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<SEC-DOCUMENT>0000950123-09-037500.txt : 20091123
<SEC-HEADER>0000950123-09-037500.hdr.sgml : 20091123
<ACCEPTANCE-DATETIME>20090824154658
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-09-037500
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20090824

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:		CORRESP

	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>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>Correspondence</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><U><B>First Financial Corporation</B><SUB style="font-size: 85%; vertical-align: text-bottom"><B>A. </B></SUB></U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 0pt"><B>P.O. Box 540, Terre Haute, In 47808-0540</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Always Close to Home
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Michael A. Carty</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Sr<B>. </B>Vice President &#038; CFO</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Phone 812-238-6264</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Fax: 812-238-6140</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">August&nbsp;24, 2009
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><U><B><I>VIA EDGAR</I></B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
Special Counsel<BR>
Division of Corporation Finance<BR>
United States Securities and Exchange Commission<BR>
450 Fifth Street, N.W.<BR>
Washington, D.C. 20549

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="1%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>

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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">RE:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Financial Corporation<br>
Form&nbsp;10-K for December&nbsp;31, 2008<br>
File No.&nbsp;0-16759</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Dear Mr.&nbsp;Windsor:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">First Financial Corporation (the &#147;Corporation&#148;) hereby submits the following responses to the
comments of the Securities and Exchange Commission, Division of Corporation Finance (the
&#147;Division&#148;) dated July&nbsp;22, 2009, concerning the Corporation&#146;s executive compensation disclosures in
its proxy statement on Schedule&nbsp;14A.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Corporation&#146;s responses to the Division&#146;s comment letter are outlined below in the
sequential order in which the comments appear in the comment letter immediately following the
restated comment of the Division. A draft of the Corporation&#146;s proposed revised disclosure is
attached as Exhibit&nbsp;A.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 2

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><U><B>Schedule&nbsp;14A</B></U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><U><B>Base Salary, page 7</B></U>
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>In future filings please revise to disclose the methodology used by the
committee to determine the specific base salary, bonus amounts and compensation under
the Long Term Incentive Plan. We note that you reference a number of factors used.
Please explain in specific terms how these resulted in the disclosed compensation.
Please refer to Item&nbsp;</B><B>402(b)(1)(v)</B><B> of Regulation&nbsp;S-K.</B></DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In future filings, the Corporation will disclose the methodology used by the Compensation
Committee to determine the specific base salary, bonus amounts and compensation under the Long Term
Incentive Plan. Further, the Corporation will also explain in specific terms how the factors used
resulted in the disclosed compensation. For bonus amounts and Long-Term Incentive Plan disclosure
set forth in Exhibit&nbsp;A, we have made the disclosures based upon assumptions of what factors the
Compensation Committee may utilize, which factors may change. The disclosure in Exhibit&nbsp;A has been
provided for purposes of example. Also, we have included in Exhibit&nbsp;A revised disclosures for 2008
regarding the Long-Term Incentive Plan, which will be updated for 2009 factors.
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>It appears that you may be using targets to award compensation. In future
filings please provide the actual targets, even where no compensation was awarded. If
you determine that a performance target is confidential due to the potential for
competitive harm to your company, as contemplated by Instruction 4 to </B><B>Item 402(b)</B><B> of
regulation S-K, provide us with your confidentiality analysis supplementally and
include in your filings disclosure analyzing the level of difficulty necessary to reach
the targets contemplated by the Instruction. For more information on the
confidentiality of targets,
please look to the report of the Commission Staff regarding executive compensation
disclosure, released October&nbsp;9, 2007.</B></DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In future filings the Corporation will, unless it determines that a performance target is
confidential due to the potential for competitive harm to the Corporation, provide the actual
targets, even where no compensation was awarded. In the event that the Corporation determines that
a performance target is confidential, it will provide disclosure analyzing the level of difficulty
necessary to reach the targets.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 3

