but this provision shall not be construed as inconsistent with the
parties' agreement to resolve all disputes arising hereunder by final and
binding arbitration pursuant to Article X.)

                                  ARTICLE XIII.
                                  MISCELLANEOUS

        This Agreement and any Agreement executed simultaneously herewith
contain the entire agreement between the parties concerning the subject matter
hereof, and supersede all prior oral or written understandings, agreement or
contracts, formal or informal, between the parties hereto with respect to such
matters.

        This Agreement shall inure to the benefit of, and shall be binding upon,
the respective successors and assigns of each of the parties.

<PAGE>

        All headings set forth herein are included for the convenience of
reference only and shall not affect the interpretation hereof, nor shall any
weight or value be given to the relative position of any part or provision
hereof in relation to any other provision in determining such construction. As
used in this Agreement, the plural shall be substituted for the singular, and
the singular for the plural, where appropriate, and words and pronouns of any
gender shall include any other gender. THE PROVISIONS OF THIS ARTICLE XIII, AND
EACH AND EVERY OTHER PROVISION OF THIS AGREEMENT MAY NOT UNDER ANY CIRCUMSTANCES
BE MODIFIED, CHANGED, AMENDED OR PROVISIONS HEREUNDER WAIVED VERBALLY, BUT MAY
ONLY BE MODIFIED, CHANGED, AMENDED OR WAIVED BY AN AGREEMENT IN WRITING EXECUTED
BY ALL PARTIES HERETO.

      IN WITNESS WHEREOF the parties have signed this Agreement as of the date
first written above.


Donald E. Smith

"EMPLOYEE,'

 Mary Frances Smith

"Wife"

TERRE HAUTE FIRST NATIONAL BANK


By:  John W. Perry, Sr. V.P. & Cashier
(Printed Name and Title)

FIRST FINANCIAL CORPORATION


By:

By:  John W. Perry, Sr. V.P. & Cashier
(Printed Name and Title)


 "EMPLOYERS"


<PAGE>



                        SPLIT DOLLAR INSURANCE AGREEMENT

        THIS AGREEMENT made and entered into as of the 22nd day of December,
1994, by and between TERRE HAUTE FIRST NATIONAL BANK and FIRST FINANCIAL
CORPORATION (collectively "EMPLOYERS"), TERRE HAUTE FIRST NATIONAL BANK OF TERRE
HAUTE, INDIANA ("OWNER"), as trustee of MARY FRANCES SMITH AND DONALD E. SMITH
IRREVOCABLE TRUST ("Trust");

WITNESSETH:

WHEREAS, Donald E. Smith ("Employee") is employed by Employers;

        WHEREAS, Employee wishes to provide life insurance protection for his
family under a policy of life insurance ("Policy) insuring his life and the life
of his wife, MARY FRANCES SMITH, Jointly "INSUREDS") in the face amount of $5
million which was issued by Pacific Mutual Life Insurance Company ("INSURER") as
Policy No.

        WHEREAS, Employers are willing to pay a portion of the premiums due on
the Policy as an additional employment benefit for the Employee, which the Owner
agrees to repay to Employers on the terms and conditions hereinafter set forth;

        WHEREAS, the Owner, as trustee of the Trust, is the owner of the Policy
and, as such, possesses all incidents of ownership in and to the Policy;

        WHEREAS, Employers wish to have the Policy collaterally assigned to them
by the Owner, in order to secure the repayment of the amounts which they will
pay toward the premiums on the Policy; and

        WHEREAS, the parties intend that by such collateral assignment the
Employers shall receive only the right to such repayment, with the Owner
retaining all other ownership rights in the Policy as specified herein.

        NOW, THEREFORE, the parties hereto agree as follows:

1.      Purchase of Policy. The Owner has purchased the Policy from the Insurer.
The parties hereto have taken all necessary action to cause the Insurer to issue
the Policy and shall take any further action which may be necessary to cause the
Policy to conform to the provisions of this Agreement and of the collateral
assignment filed with the Insurer relating to the Policy.

2.      Ownership of Policy.

   a.   The Owner shall be the sole and absolute owner of the Policy, and may
        exercise all ownership rights granted to the owner thereof by the teens
        of the Policy, except as may otherwise be provided herein

   b.   It is the intention of the parties to this Agreement and the collateral
        assignment executed by the Owner to the Employers in connection herewith
        (attached hereto as Exhibit "A") that the Owner shall retain all rights
        which the Policy grants to the owner thereof; the sole right of the
        Employers hereunder shall be to be repaid the amounts which they have
        paid toward the premiums on the Policy (less any amounts previously
        repaid to Employers by the Owner) ("PREMIUM ADVANCE"). Specifically, but
        without limitation, the Employers shall neither have nor exercise any
        right as collateral assignees of the policy which could in any way
        defeat or impair the Owner's right to receive the cash surrender value
        or the death proceeds of the Policy in excess of the amount due the
        Employers hereunder. All provisions of this Agreement and of such
        collateral assignment shall be construed to carry out such intention.

   c.   .It is agreed that benefits may be paid under the Policy by the Insurer
        either by separate checks to the parties entitled thereto, or by a joint
        check. In the latter instance, the Owner and the Employers agree that
        the benefits shall be divided as provided herein.

<PAGE>


3.     Premium Payments.

        a.      Each annual premium on the Policy shall be paid as follows:

                i       The Owner or Employee shall pay the amount required to
                        be paid to the Insurer as set forth in Exhibit "B". This
                        amount is subject to adjustment ratably in relation to
                        the premiums paid by the Employers if and when the
                        premiums charged by the Insurer change. This premium
                        portion will also be remitted by the Employers and
                        treated as additional employee compensation in
                        accordance with the Deferred Compensation Agreement
                        executed in conjunction herewith.

                ii.     The Employers shall be responsible for the gross annual
                        premium reduced by any amount contributed by the Owner
                        or Employee in accordance with subparagraph i above.

                iii.    The Employers shall remit to the Insurer the full
                        premium due.

        b       Dividends on the Policies shall be applied to purchase paid-up
                additions.

4.      Repayment of the Employers on Collection of the Policy Death Proceeds.

        a. Upon the death of the survivor of the Insureds, the Owner shall take
        whatever action is necessary to collect the death benefit provided under
        the Policy; when such benefit has been collected and paid as provided
        herein, this Agreement shall thereupon terminate.

        b. Upon the death of the survivor of the Insureds, the Employers shall
        have the unqualified right to receive the Premium Advance from the
        Owner.

 5      Termination of the Agreement During the Lifetime of the Insureds.

        a. This Agreement shall terminate, while either of the Insureds is
        alive, without notice, upon the occurrence of any of the following
        events: (a) total cessation of both Employers' businesses; (b)
        bankruptcy, receivership or dissolution of both Employers; or (c)
        failure of both the Employee and the Owner to timely pay to the
        Employers the Employee's portion of the premium, if any, due hereunder,
        unless the Employers elect to make such payment on behalf of the
        Employee and the Owner, as provided herein.

        b. In addition, Owner may terminate this Agreement, while either of the
        Insureds is alive and while no premium under the Policy is overdue, by
        written notice to the other parties hereto. Such termination shall be
        effective as of the date of such notice.

6   Repayment of the Employers on Termination of the Agreement During the
    Lifetime of the Insureds - Within sixty (60) days of the date of the
    termination of this Agreement during the lifetime of the Insureds, the Owner
    shall repay to the Employers the Premium advance.

7.  The Insurer - The Insurer shall be bound only by the provisions of and
    endorsements on the Policy, and any payments made or actions taken by it in
    accordance therewith shall fully discharge it from all claims, suits and
    demands of all persons whatsoever. It shall in no way be bound by or be
    deemed to have notice of the provisions of this Agreement.

8   Amendment of Agreement - The Owner and the Employers can mutually agree
    to amend this Agreement and such amendment shall be in writing and signed by
    the Owner and the Employers.

9.  Special Provisions - The following provisions are part of this Agreement and
    are intended to meet the requirement of the Employee Retirement Income
    Security Act of 1974:

    a. The named fiduciary: The Secretary of the Employer.



<PAGE>
    b. The funding policy under this Agreement is that all premiums on the
       Policies be remitted to the Insurer when due.

    c.  Direct payment by the Insurer is the basis of payment of benefits under
        this Agreement, with those benefits in turn being based on the payment
        of premiums as provided in the Agreement.

    d.  For claims procedure purposes, the "Claims Manager`' shall be John
        Perry.

        (1)     If for any reason a claim for benefits under this Agreement is
                denied by the Employers, the Claims Manager shall deliver to the
                claimant a written explanation setting forth the specific
                reasons for the denial, pertinent references to the Agreement
                section on which the denial is based, such other data as may be
                pertinent and information on the procedures to be followed by
                the claimant in obtaining a review of his claim, all written in
                a manner calculated to be understood by the claimant. For this
                purpose:

        (A)     The claimant's claim shall be deemed filed when presented orally
                or in writing to the Claims Manager.

        (B)     The Claims Manager's explanation shall be in writing delivered
                to the claimant within 90 days of the date the claim is filed.

        (2)     The claimant shall have 60 days following his receipt of the
                denial of the claim to file with the Claims Manager a written
                request for review of the denial. For such review, the claimant
                or his representative may submit pertinent documents and written
                issues and comments.

        (3)     The Claims Manager shall decide the issue on review and furnish
                the claimant with a copy within 60 days of receipt of the
                claimant's request for review of his claim. The decision on
                review shall be in writing and shall include specific reasons
                for the decision, written in a manner calculated to be
                understood by the claimant, as well as specific references to
                the pertinent Agreement provisions on which the decision is
                based. If a copy of the decision is not so furnished to the
                claimant within such 60 days, the claim shall be deemed denied
                on review.

10  This Agreement and any Agreement executed simultaneously herewith contain
    the entire agreement between the parties concerning the subject matter
    hereof, and supersede all prior oral or written understandings, agreement or
    contracts, formal or informal, between the parties hereto with respect to
    such matters.

11. This Agreement shall inure to the benefit of, and shall be binding upon, the
    respective successors and  assigns of each of the parties.

12. This Agreement shall be governed by and construed in accordance with the
    laws of the State of Indiana, and each party hereto by execution of this
    Agreement, consents to the exercise of jurisdiction over any matter arising
    in connection with this Agreement in the Superior Court of Vigo County,
    State of Indiana.

13. All headings set forth herein are included for the convenience of reference
    only and shall not affect the interpretation hereof, nor shall any weight or
    value be given to the relative position of any part or provision hereof in
    relation to any other provision in determining such construction. As used in
    this Agreement, the plural shall be substituted for the singular, and the
    singular for the plural, where appropriate, and words and pronouns of any
    gender shall include any other gender. THE PROVISIONS OF THIS ARTICLE AND
    EACH AND EVERY OTHER PROVISION OF THIS AGREEMENT MAY NOT UNDER ANY
    CIRCUMSTANCES BE MODIFIED, CHANGED, AMENDED OR PROVISIONS HEREUNDER WAIVED
    VERBALLY, BUT MAY ONLY BE MODIFIED, CHANGED, AMENDED OR WAIVED BY AN
    AGREEMENT IN WRITING EXECUTED BY ALL PARTIES HERETO.
<PAGE>



IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

TERRE HAUTE FIRST NATIONAL BANK OF TERRE HAUTE, INDIANA as trustee of THE MARY
FRANCES SMITH AND DONALD E. SMITH IRREVOCABLE TRUST

    By: Fred P. Rubey
    (Printed Name and Title)  Fred P. Rubey,  Sr. Vice President & Trust Officer

                                     "OWNER"

                     TERRE HAUTE FIRST NATIONAL BANK

                    By: Signed John W. Perry
                    (Printed Name and Title)  John W. Perry, Sr. V. P. & Cashier

                    FIRST FINANCIAL CORPORATION

                    By.  Signed John W. Perry

                    (Printed Name and Title) John W. Perry, Secretary



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>6
<FILENAME>c73127exv10w2.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT FOR NORMAN L. LOWERY
<TEXT>
<PAGE>



Exhibit 10.2 Employment Agreement for Norman L. Lowery

                              EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT (the "Agreement"), entered into and effective
as of the 1st day of January, 2002 (the "Effective Date"), by and between Terre
Haute First National Bank (the "Bank") and Norman L. Lowery (the "Employee").

        WHEREAS, the Employee has heretofore been employed by the Bank as its
President and Chief Executive Officer and has performed valuable services for
the Bank; and

        WHEREAS, the Board of Directors of the Bank (the "Board") believes it is
in the best interest of the Bank to enter into this Agreement with the Employee
in order to assure continuity of management of the Bank 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 Bank 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 Bank agree as follows:

        1. Employment. The Employee is employed as the President and Chief
Executive Officer of the Bank. The Employee shall render such administrative and
management services for the Bank 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 Bank. The Employee's other duties shall be
such as the Board may, from time to time, reasonably direct, including normal
duties as an officer of the Bank. 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.

        2. Base Compensation. The Bank agrees to pay the Employee during the
term of this Agreement a base salary at the rate of $371,800 per annum, payable
in cash not less frequently than monthly. Such base salary shall be effective
and calculated commencing as of the Effective Date. The Bank 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 Bank may also declare
decreases in the base salary it pays the Employee if the operating results of
the Bank are significantly less favorable than those for the fiscal year ending
December 31, 2001, and the Bank makes similar decreases in the base salary it
pays to other executive officers of the Bank. After a Change in Control, the
Bank shall consider and declare salary increases in base salary based upon the
following standards:

        Inflation;

        Adjustments to the base salaries of other senior management personnel;

        Past performance of the Employee; and

        The contribution which the Employee makes to the business and profits of
the Bank during the term of this Agreement.

        3. Bonuses. The Employee shall participate in any year end bonus granted
to other employees by the Board. The Employee shall further participate in an
equitable manner with all other senior management employees of the Bank in any
discretionary bonuses that the Board may award from time to time to the Bank's
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.

<PAGE>

        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 Bank generally, or to executive officers of the Bank, 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 Bank's operating results or financial
        condition in a material way, and the Board concludes that modifications
        to such plans are necessary to avoid such adverse effects and such
        modifications apply consistently to all employees of the Bank
        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 Bank's senior management employees, including, for
        example, any stock option or incentive compensation (including, but not
        limited to the First Financial Corporation 2001 Long-Term Incentive Plan
        ("LTIP")) or performance-based plans, 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. All
        the employee benefits referenced in this Section 4(a) are collectively
        referred to hereinafter as "Employee Benefits."

               (b) Benefits After Retirement. Upon retirement of the Employee
        during the term of this Agreement, the Bank agrees to continue, at no
        greater cost to Employee than is generally allocated to all employees,
        full coverage for the Employee, his spouse and his children living in
        his household under the health, life and disability plans as adopted by
        the Bank which shall be no less favorable than those in effect on the
        Effective Date of this Agreement. The Bank agrees to continue such
        health coverage until both the Employee and his spouse are eligible for
        coverage by Medicare. When both the Employee and his spouse become
        eligible for Medicare coverage, the Bank agrees to pay for supplemental
        coverage for both the Employee and his spouse until the death of the
        Employee and his spouse. The Employee shall be entitled to a life
        insurance policy on his life in the maximum amount established by the
        group life insurance plan from time to time which amount shall be no
        less than the limit on the Effective Date of three times his annual
        salary (subject to a $350,000 maximum), provided at the Bank's cost. The
        Employee shall also be entitled to a life insurance policy on his life
        in the amount established by the Bank's insurance program for executive
        officers from time to time. The Bank shall continue to pay to the
        Employee the annual premiums, which are required to keep the life
        insurance policy in force, on behalf of the Employee pursuant to the
        Bank's insurance program for executive officers.

               (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 Bank. In
        addition, the Employee shall be reimbursed for all reasonable
        out-of-pocket 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 Bank pursuant to
        this Agreement, the Employee shall be entitled to continue his
        memberships in the American, Indiana and Terre Haute Bar Associations,
        the American and Indiana Trial Lawyers Associations and the Country Club
        of Terre Haute, and Bank 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 Bank
        pursuant to this Agreement, the Employee shall be entitled to continue
        to use a Bank-owned automobile of commensurate quality and value as that
        presently used by him on the same terms and conditions in effect with
        respect to such use on the Effective Date of this Agreement. The Bank
        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 Bank shall also
        pay for the cost of maintenance and repair of the automobile. All
        benefits referenced in this Section 4(d) are collectively referred to
        hereinafter as "Automobile Benefits."

<PAGE>

               (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 employees of the Bank.

               The Employee shall not receive any additional compensation from
        the Bank 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 Board or permitted for other employees of the Bank.

               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 Bank for such additional periods
        of time and for such valid and legitimate reasons as the Board may in
        its discretion determine and to attend the continuing legal education
        seminars contemplated by Section 4(c) hereof. Further, the Board 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 such Board
        in its discretion may determine.
               (f) Other Policies. All other matters relating to the employment
        of the Employee by the Bank not specifically addressed in this Agreement
        shall be subject to the general policies regarding employees of the Bank
        as in effect from time to time.

        5.     Term of Employment. The Bank 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 sixty months thereafter
(or such earlier date as is determined in accordance with Section 8).
Additionally, on each annual anniversary date from the Effective Date, the
Employee's term of employment shall be extended for an additional one-year
period beyond the then effective expiration date, provided the Board determines
in a duly adopted resolution that this Agreement shall be extended. Only those
members of the Board who have no personal interest in this Agreement shall
discuss and vote on the approval, subsequent review and extension of this
Agreement. The initial term of this Agreement and all extensions thereof are
hereinafter referred to individually and collectively as the "Term."


        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 any of its subsidiaries or affiliates, or
               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
               executive officers. 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
               Bank, or be gainfully employed in any other position or job other
               than as provided above.

                      (ii) Nothing contained in this Section 6 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 Bank, 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 Bank, he will have
        advantageous familiarity and personal contacts with the Bank's
        customers, wherever located, and the business, operations and affairs of
        the Bank. Accordingly, while the Employee is employed by the Bank, and
        at all locations for a period of one (1) year after


<PAGE>

        termination of the Employee's employment with the Bank for any reason
        (whether with or without cause or whether by the Bank or the Employee)
        or the expiration of the Term, the Employee shall not, directly or
        indirectly, or individually or jointly, (i) solicit in any manner, seek
        to obtain or service the business of any party which is a customer of
        the Bank at the time of such termination or any party which was a
        customer of the Bank during the one (1) year period immediately
        preceding such termination, (ii) request or advise any customers or
        suppliers of the Bank to terminate, reduce, limit or change their
        business or relationship with the Bank, or (iii) induce, request or
        attempt to influence any employee of the Bank to terminate his
        employment with the Bank.

               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 cease doing business with the Bank.

               (c) Noncompetition. During the period of his employment
        hereunder, and for a period of two (2) years following the termination
        hereof, the Employee shall not, directly or indirectly:

               (i)    as owner, officer, director, stockholder, investor,
                      proprietor, organizer or otherwise, engage in the same
                      trade or business as the Bank, as conducted on the date
                      hereof, which would conflict with the interests of the
                      Bank or in a trade or business competitive with that of
                      the Bank, which would conflict with the interests of the
                      Bank, as conducted on the date hereof; or

               (ii)   offer or provide employment (whether such employment is
                      with the Employee or any other business or enterprise),
                      either on a full-time or 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 management-level employee of the Bank. This
                      subsection 6(c)(ii) shall only apply in the event the
                      Employee voluntarily terminates his employment with the
                      Bank.

               The restrictions contained in this paragraph upon the activities
        of the Employee following termination of employment shall be limited to
        the following geographic areas (hereinafter referred to as "Restricted
        Geographical Area"):

               (1)    Terre Haute, Indiana; and

               (2)    The thirty mile radius of Terre Haute, Indiana.

               Nothing contained in this Section 6(c) shall prevent the Employee
        from engaging in the practice of law within the Restricted Geographical
        Area. In addition, nothing contained in this Section 6(c) 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, solely
        as a passive or minority investor, in any business.

               If the Employee does not comply with the provisions of this
        Section 6, the two (2) 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 two (2)
        full years 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 Bank's business (i) which relate in any way to the
        Bank's business, products or processes; or (ii) which are discovered,
        conceived, developed or reduced to


<PAGE>

        practice by the Employee, either alone or with others either during the
        Term, at the Bank's expense, or on the Bank'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 Bank
               or to any other person outside the employ of the Bank, or if the
               Employee were to consent to be employed by any competitor of the
               Bank or to engage in competition with the Bank, the Bank would be
               irreparably harmed. In addition, the Employee has or may develop
               relationships with the Bank's customers which could be used to
               solicit the business of such customers away from the Bank. The
               Bank 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 Bank 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 Bank. The covenant contained in this Section 6(d)
               shall be binding upon the Employee during the Term and following
               the termination hereof until either (i) such Confidential
               Information becomes obsolete; or (ii) such Confidential
               Information becomes generally known in the Bank's trade or
               industry by means other than a breach of this covenant.

                      (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 Bank.

               (e) Remedies. The Employee agrees that the Bank 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 Bank 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 Bank shall be entitled to recover
        from the Employee, reasonable attorneys' fees and expenses incurred in
        any action wherein the Bank successfully enforces the provisions of this
        Section 6 against the breach or threatened breach of those provisions by
        the Employee.

                      (i) The Employee and the Bank acknowledge and agree that
               in the event of termination of this Agreement 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 Bank
               entering into this Agreement, and shall be construed as
               independent of any other provision in this Agreement.