</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>You reference a number of peer group information sources used by the committee.
In future filings, please describe how the committee used comparative compensation
information in determining compensation or compensation ranges. To the extent that you
use these peer group information to benchmark compensation, please identify the
component companies that form part of the peer groups. Disclose whether the
compensation committee deviated from peer group benchmarks in setting compensation, and
if so, state the reasons for such deviation. Refer to Item&nbsp;</B><B>402(b)(2)(xiv)</B><B> of
Regulation&nbsp;S-K and Regulation&nbsp;S-K Compliance and Disclosure Interpretation 118.05.</B></DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In future filings the Corporation will describe how the Compensation Committee used
comparative compensation information in determining compensation or compensation ranges. Further,
in future filings, the Corporation will clarify that it does not use peer group information to
benchmark compensation.
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>In future filings, please reconcile the disclosure at this heading regarding
CEO compensation with that on page 10. You say on page 10 that the CEO&#146;s salary is
determined according to an employment agreement.</B></DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In future filings the Corporation will reconcile the disclosure at this heading regarding CEO
compensation with that on page 10.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><U><B>Annual Bonus Amounts, page 7</B></U>
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>5.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>In future filings, as you provide the information requested above, please
explain why all of the bonus amounts have remained the same for the past three years
and how this relates to other forms of compensation which have changed.</B></DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In future filings the Corporation will explain why all of the bonus amounts have remained the
same for the past three years and how this relates to other forms of compensation which have
changed.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><U><B>First Financial Corporation...Long Term Incentive Plans, page 7</B></U>
</DIV>


<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>We note the information on page 12. In future filings, please ensure that you
include quantification of the target amounts at each payout level and the actual
performance results. See our related prior comment.</B></DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In future filings, the Corporation will include quantification of the target amounts at each
payout level and the actual performance results.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 4

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">In connection with its responses to the comments of the Division, the Corporation hereby
acknowledges through counsel that:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">it is responsible for the adequacy and accuracy of the disclosure in the filing;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">the Corporation may not assert staff comments as a defense in proceedings initiated
by the Commission or any person under the federal securities laws of the United States.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">If you or any member of the Staff has any questions concerning the responses provided herein
on the document discussed herein, please do not hesitate to contact me.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 50%">Sincerely,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 50%">(s)&nbsp;Michael A. Carty

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 50%">Michael A. Carty, Chief Financial Officer

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Enclosures
</DIV>





<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">



<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 5

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 10pt"><U><B>Exhibit&nbsp;A</B></U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Elements of Executive Compensation</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The compensation programs of the Corporation for its named executive officers are administered
by or under the direction of the Compensation Committee of the Board of Directors and are reviewed
on an annual basis to ensure that remuneration levels and benefits are comparable to other
similarly sized corporations within our industry and reasonable using the guidelines described
above. With respect to the named executive officers other than the Chairman of the Board and Chief
Executive Officer, the Compensation Committee reviews and compares individual performance with
respect to individual goals, area goals and Corporation goals. Because the Chairman of the Board
and Chief Executive Officer have greater responsibility for the overall operations of the
Corporation, the Compensation Committee reviews and compares the following with respect to their
compensation:
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">the performance of the Corporation and the Bank compared to previous years and to the
budget;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">past compensation levels for these officers;</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">the compensation levels at comparable financial institutions, as discussed below; and</DIV></TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">total shareholder return.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The elements of the compensation programs for the named executive officers are described in
more detail below.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Base Salary. </I>Base salary is a fixed component of total cash compensation and is intended to
reward the named executive officers for their past performance and to facilitate the attraction and
retention of a skilled and experienced management team. The Board of Directors establishes a total
&#147;pool&#148; for salaries for each fiscal year, typically expressed as a percentage increase over the
prior year&#146;s total aggregate base salaries. Individual base salary increases for all employees,
including the named executive officers, are awarded as allocations from the salary pool. In
establishing the amount of the pool, the Board of Directors considers general economic conditions
(such as inflation and recessionary factors), the performance of the Company and the Bank and other
sources of information such as third-party compensation surveys, including WorldatWork&#151;Financial
Institutions, Watson Wyatt, The Conference Board, Mercer, Hewitt and Culpepper Pay Trends. For
2009, the Compensation Committee established a pool of 3.75% over the prior year&#146;s total aggregate
base salaries.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Compensation Committee does not use the third-party data sources for benchmarking the size
of the pool, the base salaries, or any other element of compensation for the named executive
officers. Rather, such sources are reviewed and considered by the Compensation Committee in order
to stay abreast of current compensation practices, levels and structures and thereby better inform
its compensation decisions. The Compensation Committee considers all sources of information
together and utilizes its members&#146; experience and judgment in determining the amount of the pool
for base salary increases.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 6

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">With respect to individual named executive officers, annual increases to base salaries are
awarded based on the idea that an increase should reward performance and not longevity. Executive
officers who have performed well during the prior year receive a greater allocation from the pool
as a base salary increase than do executive officers who have not performed as well during the
prior year. Executive officers who have exceeded job expectations may, in the discretion of the
Compensation Committee, be awarded a base salary increase which is greater than the amount which
would be otherwise dictated by the size of the pool. Conversely, executive officers who did not
meet job expectations may, in the discretion of the Compensation Committee, receive little or no
percentage increase in base salary. For 2009, the Compensation Committee did not exercise its
discretion to award a named executive officer either a base salary increase of greater than the
pool for exceeding performance expectations, or no salary increase for failing to meet minimum
performance expectations.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">More specifically, base salary for a named executive officer is determined after the officer&#146;s
performance is reviewed by the Compensation Committee. This review includes an analysis of the
performance of the Corporation and the Bank and an analysis of the individual&#146;s performance during
the past fiscal year, with a focus on the officer&#146;s quality and quantity of work; supervisory
skills; dependability; initiative; attendance; overall skill level; and overall value to the
Corporation. In addition, when setting base salaries, the Compensation Committee also reviews
certain third-party surveys such as Crowe Midwest Financial Institutions Compensation Survey and
the Indiana Banker&#146;s Association Financial Institutions Compensation Survey. The Compensation
Committee has not attempted to rank or otherwise assign relative weights to the factors that it
considers. The Compensation Committee considers all of the factors as a whole and collectively
makes its decision with respect to base salaries in light of the factors that each of the members
consider important.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">With respect to the determination of the base salary increase for the Chairman of the Board
and Chief Executive Officer, the Compensation Committee additionally reviews and considers the
factors described on the preceding page as well as the compensation levels of comparable peers in
the same geographical area (generally, this consists of financial institutions in Midwestern
markets with comparable demographics as the Corporation with assets between $2&nbsp;billion and $5
billion). With respect to the Chief Executive Officer, the Compensation Committee also considers
the terms of Mr.&nbsp;Lowery&#146;s employment agreement. Specifically, prior to a Change in Control (as
discussed in &#147;Potential Payment Upon Termination or Change in Control of the Corporation&#148; on page
13), the Compensation Committee may only declare decreases in the base salary awarded to Mr.&nbsp;Lowery
if the operating results of the Bank are significantly less favorable than those for the fiscal
year ending December&nbsp;31, 2001 and the Bank makes similar decreases in the base salary it pays to
other executive officers of the Bank. Additional information concerning Mr.&nbsp;Lowery&#146;s employment
agreement is provided below in the narrative under &#147;Employment Agreements&#148;. As of this time, the
Compensation Committee has never decreased Mr.&nbsp;Lowery&#146;s salary.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Similar to the manner in which the Compensation Committee uses third-party survey data in a
general manner to inform its decision with respect to the amount of the base salary pool, the
Compensation Committee uses the Crowe Midwest Financial Institutions Compensation Survey, the
Indiana Banker&#146;s Association Financial Institutions Compensation Survey and other data in a
general manner to inform its decisions with respect to setting the base salary of the individual
named executive officers. The Compensation Committee does not benchmark the base salaries or any
other element of compensation for the named executive officers against these data sources.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 7