               (f) Surrender of Records. Upon termination of the Employee's
        employment for any reason, the Employee shall immediately surrender to
        the Bank 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 Bank or its affiliates including any Confidential Information in
        the Employee's personal notes, address books, calendars, rolodexes,
        personal data assistants, etc.

<PAGE>

        7.     Standards. The Employee shall perform his duties under this
Agreement in accordance with such reasonable standards as the Board may
establish from time to time. The Bank will provide the Employee with the working
facilities and staff commensurate with his position or positions and necessary
or advisable for him to perform his duties.

        8.     Termination and Termination Pay.  Subject to Section 10 hereof,
the Employee's employment hereunder may be terminated under the following
circumstances:

               (a) Death. The Employee's employment shall terminate 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 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 (including, but not limited to, the LTIP), performance or
        other plans as a result of the Employee's participation in such plans
        through such date shall be paid when due under those plans.

               (b)    Disability.

                      (i) The Bank may terminate the Employee's employment, as a
               result of the Employee's Disability, in a manner consistent with
               the Bank's and the Employee's rights and obligations under the
               Americans with Disabilities Act or other applicable state and
               federal laws concerning disability. For the purpose of this
               Agreement, "Disability" means a physical or mental condition
               which substantially limits the Employee's ability to perform the
               essential functions of his position and which results in the
               Employee becoming eligible for long-term disability benefits
               under the Bank's long-term disability plan.

                      (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 Bank.

                      (iii) In the event of Employee's termination of employment
               by the Bank due to Disability, the Employee shall be entitled to
               receive the base salary, bonuses, vested rights, and Employee
               Benefits due the Employee through his date of termination. Any
               benefits payable under insurance, health, retirement, bonus,
               incentive (including, but not limited to, the LTIP), performance
               or other plans as a result of Employee's participation in such
               plans through such date of termination shall be paid when due
               under those plans.

               (c) Just Cause. The Board may, by written notice to the Employee,
        immediately terminate his employment at any time, for Just Cause. The
        Employee shall have no right to receive any base salary, bonuses or
        other Employee Benefits, except as provided by law, whatsoever for any
        period after his termination for Just Cause. However, the vested rights
        of the Employee as of his date of termination shall not be affected.
        Termination for "Just Cause" shall mean termination because of:


                  An intentional act of fraud, embezzlement, theft, or 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 Bank;

                  (ii) Intentional wrongful damage by the Employee to the
                  business or property of the Bank, causing material harm to the
                  Bank;

                  (iii) Breach by the Employee of any confidentiality or
                  non-disclosure agreement in effect from time to time with the
                  Bank;

<PAGE>

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

                       (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)(4) or 8(g)(1) of the Federal Deposit Insurance
               Act, 12USC1818(e)(4) and (g)(1).

               Notwithstanding the foregoing, in the event of termination 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 entire membership of the Board at a meeting of the Board
        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 heard before the Board), such meeting and the
        opportunity to be heard to be held prior to, or as soon as reasonably
        practicable following, termination, but in no event later than 60 days
        following such termination, finding that in the good faith opinion of
        the Board the Employee was guilty of conduct constituting Just Cause and
        specifying the particulars thereof in detail. If, following such
        meeting, 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 for the period following
        termination and continuing through reinstatement as though he was never
        terminated.

        (d)    Without Just Cause. The Board may, by written notice to the
Employee, immediately terminate his employment at any time for a reason other
than Just Cause, in which event the Employee shall be entitled to receive the
following compensation and benefits (unless such termination occurs within the
time period set forth in Section 10(a) hereof, in which event the benefits and
compensation provided for in Section 10 shall apply):

               (i)     the base salary provided pursuant to Section 2 hereof as
                       in effect on the date of termination, through the
                       Expiration Date of this Agreement as determined pursuant
                       to Section 5 hereof (including any renewal or extension
                       of this Agreement) (the "Expiration Date");

               (ii)    an amount equal to the bonuses received by or payable to
                       the Employee in the calendar year prior to the calendar
                       year in which the Employee is terminated, for each year
                       remaining through the Expiration Date; and

               (iii)   at the Employee's election, either:

                       (A) cash in an amount equal to the cost to the
               Employee of obtaining all Employee Benefits (as defined in
               Section 4(a)) and health insurance coverage for the Employee, his
               spouse and child living in the Employee's household and medicare
               supplement insurance, and life insurance (as described in Section
               4(b)), professional and club dues, the cost of Employee's
               continuing legal education requirements, all Automobile Benefits
               (as defined in Section 4(d)) and other benefits which the
               Employee would have been eligible to participate in or receive
               through the Expiration Date, based upon the benefit levels
               substantially equal to those that the Bank provided for the
               Employee at the date of termination of employment; or

                       (B) continued participation in such benefit plans and
               programs listed in subparagraph A above, which the Employee would
               have been eligible to participate in or receive through the
               Expiration Date, based upon benefit levels substantially equal to
               those that the Bank provided for the Employee at the date of
               termination, but only to the extent the Employee continues to
               qualify for participation therein. In elaboration of, but not in
               limitation of, the foregoing, the Employee shall be entitled to
               receive, in cash, an amount equal to the cost to the Employee of
               obtaining any benefits he would otherwise have been eligible to
               receive under the Bank's benefit plans or programs listed in
               subparagraph A above had he continued to accrue service (for
               vesting and benefit accrual purposes) and compensation under
               those plans through the Expiration Date, if he is not permitted
               to continue to participate in those plans through the Expiration
               Date. The Employee shall also be entitled to receive an amount
               necessary to provide any cash payments received under this
               Section 8(d)(iii)(B) due to his inability to continue
               participation in any of the benefit plans or programs under this
               Section 8(d)(iii)(B), net of all income and payroll taxes that

<PAGE>

               would not have been payable by the Employee had he been able to
               continue participation in the benefit plan or program instead of
               receiving cash in lieu thereof.

               Notwithstanding the foregoing, but only to the extent required
        under federal banking law, the amount payable under Subsection (d) of
        this Section 8 shall be reduced to the extent that on the date of the
        Employee's termination of employment, the present value of the benefits
        payable under Subsections (d)(i),(ii), and (iii) of this Section 8
        exceed any limitation on severance benefits that is imposed by the
        Office of the Comptroller of the Currency (the "OCC") on such benefits.

               All amounts payable to the Employee shall be paid, at the option
        of the Employee, either (1) in periodic payments through the Expiration
        Date, or (2) in one lump sum within ten (10) days of such termination.
        If Employee elects periodic payments and he dies prior to the Expiration
        Date, those payments will continue to be paid to his estate or
        designated beneficiaries, or their successors in interest, through the
        Expiration Date.

        (e)    Voluntary for Good Reason. The Employee may voluntarily terminate
his employment under this Agreement for Good Reason, and the Employee shall
thereupon be entitled to receive the same amount payable under Section 8(d)
hereof, within thirty (30) days following his date of termination. 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 termination occurs within the time period set forth in
Section 10(b) hereof, in which event the benefits and compensation provided for
in Section 10 shall apply):

               (i)     the requirement that the Employee move his personal
        residence;

               (ii)    a reduction of 10% 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 executive officers of the
        Bank;

               (iii) the removal of the Employee from participation in any
        incentive compensation (including, but not limited to, the LTIP) or
        performance-based compensation plans or bonus plans unless the Bank
        terminates participation in the plan or plans with respect to all other
        executive officers of the Bank;

               (iv) the failure by the Bank to continue to provide the Employee
        with the base salary, bonuses or benefits provided for under Sections
        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 Bank which would
        directly or indirectly reduce any such benefits or deprive the Employee
        of any such benefit enjoyed by him, unless part of an institution-wide
        reduction and applied similarly to all other executive officers of the
        Bank;

               (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 Board or
        a failure on the part of First Financial Corporation to honor its
        obligation to nominate Employee to the Board of Directors of First
        Financial Corporation;

               (vii) a material diminution or reduction in the Employee's
        responsibilities or authority (including reporting responsibilities) in
        connection with his employment with the Bank; or

               (viii) a material reduction in the secretarial or administrative
        support of the Employee.

               Notwithstanding the foregoing, but only to the extent required
        under federal banking law, the amount payable under Subsection (e) of
        this Section 8 shall be reduced to the extent that on the date of the
        Employee's termination of employment, the present value of the benefits
        payable under Subsections (d)(i), (ii) and (iii) of this Section 8
        exceed any limitation on severance benefits that is imposed by the OCC
        on such benefits.

<PAGE>
        (f)    Voluntary Termination by Employee. Subject to Section 10 hereof,
the Employee may voluntarily terminate employment with the Bank during the term
of this Agreement, upon at least ninety (90) days' prior written notice to the
Board of Directors, in which case the Employee shall receive only his base
salary, bonuses, vested rights and benefits up to the date of his termination
(unless such termination occurs pursuant to Section 10(b) hereof, in which event
the benefits, bonuses and base salary provided for in Section 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 Bank's affairs by an order issued
        under Sections 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act
        ("FDIA") (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Bank
        under this Agreement shall terminate, as of the effective date of the
        order, but vested rights of the Employee shall not be affected.

               (ii) 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.

               (iii) 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.

               (iv) If a notice served under Section 8(e)(3) or (g)(1) or the
        FDIA (12 U.S.C. 1818(e)(3) or (g)(1)) 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 (A) pay the Employee all or
        part of the compensation withheld while its contract obligations were
        suspended, and (B) 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 Termination.

               (1)     Notwithstanding any provision herein to the contrary, if
        the Employee's employment under this Agreement is terminated by the
        Bank, 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 Section 10(a)(4), the Employee
        shall be paid the greater of:

                       (i)    The total amount payable under Section 8(d)
                              hereof; or

                       (ii)   The product of 2.99 times the sum of his base
                              salary in effect as of the date of the Change in
                              Control plus an amount equal to the bonuses
                              received by or payable to the Employee in the
                              calendar year prior to the year in which the
                              Change in Control occurs; and at the Employee's
                              election, either:
<PAGE>

                                    (A)   cash in an amount equal to the cost to
                              the Employee of obtaining all Employee Benefits
                              (as defined in Section 4(a)), medicare
                              supplement insurance (as described in Section
                              4(b)), professional and club dues, the cost of
                              Employee's continuing legal education
                              requirements, all Automobile Benefits (as
                              defined in Section 4(d)) and other benefits
                              which the Employee would have been eligible to
                              participate in or receive, for a period of 3
                              years, commencing on the date of termination, or
                              based upon the benefit levels substantially
                              equal to those that the Bank provided for the
                              Employee at the date of termination of
                              employment; or

                                    (B)   continued participation in the Bank
                              benefit plans and programs listed in Section
                              10(a)(1)(ii)(A) above, but only to the extent the
                              Employee continues to qualify for participation
                              therein, for a period of 3 years, commencing on
                              the date of termination based upon benefit
                              levels substantially equal to those that the
                              Bank provided for the Employee at the date of
                              termination. In elaboration of, but not in
                              limitation of the foregoing, the Employee shall
                              be entitled to receive, in cash, an amount equal
                              to the cost to the Employee of obtaining any
                              benefits he would otherwise have been eligible
                              to receive under the Bank's benefit plans or
                              programs listed in Section 10(a)(1)(ii)(A) above
                              had he continued to accrue service (for vesting
                              and benefit accrual purposes) and compensation
                              under those plans for a period of three (3)
                              years, commencing on the date of termination, if
                              he is not permitted to continue to participate
                              in those plans for the three (3) year period.
                              The Employee shall also be entitled to receive
                              under this Section 10(a)(1)(ii)(B) an amount
                              necessary to provide any cash payments under
                              this Section 10(a)(1)(ii)(B) net of all income
                              and payroll taxes that would not have been
                              payable by the Employee had he been able to
                              continue participation in the benefit plan or
                              program instead of receiving cash in lieu
                              thereof.

        All amounts shall be paid in one lump sum within ten (10) days of such
termination, except to the extent that the Bank is required to permit Employee's
continued participation in the Bank benefit plans and programs through the
Expiration Date or the three (3) year period, as the case may be, as permitted
by their terms.

               (2)    To the extent payments received based on the Employee's
        termination within 12 months after a Change in Control are considered
        "excess parachute payments" pursuant to the Code Section 280G, the
        provisions of "Internal Revenue Code Section 280G Gross-Up" below shall
        apply.
               (3)    Internal Revenue Code Section 280G Gross-Up.

                      (i)     Additional Payment to Account for Excise Taxes.
               If, as a result of a Change in Control, the Employee becomes
               entitled to the amount payable under Section 10(a) of this
               Agreement, or under any other benefit, compensation, or incentive
               plan (including, but not limited to, the LTIP) or arrangement of
               or with the Bank or First Financial Corporation (collectively,
               the Total Benefits), and if any part of the Total Benefits is
               subject to the Excise Tax under Code Sections 280G and 4999 (the
               "Excise Tax"), the Bank or First Financial Corporation shall pay
               to the Employee the following additional amounts, consisting of
               (A) a payment equal to the Excise Tax payable by the Employee on
               the Total Benefits under Code Section 4999 (the "Excise Tax
               Payment"), and (B) a payment equal to the amount necessary to
               provide the Excise Tax Payment net of all income, payroll and
               excise taxes. Together, the additional amounts described in
               clauses (A) and (B) are referred to herein as the "Gross-Up
               Payments."

                      (ii)    Calculating the Excise Tax. Determination of
               whether any of the Total Benefits will be subject to the Excise
               Tax and the determination of the amount of the Excise Tax shall
               be made in accordance with the following:

<PAGE>

                             (A)    Determination of Parachute Payments Subject
                     to the Excise Tax. Any payments or benefits received or to
                     be received by the Employee in connection with a Change in
                     Control or the Employee's termination of employment
                     (whether under the terms of this Agreement or any benefit
                     plan or arrangement with First Financial Corporation, the
                     Bank, any person whose actions result in a Change in
                     Control or any person affiliated with First Financial
                     Corporation, the Bank or such person) shall be treated as
                     "parachute Payments" within the meaning of Code Section
                     280G(b)(2), and all "excess parachute payments" within the
                     meaning of Code Section 280G(b)(1) shall be treated as
                     subject to the Excise Tax, unless in the opinion of the
                     nationally recognized certified public accounting firm,
                     retained by the Bank or First Financial Corporation as of
                     the date immediately before the change in Control (the
                     "Accounting Firm"), such payments or benefits do not
                     constitute, in whole or in part, parachute payments, or
                     such excess parachute payments represent, in whole or in
                     part, reasonable compensation for services actually
                     rendered within the meaning of Code Section 280G(b)(4) or
                     are otherwise not subject to the Excise Tax.

                             (B)    Calculation of Benefits Subject to Excise
                     Tax. The amount of the Total Benefits that shall be treated
                     as subject to the Excise Tax shall be equal to the lesser
                     of (1) the total amount of the Total Benefits reduced by
                     the amount of such Total Benefits that in the opinion of
                     the Accounting Firm are not parachute payments, or (2) the
                     amount of excess parachute payments within the meaning of
                     Code Section 280G(b)(1) (after applying clause (A), above).

                             (C)    Value of Noncash Benefits and Deferred
                     Payment. The value of any noncash benefits or any deferred
                     payment or benefit shall be determined by the Accounting
                     Firm in accordance with the principles of Code Sections
                     280G(d)(3) and (4).

                     (iii)   Assumed Marginal Income Tax Rate. For purposes of
               determining the amount of the Gross-Up Payments, the Employee
               shall be deemed to pay federal income taxes at the highest
               marginal rate of federal income taxation in the calendar years in
               which the Gross-Up Payments are to be made and state and local
               income taxes at the highest marginal rate of taxation in the
               state and locality of the Employee's residence on the date on
               which such gross up payments are to be made, net of the reduction
               in federal income taxes that can be obtained from deduction of
               such state and local taxes (calculated by assuming that any
               reduction under Code Section 68 in the amount of itemized
               deductions allowable to the Employee applies first to reduce the
               amount of such state and local income taxes that would otherwise
               be deductible by the Employee, and applicable federal FICA and
               Medicare withholding taxes.)

                      (iv)   The Accounting Firm Shall Determine Whether a
               Gross-Up Payment is Required. Subject to paragraphs (i) through
               (iii) above, all determinations required to be made under
               paragraphs (i) through (viii), including whether and when a
               Gross-Up Payment is required, the amount of the Gross-Up Payment
               and the assumptions to be used to arrive at the determination
               (collectively, the "Determination"), shall be made by the
               Accounting Firm. The Accounting Firm shall provide detailed
               supporting calculations both to the Bank or First Financial
               Corporation and to the Employee within 15 business days after the
               Determination has been made, or such earlier time as is requested
               by the Bank, First Financial Corporation or the Employee.

                      (v)    Fees and Expenses of the Accounting Firm and
               Agreement with the Accounting Firm. All fees and expenses of the
               Accounting Firm shall be borne solely by the Bank or First
               Financial Corporation.

                      (vi)   Accounting Firm's Opinion. If the Accounting Firm
               determines that no Excise Tax is payable by the Employee, the
               Accounting Firm shall furnish the Employee with a written opinion
               to that effect, and to the effect that failure to report Excise
               Tax, if any, on the


<PAGE>
               Employee's applicable federal income tax return will not result
               in the imposition of a negligence or similar penalty.

                      (vii)  Accounting Firm's Determination is Binding.  The
               Determination by the Accounting Firm shall be binding on the
               Bank, First Financial Corporation and the Employee.

                      (viii) Underpayment and Overpayment. Because of the
               uncertainty in determining whether any of the Total Benefits will
               be subject to the Excise Tax at the time of the Determination, it
               is possible that Gross-Up Payments that should have been made
               will not have been made by the Bank or First Financial
               Corporation ("Underpayment"), or that Gross-Up Payments will be
               made that should not have been made by the Bank or First
               Financial Corporation ("Overpayment").

                      If, after a Determination by the Accounting Firm, the
               Employee is required to make a payment of additional Excise Tax,
               the Accounting Firm shall determine the amount of the
               Underpayment that has occurred. The Underpayment (together with
               any interest and penalties imposed by the Internal Revenue
               Service shall be paid promptly by the Bank or First Financial
               Corporation to or for the benefit of the Employee.

                      If the amount of the Gross-Up Payments exceeds the amount
               necessary to reimburse the Employee for his Excise Tax, the
               Accounting Firm shall determine the amount of the Overpayment
               that has been made. The Overpayment shall be repaid promptly by
               the Employee. Provided that his expenses are reimbursed by the
               Bank or First Financial Corporation, the Employee shall cooperate
               with any reasonable requests by the Bank or First Financial
               Corporation in any contests or disputes with the Internal Revenue
               Service relating to the Excise Tax.

                      (ix) Accounting Firm Conflict of Interest. If the
               Accounting Firm is serving as accountant or auditor for the
               individual, entity or group effecting the Change in Control, the
               Employee may appoint another nationally recognized certified
               public accounting firm to make the Determinations required
               hereunder (in which case the term "Accounting Firm" as used
               herein shall be deemed to refer to the accounting firm appointed
               by the Employee under this paragraph). The Bank or First
               Financial Corporation shall pay all fees and expenses of the
               Accounting Firm appointed by the Employee.

               (4)    "Change in Control" shall be deemed to have occurred if:
                      (i)    During any period of two consecutive years,
               individuals who constitute the Bank's or First Financial
               Corporation's Board of Directors at the beginning of the two-year
               period cease for any reason to constitute at least a majority
               thereof; provided, however, that - for purposes of this
               Subsection 10(4)(i) - each Director who, by a vote of at least
               two-thirds (2/3) of the Directors who were Directors at the
               beginning of the period, is first (i) nominated by the Bank's or
               First Financial Corporation's Board of Directors for election by
               stockholders, or (ii) elected to fill a vacancy on the respective
               Board of Directors, shall be deemed to have been a Director at
               the beginning of the two-year period.

                      (ii)   the Bank or First Financial Corporation transfers
               substantially all of its assets to another corporation which is
               not a wholly owned subsidiary of the Bank or First Financial
               Corporation;

                      (iii)  the Bank or First Financial Corporation sells
               substantially all of the assets of a subsidiary or affiliate
               which, at the time of such sale, is the principal employer of the
               Employee; or

                      (iv)   any "person" including a "group", who as of the
               Effective Date of this Agreement owns less than 20% of the
               combined voting power of the outstanding equity securities of the
               Bank or First Financial Corporation, is or becomes the
               "beneficial owner," directly or indirectly, of equity securities
               of the Bank or First Financial Corporation representing


<PAGE>

               20% or more of the combined voting power of the outstanding
               equity securities of the Bank or First Financial Corporation
               (with the terms in quotation marks having the meaning set forth
               in the federal securities laws); or

                      (v)    the Bank or First Financial Corporation is merged
               or consolidated with another corporation and, as a result of the
               merger or consolidation, less than fifty percent (50%) of the
               outstanding voting securities of the surviving or resulting
               corporation is owned in the aggregate by the former stockholders
               of the Bank or First Financial Corporation.

        Notwithstanding the foregoing, but only to the extent required under
federal banking law, the amount payable under Subsection(a) of this Section 10
shall be reduced to the extent that on the date of the Employee's termination of
employment, the amount payable under Subsection(a) of this Section 10 exceeds
any limitation on severance benefits that is imposed by the OCC.