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Compensation Committee has not established a policy or a specific formula for determining
the amount or relative percentage of total compensation which should be derived by the named
executive officers from their base salary. Rather, the Compensation Committee considers all of the
information available to it and utilizes its members&#146; experience and judgment in determining the
amount of the base salaries of the named executive officers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Annual Bonus Amounts. </I>The Compensation Committee is responsible for the determination of
whether an annual bonus should be paid to the named executive officers. It has not established a
policy or a specific formula for determining the amount or relative percentage of total
compensation which should be derived by the named executive officers from annual bonus payments and
has discretion to consider such factors as it determines appropriate. Historically, the
determination has been based upon the overall performance of the Corporation and the Bank relative
to the established budget. In the event that the Compensation Committee determines that a bonus
payment is appropriate in light of the performance of the Company and the Bank, the specific
amounts are determined subjectively by the Compensation Committee based upon its evaluation of the
Corporation&#146;s and the Bank&#146;s performance to the respective budgets and prior year performance as
well as the Compensation Committee&#146;s evaluation of the future prospects of the Corporation and the
Bank.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">For 2009, the Compensation Committee determined, in light of the Corporation&#146;s and the Bank&#146;s
performance relative to budget for <B>&#091;list criteria, such as net income&#093;</B>, a bonus payment to each of
the named executive officers, in the amounts set forth in the Summary Compensation table was
appropriate. Because we endeavor to establish and pay remuneration levels and benefits which are
comparable to other similarly sized corporations within our industry, as discussed above, and do
not have a &#147;formula&#148; driven bonus plan the Compensation Committee has determined to pay the amount
of bonus for 2009 as set forth in the Summary Compensation Table. The Compensation Committee has
determined that such amount and the aggregate amount of salary and bonus is reasonable, given the
performance of the Corporation for 2009 as compared to budgeted <B>&#091;list criteria, such as net income&#093;</B>
and has not varied the amount of the bonus payments from the prior year&#146;s level.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>First Financial Corporation 2001 and 2005 Long-Term Incentive Plans. </I>Beginning in 1999, the
Board began discussions with several consultants regarding compensation programs. These discussions
focused on an analysis of compensation programs of other financial institutions and what actions
were needed to provide comparable compensation packages to directors, officers and key employees of
the Corporation and its subsidiaries. These discussions and the analysis of the information
received culminated with the adoption by the Board in November&nbsp;2000 of the First Financial
Corporation 2001 Long-Term Incentive Plan (the &#147;2001 Plan&#148;), effective January&nbsp;1, 2001.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The 2001 Plan was designed to enhance the Corporation&#146;s value to stockholders by attracting
and retaining qualified directors, officers and other key employees and by providing further
incentive for directors, officers and other key employees to give their maximum effort to the
continued growth and success of the Corporation. The 2001 Plan is an unfunded, nonqualified plan of
deferred
compensation which is administered by the Compensation Committee. The 2001 Plan was frozen
effective December&nbsp;31, 2004 to exempt all amounts under the 2001 Plan from the application of
Section&nbsp;409A of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;). The Board adopted the
First Financial Corporation 2005 Long-Term Incentive Plan (the &#147;2005 Plan&#148;) as a replacement plan,
effective January&nbsp;1, 2005. The terms of the 2005 Plan comply with the requirements of Code Section
409A and related guidance. Collectively the 2001 Plan and 2005 Plan are referred to as the &#147;Plans.&#148;
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 8