        (b)    Change in Control; Voluntary Termination. Notwithstanding any
other provision of this Agreement to the contrary, the Employee may voluntarily
terminate his employment under this Agreement within twelve (12) months
following a Change in Control of the Bank or First Financial Corporation, as
defined in paragraph (a)(4) of this Section 10, and the Employee shall thereupon
be entitled to receive the payment described in Sections 10(a)(1), (2) and (3)
of this Agreement, within thirty (30) days following the occurrence of any of
the following events, which has not been consented to in advance by the Employee
in writing. However, during such thirty (30) day period, the Bank shall not
allow the Employee's participation in any Employee Benefits to lapse and shall
continue to provide the Employee with the Automobile Benefits described in
Section 4(d), reimbursement or payment of professional and club dues, and the
cost of the Employee's continuing legal education requirements.

               (i)     the requirement that the Employee perform his principal
        executive functions more than thirty (30) miles from his Terre Haute,
        Indiana office.

               (ii)    a reduction of 10% 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 similar to the reduction in the base
        salary of all other executive officers of the Bank;

               (iii)   the removal of the Employee from participation in any
        incentive (including, but not limited to, the LTIP) or performance-based
        compensation plans or bonus plans unless the Bank terminates
        participation in the plan or plans with respect to all other executive
        officers of the Bank;

               (iv)    the failure by the Bank to continue to provide the
        Employee with the base salary, bonuses or benefits provided for under
        Sections 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 Bank which would
        directly or indirectly reduce any such benefits or deprive the Employee
        of any such benefit enjoyed by him, unless part of an institution-wide
        reduction and applied similarly to all other executive officers of the
        Bank;

               (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 Board
        or a failure on the part of First Financial Corporation or its successor
        to honor any obligation to nominate Employee to the Board of Directors
        of First Financial Corporation or its successor;

               (vii)   a material diminution or reduction in the Employee's
        responsibilities or authority (including reporting responsibilities) in
        connection with his employment with the Bank; or

               (viii)  a material reduction in the secretarial or administrative
        support of the Employee.


<PAGE>

        (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.

               (1)     Within five business days before or after a Change in
        Control as defined in Section 10(a)(4) of this Agreement which was not
        approved in advance by a resolution of a majority of the Directors of
        the Bank, the Bank shall (i) deposit, or cause to be deposited, in a
        grantor trust (the "Trust"), designed to conform with Revenue Procedure
        93-64 (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 Sections 10(a)(1), (2) and (3) hereof if those payment provisions
        become applicable, and (ii) 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.

               (2)     During the twelve (12) consecutive month period following
        the date on which the Bank 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 Sections 10(a)(1), (2) and (3). Within three business days
        after receiving said notice, the trustee of the Trust shall send a copy
        of the notice to the Bank via overnight and registered mail, return
        receipt requested. On the tenth (10th) business day after mailing said
        notice to the Bank, the trustee of the Trust shall pay the Employee the
        amount designated therein in immediately available funds, unless prior
        thereto the Bank 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 Bank, to non-appealable binding arbitration for a determination
        of the amount payable to the Employee pursuant to Sections 10(a)(1), (2)
        and (3) hereof, 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 trustee 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. The
        Employee, the Bank 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 Bank, and in no event shall the
        trustee be liable to either party for making the payments as determined
        by the arbitrator.

               (3)     Upon the earlier of (i) any payment from the Trust to the
        Employee, or (ii) the date twelve (12) months after the date on which
        the Bank makes the deposit referred to in the first paragraph of this
        subsection (d)(1), the trustee of the Trust shall pay to the Bank the
        entire balance remaining in the segregated account maintained for the
        benefit of the Employee. 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 Section 10(d)(2)
        above, the trustee of the Trust shall continue to hold, in trust, the
        deposit referred to in Section 10(b)(1) until a final decision is
        rendered by the arbitrator pursuant to Section 10(b)(2) above.

        (e)    In the event that any dispute arises between the Employee and the
Bank as to the terms or interpretation of this Agreement or the obligations
thereunder, including this Section 10, whether instituted by formal legal
proceedings or submitted to arbitration pursuant to Section 10(d)(2), including
any action that the Employee takes to enforce the terms of this Section 10 or to
defend against any action taken by the Bank, 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 Section 10(d)(2), a determination is
made by the arbitrator that the expenses should be paid by the Bank. Such
reimbursement shall be paid within ten (10) days of Employee's furnishing to the
Bank 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.

<PAGE>

        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
Bank and if decided by arbitration, the arbitrator, pursuant to Section
10(d)(2), determines the Employee to be responsible for the Bank's expenses,
then the Bank 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 Bank 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 Bank.

        11.    Stock Options. First Financial Corporation will permit the
Employee or his personal representative(s) or heirs, during a period of three
months following Employee's termination of employment by the Bank for the
reasons set forth in Subsections 8(d), 8(e), 10(a) or 10(b), to require First
Financial Corporation, upon written request, to purchase all outstanding,
unexpired stock options previously granted to the Employee under any stock
option plan then in effect to the extent the options are vested at a cash
purchase price equal to the amount by which the aggregate "fair market value" of
the shares subject to such options exceeds the aggregate option price for such
shares. For purposes of this Agreement, the term "fair market value" shall mean
the higher of (a) the average of the highest asked prices for shares in the
over-the-counter market as reported on the NASDAQ system or other exchange if
the shares are traded on such system for the 30 business days preceding such
termination, or (b) the average per share price actually paid for the most
highly priced 1% of the shares acquired in connection with the Change of Control
by any person or group acquiring such control.

        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.    Successors and Assigns.

               (a)     Bank. This Agreement shall not be assignable by the Bank,
        provided that this Agreement shall inure to the benefit of and be
        binding upon any corporate or other successor of the Bank which shall
        acquire, directly or indirectly, by merger, consolidation, purchase or
        otherwise, all or substantially all of the assets or stock of the Bank.

               (b)     Employee. Since the Bank 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 Bank; 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.

        14.    Amendments.  No amendments or additions to this Agreement shall
be binding unless made in writing and signed by the Bank, First Financial
Corporation and the Employee, except as herein otherwise specifically provided.

        15.    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.

        16.    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.


<PAGE>

        17.    Entire Agreement.  This Agreement, together with any
understanding or modifications thereof as agreed to in writing by the parties,
shall constitute the entire Agreement between the parties hereto.

        18.    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.

        19.    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.

        20.    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:      Terre Haute First National Bank
                                    Attn: Michael A. Carty
                                    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.



<PAGE>


        IN WITNESS WHEREOF, the parties have executed this Agreement on this
10th day of July, 2002.


                                    TERRE HAUTE FIRST NATIONAL BANK



                                    SIGNATURE
                                    Michael A. Carty, Secretary/Treasurer
ATTEST
Signature
Thomas G. Woodason
Title: Controller


                                    EMPLOYEE


                                    Signature
                                    Norman L. Lowery



        The undersigned, First Financial Corporation, sole shareholder of the
Bank, agrees that if it shall be determined for any reason that any obligation
on the part of the Bank is unenforceable for any reason, First Financial
Corporation agrees to honor the terms of this Agreement and continue to make any
such payments due hereunder to Employee or to satisfy any such obligation
pursuant to the terms of this Agreement. The undersigned further agrees to
nominate Employee to the Board of Directors of First Financial Corporation
during the term of this Agreement.

                                    FIRST FINANCIAL CORPORATION

                                    Signature
                                    Donald E. Smith, President

ATTEST
Signature Michael A. Carty
Title: Secretary /Treasurer





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>7
<FILENAME>c73127exv10w3.txt
<DESCRIPTION>2001 LONG-TERM INCENTIVE PLAN OF THE CORPORATION
<TEXT>
<PAGE>


Exhibit 10.3 2001 Long-Term Incentive Plan of the Corporation

                           FIRST FINANCIAL CORPORATION
                          2001 LONG-TERM INCENTIVE PLAN


1.      PURPOSE OF THE PLAN.

        The purpose of this Plan is to promote the best interests of First
Financial Corporation and its Subsidiaries, and to enhance stockholder value of
First Financial Corporation by attracting and retaining directors, officers, and
other key employees and providing them with an incentive to give their maximum
effort to the continued growth and success of First Financial Corporation and
its Subsidiaries. The Plan is intended to constitute an unfunded, nonqualified
plan of deferred compensation for a select group of management or highly
compensated employees, within the meaning of Section 201(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), that is exempt
from the requirements of Title 1 of ERISA.

2.      DEFINITIONS.

        Wherever the initial letter of the following words or phrases is
capitalized in the Plan, including any Exhibits or Supplements, they will have
the respective meaning set forth below unless otherwise defined herein:

        (a)    "ACCOUNT" shall mean the account established and administered for
the benefit of a Participant under this Plan, reflecting Awards made to the
Participant under this Plan and changes in the value of Awards made hereunder.

        (b)    "AWARD" shall mean the cash compensation payable to a Participant
pursuant to the Plan and the Participant's Award Document.

        (c)    "AWARD DOCUMENT" shall mean a written document, including
schedules thereto, issued by the Committee to a Participant, setting forth the
terms and conditions of the Award. No Award under this plan is valid unless it
is set forth in an Award Document in substantially the form attached hereto as
Appendix A. In case of conflict between the Award Document and this Plan, the
terms of the Award Document shall govern unless the inconsistent term is one for
which the Committee lacks authority to vary from the terms set forth in this
Plan.

        (d)    "BOARD OF DIRECTORS" shall mean the Board of Directors of First
Financial Corporation.

        (e)    "CAUSE" means any of the following:

        (1)    An intentional act of fraud, embezzlement, theft, or personal
    dishonesty; willful misconduct, or breach of fiduciary duty involving
    personal profit by the Participant in the course of his or her 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;

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

<PAGE>


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

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

               (5)     Removal or permanent prohibition of the Participant from
        participating in the conduct of Company's affairs by an order issued
        under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act,
        12USC1818(e)(4) and (g)(1).

        (f)    "CHANGE IN CONTROL" shall mean any of the following:

               (1)     MERGER. The Company merges into or consolidates with
        another corporation or business entity, or merges another corporation or
        business entity into the Company, and as a result less than 50% of the
        combined voting power of the resulting corporation or business entity
        immediately after the merger or consolidation is held by persons who
        were the holders of the Company's voting securities immediately before
        the merger or consolidation;

               (2)     ACQUISITION OF SIGNIFICANT SHARE OWNERSHIP. A report on
        Schedule 13D, another form or schedule (other than Schedule 13G), or a
        successor form or schedule is filed or is required to be filed under
        Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the
        report discloses that the filing person or persons acting in concert has
        or have become the beneficial owner of 20% or more of a class of the
        Company's voting securities after the effective date of this Plan, but
        this subsection 2(f)(2) shall not apply to beneficial ownership of
        voting shares of the Company held in a fiduciary capacity by a
        Subsidiary of Company or to beneficial ownership of voting shares of the
        Company held by an employee stockownership plan of the Company or a
        Subsidiary;

               (3)     CHANGE IN BOARD COMPOSITION. During any period of two
        consecutive years, individuals who constitute the Company's Board of
        Directors at the beginning of the two-year period cease for any reason
        to constitute at least a majority thereof; provided, however, that - for
        purposes of this Subsection 2(f)(3) - each director who is first elected
        by the Company's Board of Directors (or first nominated by the Company's
        Board of Directors for election by stockholders) by a vote of at least
        two-thirds (2/3) of the directors who were directors at the beginning of
        the period, shall be deemed to have been a director at the beginning of
        the two-year period.

               (4)     SALE OF ASSETS.  The Company sells to any third party all
        or substantially all of the Company's assets.

        (g)    "COMPANY" shall mean First Financial Corporation and its
Subsidiaries.

        (h)    "COMMITTEE" shall mean the Compensation Committee of the Board of
Directors of the Company.

        (i)    "DISABILITY" shall mean if the Participant is covered by a
disability policy of the Company, total disability as defined in such policy
without regard to any waiting period. If the Participant is not covered by such
a policy, Disability means the Participant suffers a sickness, accident or
injury that, in the judgment of a physician satisfactory to the Committee,
prevents the Participant from performing substantially all of his or her normal
duties.

        (j)    "GOOD REASON" shall mean, following a Change in Control, the
occurrence without the express prior written consent of the Participant of any
of the events or conditions described in clauses (2)(j)(1) through 2(j)(5)
below:
<PAGE>

                      (1)    CHANGE IN OFFICE, POSITION OR TERMINATION AS A
               DIRECTOR. Failure to elect or reelect or otherwise to maintain
               the Participant in the office or position, or a substantially
               equivalent office or position, of or with the Company, that the
               Participant held immediately before the Change in Control, or the
               removal or failure to nominate the Participant as a director of
               the Company, provided the Participant was a director of the
               Company immediately before the Change in Control.

                      (2)    ADVERSE CHANGE IN THE SCOPE OF THE PARTICIPANT'S
                             DUTIES, COMPENSATION OR BENEFITS.

                             (a)    A significant adverse change in the nature
                      or scope of the authorities, powers, functions,
                      responsibilities or duties associated with the
                      Participant's position compared to the nature or scope
                      of the authorities, powers, functions, responsibilities
                      or duties associated with the position immediately
                      before the Change in Control;

                             (b)    A material reduction in the aggregate of the
                      Participant's annual compensation, unless part of an
                      institution-wide reduction. For this purpose, "material"
                      means a reduction of 10% or more in such compensation, and
                      annual compensation means the Participant's total
                      compensation from the Company for a calendar year,
                      including compensation deferred at the election of the
                      Participant, and including any salary reduction
                      contributions made by the Company, for, or on behalf of
                      the Participant under a qualified or other compensation,
                      benefit, or retirement plan of the Company. Compensation
                      taken into account for purposes of this Subsection
                      2(j)(2)(b) shall be calculated without regard to any
                      Internal Revenue Code limitations;

                             (c)    The termination or denial of the
                      Participant's rights to benefits under the Company's
                      benefit, compensation or incentive plans and
                      arrangements or reduction in the scope or value thereof,
                      which situation is not remedied within 10 calendar days
                      after written notice to the Company from the
                      Participant; or

                             (d)    Termination or denial of the Participant's
                      rights to benefits under this Plan and/or the
                      Participant's Award Document, other than for Cause as
                      provided in Subsection 8(d), which situation is not
                      remedied within 10 calendar days after written notice to
                      the Company from the Participant.

                      (3)    ADVERSE CHANGE IN CIRCUMSTANCES. The Participant
               determines that a change in circumstances has occurred after a
               Change in Control, including, without limitation, a change in the
               scope of the business or other activities for which the
               Participant is responsible compared to his or her
               responsibilities immediately before the Change in Control or a
               material reduction in the Participant's secretarial or
               administrative support, (a) which renders the Participant
               substantially unable to carry out, substantially hinders the
               Participant's performance of, or causes the Participant to suffer
               a substantial reduction in any of the authorities, powers,
               functions, responsibilities or duties associated with the office
               or position held by the Participant immediately before the Change
               in Control and (b) which situation is not remedied within 10
               calendar days after written notice to the Company from the
               Participant of such determination. Provided the Participant's
               determination is made in good faith, the Participant's
               determination will be conclusive and binding upon the parties
               hereto. The Participant's determination will be presumed to have
               been made in good faith, unless the Company establishes by clear
               and convincing evidence that it was not made in good faith;

                      (4)    LIQUIDATION OR MERGER. The liquidation,
               dissolution, merger, consolidation or reorganization of the
               Company or transfer of all or substantially all of the business
               or assets of either the Company to a person not affiliated with
               the Company, unless the successor or successors (by liquidation,
               merger, consolidation, reorganization, transfer or otherwise) to
               which all or substantially all of the business or assets have
               been transferred (directly or by operation of
<PAGE>
               law) assumes all duties and obligations of the Company under this
               Plan and Awards hereunder; or

                      (5)    RELOCATION OF THE PARTICIPANT. The Company
               relocates its principal executive offices, or requires the
               Participant to have his or her personal residence or principal
               location of work change, to any location that is more than 30
               miles from the location thereof immediately before the Change in
               Control, or requires the Participant to travel away from his or
               her office in the course of discharging his or her
               responsibilities or duties at least 10% more (in terms of
               aggregate days in any calendar year or in any calendar quarter
               when annualized for purposes of comparison to any prior year)
               than was required of the Participant in any of the three full
               years immediately before the Change in Control.

        (k)    "NORMAL RETIREMENT AGE" shall mean age 65.

        (l)    "PARTICIPANT" shall mean a director or Top Hat Employee of the
Company designated by the Committee to be a participant in the Plan. A director
who is also an employee of the Company must be a Top Hat Employee in order to
participate in the Plan.

        (m)    "PERSON" or "PERSONS" shall mean individuals, corporations,
partnerships, trusts, associations, joint ventures, pools, syndicates, sole
proprietorships, unincorporated organizations or other entities.

        (n)    "PLAN" shall mean the First Financial Corporation 2001 Long-Term
Incentive Plan.

        (o)    "SUBSIDIARY" shall mean a corporation more than 50% of whose
voting stock is owned or controlled by the Company. The term shall also mean any
other entity or organization of which the Company owns or controls a majority of
its voting power, including, but not limited to, a partnership, limited
partnership, limited liability company, trust, association, joint venture, pool,
syndicate, unincorporated organization, or other entity.

        (p)    "TOP HAT EMPLOYEES" shall mean employees who are members of a
select group of management or highly compensated employees within the meaning of
Section 201(2) of ERISA.

3.      AWARDS AND PLAN ADMINISTRATION.

        (a)    COMMITTEE. The Plan shall be administered by the Committee. The
Committee may appoint and employ agents and advisors, including, but not limited
to, legal counsel, to render advice and assistance to the Committee.

        (b)    AWARDS. The Committee shall set forth the terms and conditions of
the Participant's Awards in an Award Document in substantially the form attached
hereto as Appendix A. The amount of a Participant's Award may take into account
such factors as the Committee determines in its discretion, including, but not
limited to, the nature of the services rendered by the Participant, his or her
current and potential contributions to the success of the Company, the
Participant's annual compensation or board fees, and such other factors as the
Committee, in its sole discretion, considers relevant. An Award may increase in
value as provided in the Award Document.

<PAGE>


        (c)    COMMITTEE AUTHORITY. The Committee is authorized to interpret and
construe the Plan and Award Documents and to adopt such rules, regulations and
procedures for the administration of the Plan as the Committee deems necessary
or advisable, provided the Committee may take action only upon the vote of a
majority of its members. The Committee's interpretations of the Plan and Award
Documents, and all decisions and determinations made by the Committee, shall be
conclusive and binding on all parties, including the Company and any person
claiming an Award under the Plan. The Committee shall have sole authority, in
its discretion, to select who among eligible persons shall be Participants, the
amount and other terms and conditions of Awards credited to a Participant's
Account, the performance criteria governing the amount of additional Awards, the
period to which the performance criteria will be applied, which shall consist of
one or more calendar years, and the schedule under Subsection 3(d) for vesting
of Accounts; provided, however, that an individual who is a Participant and a
member of the Committee must abstain from taking action on a matter before the
Committee that would have a direct effect on his eligibility to Participate in
the Plan, receive Awards under the Plan, or his vesting schedule under the Plan.
No Award or Award Document may provide for (1) an Award to a person who is not
an outside Director or Top Hat Employee, (2) an Award for a fiscal year
beginning after December 31, 2009, or (3) a vesting schedule that is
inconsistent with Subsection 3(d) (or a change in the vesting schedule
originally stated in the Award Document) in the case of an Award to a
Participant who does not have five years of continuous employment or director
service. The performance criteria and other terms and conditions stated in Award
Documents may, but need not be, uniform from one Award Document to the next.

        Neither the Committee nor the Board of Directors shall have any
authority to repeal or revoke the terms and provisions of an Award stated in an
Award Document or reduce the amount of any Award without the Participant's
written consent, except in the case of a Participant who is terminated for Cause
(as defined in Section 8(d) of this Plan). The Committee shall have the
authority to terminate a Participant's participation in the Plan and his or her
right to previous Awards hereunder if the Committee determines that Cause
exists.

        (d)    VESTING SCHEDULE FOR PARTICIPANT'S WHO DO NOT HAVE FIVE YEARS OF
CONTINUOUS EMPLOYMENT OR DIRECTOR SERVICE. Unless otherwise determined in
connection with a Participant's initial designation as a Participant, a
Participant's Account shall be subject to a vesting schedule established by the
Committee if the Participant has been employed by or has served as a director of
the Company for fewer than five


<PAGE>

continuous years. The vesting schedule shall be stated in the Award Document.
The vesting schedule stated in the Award Document may not be changed by the
Committee without the Participant's written consent.

        (e)    ANNUAL ACCOUNT STATEMENT. The Committee may, but shall not be
obligated to, issue to each Participant an annual statement or more frequent
statement of a Participant's Account. The statement of a Participant's Account
may take the form of an updated Award Document, in which case the updated Award
Document shall supersede the Award Documents previously issued to the
Participant by the Committee.

4.      ELIGIBILITY.

        With the exception of those Participants exempted from the age
requirement of this Section by the Committee at the Plan's inception, only
outside directors and Top Hat Employees of the Company who are age 65 or under
shall be eligible to be Participants under the Plan, provided that said outside
director or Top Hat Employee is designated as a Participant by the Committee in
writing. A director who is also an employee of the Company must be a Top Hat
Employee in order to be eligible to participate in the Plan. A designated
director or Top Hat Employee of the Company shall become a Participant as of the
later of the Effective Date or the date specified by the Committee. Except as
otherwise provided in the first sentence of this Section, a Participant who
remains employed with or continues to serve as a director for the Company will
not be eligible to receive Awards under Plan for the years beginning after the
year in which he or she attains "Normal Retirement Age." Except as otherwise
provided in the first sentence of this Section, the Committee shall have no
authority to change the eligibility criteria of this Section 4.

5.      ESTABLISHMENT OF ACCOUNT; NO SEGREGATION OF ASSETS.

        The Company shall establish on its books of account a separate Account
for each Participant. Accounts shall be maintained solely for accounting
purposes. No assets of the Company shall be segregated or subject to any trust
for any Participant's benefit by reason of the establishment of the
Participant's Account. This Plan and Awards made hereunder shall be unfunded and
shall constitute a mere unsecured promise by the Company to make benefit
payments in the future. Notwithstanding any other provision of this Plan or the
Award Document, neither a Participant nor his or her designated beneficiary(ies)
shall have any preferred claim on, or any beneficial ownership interest in, any
assets of the Company prior to the time benefits are paid as provided herein and
in the Award Document. All rights created under this Plan and the Award
Documents shall be mere unsecured contractual rights of the Participant against
the Company.



<PAGE>



PERFORMANCE CRITERIA.


        The Committee shall: (a) establish performance criteria governing
Awards; (b) the length of the performance period, which may be one or more
calendar years; (c) the performance objectives to be achieved during the
performance period (including defining terms, the exclusion of extraordinary
items or any other adjustments considered proper); and, (d) determine the
measure of whether and to what degree the objectives have been attained, which
determination shall be conclusive.

7.      PAYMENT OF AWARDS.

        (a)    CASH PAYMENTS ONLY. The Committee shall cause the value of the
Participant's Account to be paid in cash only. No Award shall be made if the
Committee concludes that the performance criteria to which the Award is subject
was not satisfied and no payment of an Award shall be made if the Participant is
terminated for Cause. This subsection 7(a) may not be superceded by any action
of the Board of Directors or the Committee in an Award Document or otherwise.

        (b)    WHEN PAYMENTS BEGIN. Payment of the cash value of a Participant's
Account shall begin on the earlier of: (1) January 1, 2015, or (2) "Normal
Retirement Age." It is not necessary for a Participant to terminate his or her
employment or director service as a condition to receiving payment of the cash
value of his or her Account. Notwithstanding the preceding sentence, if a
Participant terminates due to "Disability", the Committee, in its discretion,
may defer payment of the cash value of a Participant's Account until such time
as the benefits paid under this Plan will not offset or reduce the amount of
benefits received by the Participant under the Company's disability plan if the
two following conditions exist: (1) Participant's service with the Company
terminates because of "Disability", as provided in Subsection 8(b)(3) and, (2)
payment of the cash value of the Participant's Account would have the effect of
offsetting or reducing disability benefits otherwise payable to the Participant
under the Company's disability plan.

8.      TERMINATION.

        (a)    NO ADDITIONAL AWARDS AFTER TERMINATION.  A Participant whose
employment or director service terminates shall not be entitled to any
additional Awards under this Plan on and after termination.


<PAGE>

        (b)    EXISTING AWARDS AFTER TERMINATION.  Pursuant to Subsection 7(b)
of this Plan, any Participant whose employment or director service with the
Company terminates:

        (1)    On or after the date specified according to Subsection 7(b) of
    this Plan (which date may be January 1, 2015, or "Normal Retirement Age")
    shall receive payment of the vested portion of the cash value of his or her
    Account, with interest on the Account balance credited at the rate specified
    in the Award Document;

        (2)    Before the date specified according to Subsection 7(b) of this
    Plan, (which date may be January 1, 2015, or "Normal Retirement Age")
    excepting termination because of death, Disability or Cause and termination
    within twelve months after a Change in Control, shall receive payment of the
    vested portion of the cash value of his or her Account balance as of
    December 31 of the year immediately before the year in which termination
    occurred. Payment shall be made according to the Participant's Award
    Document;

        (3)    Because of Disability occurring before the date specified
    according to Subsection 7(b) of this Plan (which date may be January 1,
    2015, or "Normal Retirement Age") shall receive payment according to the
    Participant's Award Document, however, pursuant to Subsection 7(b), the
    Committee may, in its discretion, defer payment of the cash value of the
    Participant's Account until such time as the benefits paid under this Plan
    will not offset or reduce the amount of benefits received by the Participant
    under the Company's disability plan. Notwithstanding the preceding sentence,
    if a Participant's Award Document specifies the form of payment (single sum
    payment or 180 monthly installment payments) to be made to a
    beneficiary(ies), the Committee may not change the form of payment without
    the consent of the beneficiary(ies).

        (4)    Within 12 months after a Change in Control, but before the date
    specified according to Subsection 7(b) of this Plan (which date may be
    January 1, 2015, or "Normal Retirement Age"), shall receive the Change in
    Control benefit set forth in his or her Award Document, provided that
    termination is not for Cause or because of death or Disability. Termination
    of a Participant's employment or director service within 12 months after a
    Change in Control includes, but is not limited to, termination by the
    Participant for Good Reason within 12 months after a Change in Control.
    Payment shall be made according to the Participant's Award Document.

<PAGE>

        (c)    PARTICIPANT'S DEATH. If a Participant's employment or director
service with the Company terminates because of Participant's death prior to
payment of his Account balance, the Participant's designated beneficiary(ies),
as provided in Section 10, or the Participant's estate, if there is no valid
beneficiary designation on file at the time of the Participant's death, shall
receive payment of the Participant's vested Account in either a single sum or
180 monthly payments, as determined by the Committee in its sole discretion.
Notwithstanding the preceding sentence, if a Participant's Award Document
specifies the form of payment (lump sum or 180 monthly installments), the
Committee may not change the form of payment without the written consent of the
beneficiary(ies).

    (d) TERMINATION FOR CAUSE. A Participant's participation in this Plan may be
    terminated by the Committee and his or her right to Awards hereunder,
    including Awards and the cash value of Awards previously made to the
    Participant may be forfeited for Cause. The Committee's determination that a
    Participant's participation shall be terminated for Cause shall be
    conclusive and binding on the Company, the Participant, his or her
    beneficiary(ies) and all other persons. If a Participant's participation is
    terminated for Cause, he or she shall forfeit all rights and interests in
    this Plan, and in his or her right to Awards hereunder, including Awards and
    the cash value of Awards previously made or that may be made thereafter.

9.      NONASSIGNABILITY.

        No benefit, interest, Accounts or any payment under this Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment by creditors of the Participant
or the Participant's designated beneficiary(ies), either voluntarily or
involuntarily. Any attempt to alienate, sell, transfer, assign, pledge, attach,
garnish or otherwise encumber any benefit, interest, account, or any payment
under the Plan shall be void and of no legal effect.

10.     BENEFICIARY DESIGNATION.

        If a Participant dies before distribution to him or her of all amounts
payable under the Plan, the amounts otherwise distributable to the Participant,
if living, shall be distributed to his or her designated beneficiary or
beneficiaries. All beneficiary designations shall be made in the form prescribed
by the Committee from time to time and shall be delivered to the Committee. The
Participant shall designate a beneficiary or beneficiaries by filing a written
designation with the Committee. The Participant may revoke or modify the
designation at any time


<PAGE>

by filing a new designation. Designations shall be effective only if signed by
the Participant and accepted by the Committee during the Participant's lifetime.
The Participant's beneficiary designation shall be deemed automatically revoked
if the beneficiary predeceases the Participant or if the Participant names a
spouse as beneficiary and the marriage is subsequently dissolved. If there is no
effective beneficiary designation on file at the time of the Participant's
death, distribution of the amounts otherwise payable to the deceased Participant
under the Plan shall be made to the personal representative of his or her
estate. If the beneficiary designated by the Participant survives the
Participant but dies before receiving all distributions hereunder, all amounts
otherwise payable to the deceased beneficiary shall be paid to the deceased
beneficiary's estate, unless the Participant's beneficiary designation provides
otherwise. The Committee shall have no responsibility for the validity of any
beneficiary designation made by a Participant

11.     TAXES.

        The Company shall be entitled to pay or withhold the amount of any tax
it believes is required as a result of the payment of any amounts under this
Plan. The Company may defer making payments hereunder until arrangements
satisfactory to the Company have been made with respect to any such withholding
obligations. The Company shall have the right to rely on a written opinion of
legal counsel, which may be independent legal counsel or legal counsel regularly
employed by the Company, if any question should arise as to the payment or
withholding of taxes.

12.     REGULATORY APPROVALS AND RULE 16b-3.

        It is intended that the Plan and any Award made to a person subject to
Section 16 of the Securities Exchange Act of 1934, and any transaction or
election hereunder by any such person, meet all the requirements of Rule 16b-3,
if the Plan or Awards made hereunder are subject to Section 16 of the Securities
Exchange Act of 1934. If Section 16 of the Securities Exchange Act is applicable
and if any provision of the Plan or any Award hereunder would disqualify the
Plan or such Award under, or would not comply with, Rule 16b-3, such provision
or Award shall be construed or deemed to conform to Rule 16b-3.

<PAGE>

13.     CLAIMS.

        (a)    CLAIMS PROCEDURE.

               (1) PROCEDURES GOVERNING THE FILING OF BENEFIT CLAIMS. All
Benefit Claims must be filed on the appropriate claim forms available from the
Committee or in accordance with the procedures established by the Committee for
claim purposes. A "Benefit Claim" means a request for a Plan benefit or
benefits, made by a Claimant or by an authorized representative of a Claimant,
that complies with the Plan's procedures for making benefit claims. "Claimant"
means a Participant, a surviving spouse of a Participant, or a beneficiary who
is claiming entitlement to the payment of any benefit under the Plan.

        (2) NOTIFICATION OF BENEFIT DETERMINATIONS. The Committee will notify a
Claimant, in accordance with Section A-3 below, of the Plan's benefit
determination within a reasonable period of time after receipt of a Benefit
Claim, but not later than 90 days (45 days in the case of a Disability Claim)
after receipt of the Benefit Claim by the Plan.

    If special circumstances require an extension of time for processing the
    Benefit Claim, the Committee will notify the Claimant of the extension prior
    to the termination of the initial period described above. The notice will
    indicate the special circumstances requiring the extension of time and the
    date by which the Plan expects to make the benefit determination. In no
    event will the extension exceed a period of 90 days from the end of the
    initial period.


    In the case of a Disability Claim, the extension period will not exceed 30
    days, unless prior to the end of first 30-day extension period, the
    Committee determines that, due to matters beyond its control, a decision
    cannot be rendered within the extension period, in which case the period for
    making the determination may be extended for an additional 30 days. Every
    Disability Claim notice will specifically explain the standards on which
    entitlement to a benefit is based, the unresolved issues that prevent a
    decision on the claim, the additional information needed to resolve those
    issues and the Claimant's right to provide the specified information within
    45 days. If the extension is in effect due to the Claimant's failure to
    submit information necessary to decide a Disability Claim, the period for
    making the benefit determination will be tolled from the date on which the
    notice of the extension is sent to the Claimant until the date on which the
    Claimant responds to the request for information. The term "Disability
    Claim" means a request for a Plan benefit made by a Claimant due to the
    purported Disability of a Plan Participant.


         (3). MANNER AND CONTENT OF NOTIFICATION OF BENEFIT DETERMINATIONS. All
notices given by the Committee under the Plan will be given to a Claimant, or to
his authorized representative, in a manner that satisfies the standards of 29
CFR 2520.104b-1(b) as appropriate with respect to the particular material
required to be furnished or made available to that individual. The Committee may
provide a Claimant with either a written or an electronic notice of the Plan's
benefit determination. Any electronic notification will comply with the
standards imposed by 29 CFR 2520.104b-1(c)(1)(i), (iii) and (iv). In the case of
an Adverse Benefit Determination, the notice will set forth, in a manner
calculated to be understood by the Claimant:

        (a)    The specific reasons for the adverse determination;

        (b)    Reference to the specific Plan provisions (including any internal
               rules, guidelines, protocols, criteria, etc.) on which the
               determination is based;

        (c)    A description of any additional material or information necessary
               for the Claimant to complete the claim and an explanation of why
               such material or information is necessary;

        (d)    For a Disability Claim, the identification of any medical or
               vocational experts whose advice was obtained on behalf of the
               Plan in connection with Claimant's Adverse Benefit Determination,
               without regard to whether the advice was relied upon; and

        (e)    A description of the Plan's review procedures and the time limits
               applicable to such procedures.

        The term "Adverse Benefit Determination" means a denial, reduction, or
termination of, or a failure to provide or make payment (in whole or in part)
for, any benefit claimed to be payable under the Plan.

<PAGE>

        (4). APPEAL OF ADVERSE BENEFIT DETERMINATIONS. A Claimant who receives
an Adverse Benefit Determination and desires a review of that determination must
file, or his authorized representative must file on his behalf, a written
request for a review of the Adverse Benefit Determination, not later than 60
days (180 days for a Disability Claim) after receiving the determination.

        The written request for a review must be filed with the Committee. Upon
receiving the written request for review, the Committee will advise the
Claimant, or his authorized representative, in writing that:

        (a)    The Claimant, or his authorized representative, may submit
               written comments, documents, records, and any other information
               relating to the claim for benefits; and

        (b)    The Claimant will be provided, upon request of the Claimant or
               his authorized representative, reasonable access to, and copies
               of, all documents, records, and other information relevant to the
               Claimant's Benefit Claim, without regard to whether those
               documents, records, and information were considered or relied
               upon in making the Adverse Benefit Determination that is the
               subject of the appeal.

        (5) BENEFIT DETERMINATION ON REVIEW. All appeals by a Claimant of an
Adverse Benefit Determination will receive a full and fair review by the
Committee. In the case of a Disability Claim, the Committee will not be: (i) the
party who made the Adverse Benefit Determination that is the subject of the
appeal, nor (ii) the subordinate of that party. In performing this review for a
Disability Claim, the Committee will take into account all comments, documents,
records, and other information submitted by the Claimant (or the Claimant's
authorized representative) relating to the claim, without regard to whether the
information was submitted or considered in the initial benefit determination,
and will not afford deference to the initial Adverse Benefit Determination. For
a Disability Claim, the Committee will consult with a healthcare professional
who has appropriate training and experience in the field of medicine involved in
the medical judgment and who was not consulted in connection with the Adverse
Benefit Determination and who is not the subordinate of such an individual if
the named fiduciary believes that such a consultation is necessary to properly
complete the review process.

        (6) NOTIFICATION OF BENEFIT DETERMINATION ON REVIEW. The Committee will
notify a Claimant, in accordance with Section 13(a)(7) below, of the Plan's
benefit determination on review within a reasonable period of time, but not
later than 60 days (45 in the case of a Disability Claim) after the Plan's
receipt of the Claimant's request for review of an Adverse Benefit
Determination. If, however, special circumstances require an extension of time
for processing the review by the Committee, the Claimant will be notified, prior
to the termination of the initial 60 (or 45) day period, of the special
circumstances requiring the extension and the date by which the Plan expects to
render the Plan's benefit determination on review, which will not be later than
120 days (90 days in the case of a Disability Claim) after receipt of a request
for review.

        If the extension period is in effect for a Disability Claim but the
extension is due to the Claimant's failure to submit information necessary to
decide a claim, the period for making the benefit determination on review will
be tolled from the date on which notification of the extension is sent to the
Claimant until the date on which the Claimant responds to the request for
additional information.

        (7) MANNER AND CONTENT OF NOTIFICATION OF BENEFIT DETERMINATION ON
REVIEW. The Committee will provide a Claimant with notification of its benefit
determination on review in a method described in Section 13(a)(3) above.

        In the case of an Adverse Benefit Determination on review, the
notification must set forth, in a manner calculated to be understood by the
Claimant:

        (a)    The specific reasons for the adverse determination on review;

        (b)    Reference to the specific Plan provisions (including any internal
               rules, guidelines, protocols, criteria, etc.) on which the
               benefit determination on review is based;

<PAGE>

        (c)    A statement that the Claimant is entitled to receive, upon
               request and free of charge, reasonable access to, and copies of,
               all documents, records and other information relevant to the
               Claimant's Benefit Claim, without regard to whether those records
               were considered or relied upon in making the Adverse Benefit
               Determination on review, including any reports, and the
               identities, of any experts whose advice was obtained.

        (5)    COURT ACTION. No Participant or beneficiary shall have the right
    to seek judicial review of a denial or limitation of benefits, or to bring
    any action in any court to enforce a claim for benefits, prior to filing a
    claim for benefits or exhausting his or her rights to review under this
    Section 13.

14.     PLAN ADMINSTRATOR.

        The Company shall be the plan administrator under this Plan. The Company
may delegate aspects of the management and operation responsibilities of the
Plan, including the employment of advisors and the delegation of ministerial
duties to qualified individuals.

15.     EFFECTIVE DATE OF THE PLAN.

        The Plan is effective January 1, 2001.

16.     LIMITATIONS ON LIABILITY.

        Notwithstanding any of the proceeding provisions of this Plan, none of
the Company and each individual acting as an employee or agent of any of them
shall be liable to any Participant or beneficiary for any claim, loss, liability
or expense incurred in connection with the Plan, except when the same shall have
been judicially determined to be due to the gross negligence or willful
misconduct of such person. By participating in the Plan, each Participant agrees
to release and hold harmless the Company and its Subsidiaries (and their
respective directors, officer and employees) and the Committee from and against
any tax liability, including, but not limited to, interest and penalties,
incurred by the Participant in connection with his receipt of Awards under this
Plan and the deferral, and payment thereof.

17.     INCAPACITY OF PARTICIPANT OR BENEFICIARY.

        If any person entitled to receive a distribution or payment under the
Plan is physically or mentally incapable of personally receiving and giving a
valid receipt for any payment due (unless prior claim therefore shall have been
made by duly qualified guardian or other legal representative), then, unless and
until claim therefore shall have been made by duly appointed guardian or other
legal representative of such person, the Committee may provide for such payment
or any part thereof to be made to any other person or institution then
contributing toward


<PAGE>

or providing for the care and maintenance of such person. Any such payment shall
be a payment for the account of such person and a complete discharge of any
liability of the Company under the Plan with respect to the amount of such
payment.

18.     MISCELLANEOUS.

        (a)    TERMINATION AND AMENDMENT. The Plan may be terminated, modified
or amended by the Board of Directors, provided, however, that no termination,
modification, or amendment of the Plan may, without the prior written consent of
the Participant, adversely affect the rights of a Participant in or to his or
her Account.

        (b)    GOVERNING LAW. The Plan shall be construed, regulated and
administered according to the laws of the State of Indiana without reference to
that state's choice of law principles, except in those areas preempted by the
laws of the United States of America in which case such laws will control.

        (c)    HEADINGS AND GENDER. The headings and subheadings in the Plan
have been inserted for convenience of reference only and shall not affect the
construction of the provisions hereof. In any necessary construction, the
masculine shall include the feminine and the singular, the plural, and vice
versa.

        (d)    NO RIGHT TO EMPLOYMENT OR DIRECTOR SERVICE. Neither the Plan or
Award Document confers upon any Participant: (1) any right to continued
employment by the Company, nor shall it interfere in any way with the right of
the Company to terminate any Participant's employment at any time, with or
without cause; (2) the right to continued service on the Board of Directors of
the Company, or the right of the Company's stockholder(s) to decline to elect
Participant or the right of the stockholder(s) of a Subsidiary of the Company to
decline to elect a Participant as a director of the Subsidiary.

        Neither this Plan nor any Award Document under this Plan is an
employment policy or employment contract.

        No Participant shall have any right or interest in or to the Plan assets
other than as specifically provided in the Plan or in the Award Document.

        (e)    COUNTERPARTS. This Plan may be executed in any number of
counterparts, each of which shall constitute but one and the same instrument and
may be sufficiently evidenced by any one counterpart.
<PAGE>

        (f)    EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.

        (g)    SEVERABILITY. In the event any provisions of the Plan or Award
Document shall be held to be illegal or invalid for any reason, such illegality
or invalidity shall not affect the remaining parts of the Plan or Award Document
and the Plan or Award Document shall be construed and endorsed as if such
illegal or invalid provisions had never been contained in the Plan or Award
Document.

        (h)    ACTION BY COMPANY. Any action required of or permitted by the
Company shall be by resolution of its Board of Directors or the Committee or by
a person or persons duly authorized by resolution of the Board of Directors or
the Committee.

        IN WITNESS WHEREOF, the Company has caused this 2001 Long-Term Incentive
Plan to be executed by its officers thereunder duly authorized, this 5th day of
February, 2002, but effective as of January 1, 2001.

                                           FIRST FINANCIAL CORPORATION



                                           By: /s/ Norman L. Lowery

                                               Norman L. Lowery, Vice President

ATTEST:

By: /s/ Michael Carty

    Michael Carty, Secretary


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>8
<FILENAME>c73127exv99w1.txt
<DESCRIPTION>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
<TEXT>
<PAGE>



Exhibit 99.1   Chief Executive Officer and Chief Financial Officer Certification
  pursuant to 18 U.S.C. Section 1350



                           PART II. OTHER INFORMATION
                                    FORM 10-Q
                       CERTIFICATION OF FINANCIAL RESULTS




We, Norman L. Lowery, CEO, and Michael A. Carty, Chief Financial Officer, of
First Financial Corp., hereby individually certify the following:

- -   This Form 10-Q fully complies with the requirements of Sections 13(a) or
    15(d) of the Securities Exchange Act of 1934, and,

- -   The information contained in the report fairly presents, in all material
    respects, the financial position and results of operations of First
    Financial Corp. as of and for the periods presented.





November 14, 2002                         By /s/ Norman L. Lowery
                                             ----------------------------
                                          Norman L. Lowery, CEO



November 14, 2002                         By /s/ Michael A. Carty
                                             ------------------------------
                                          Michael A. Carty, Treasurer & CFO

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