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Directors and executive officers who are considered highly compensated employees and who are
age 65 or under are eligible to participate in the 2005 Plan; however, the Compensation Committee
exempted Mr.&nbsp;Smith from the age limitations at each Plan&#146;s inception and exempted Mr.&nbsp;Rich, who did
not become a director until 2005, from the age limitation of the 2005 Plan. The Compensation
Committee has designated as participants in the 2005 Plan all directors of the Corporation, the
executive officers listed in the summary compensation table on the following page and certain other
officers. Individuals are not eligible to receive awards under the Plans after age 65, except for
Messrs.&nbsp;Smith and Rich. Furthermore, because Mr.&nbsp;Brighton had not been an employee or director for
five years when he entered into the 2005 Plan, he will vest in 20% of the Plan awards in his first
year of participation, 40% in the second year, 60% in the third year, 80% in the fourth year, until
he becomes 100% vested in the total awards after five years. Mr.&nbsp;Rich, having joined the
Corporation when their were four years remaining in the 2005 Plan, was approved by the Compensation
Committee to vest in the 2005 Plan in the amounts of 25% in his first year of participation, 50% in
his second year of participation, 75% in his third year of participation, until he becomes 100%
vested in the total awards after four years.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Awards under the 2005 Plan are based upon the specific &#147;award amount&#148; for each individual
specified. There are four tiers of participants, with a different award amount specified for each
tier. The first tier consists of Mr.&nbsp;Smith and Mr.&nbsp;Lowery; the second tier consists of Messrs.
Carty, White and Clary; the third tier consists of other senior officers; and the fourth tier
consists of the directors. The award amounts were established after discussions with, and receipt
of, advice from the Corporation&#146;s consultant (the predecessor to Clark Consulting) when the 2001
Plan was established, who had performed an analysis of a peer group of companies for the
Corporation and the financial institutions industry generally.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Under the incentive plan, threshold performance objectives must be met in order for any payout
to occur. Payouts for each of the named executive officers equal 90% of the respective target award
for performance at threshold, 100% of the respective target award for performance at target, and
110% of the respective target award for superior performance. The Compensation Committee spends a
significant amount of time analyzing financial measures and determining the level of performance
required to receive threshold, target and superior annual incentive payouts. The Compensation
Committee established the performance objectives in amounts which it believes to be achievable
given a sustained effort on the part of the named executive officers and which require increasingly
greater effort to achieve the target and superior objectives. The Compensation Committee may
increase or decrease the performance targets and the potential payouts at each performance target,
if, in the discretion of the
Compensation Committee, the circumstances warrant such an adjustment. The Compensation Committee
did not exercise its discretion in this regard in 2008<B>.</B>
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 9

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The annual incentive opportunities for each of the named executive officers are based upon
weighted factors which are determined by the Compensation Committee based upon its assessment of
what is important to the Corporation&#146;s and the Bank&#146;s overall performance and within the scope of
control of the respective named executive officers. For 2008, the factors are weighted as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Bank Net</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Contribution</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Branch</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Average</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Income</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>to Income</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Average Loans</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Deposits</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Discretionary</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Donald E. Smith</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Norman L. Lowery</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michael A. Carty</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Richard O. White</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">20</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas Clary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">25</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Points are awarded to each of the named executive officers based upon their achievement of
certain predefined target levels of performance with respect to each of the factors. The point
opportunities for Donald E. Smith, Norman L. Lowery, and Michael A. Carty for 2008 were as follows
($ amounts in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22" style="border-bottom: 1px solid #000000"><B>Points Awarded for Achievement</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>O Points</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>1 Point</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>2 Points</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>3 Points</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Factors</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008 Target</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(If Less Than)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(If Between)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(If Between)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(If Greater Than)</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bank Net Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32,576</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 10

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The point opportunities for Richard White for 2008 are as follows ($ amounts in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22" style="border-bottom: 1px solid #000000"><B>Points Awarded for Achievement</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>O Points</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>1 Point</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>2 Points</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>3 Points</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Factors</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008 Target</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(If Less Than)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(If Between)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(If Between)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(If Greater Than)</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bank Net Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32,576</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contribution to
Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">33,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">26,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">33,480</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40,176</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Branch Average Loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">62,059</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">49,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">49,647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">62,058</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">62,058</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">74,471</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">74,471</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Average Deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,510,956</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,208,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,208,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,510,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,510,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,813,146</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,813,146</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The point opportunities for Thomas Clary for 2008 are as follows ($ amounts in thousands):
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head --><TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="22" style="border-bottom: 1px solid #000000"><B>Points Awarded for Achievement</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>O Points</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>1 Point</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>2 Points</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>3 Points</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Factors</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2008 Target</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(If Less Than)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(If Between)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(If Between)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>(If Greater Than)</B></TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bank Net Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,718</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32,576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32,576</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contribution to
Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">14,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,410</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; padding-top: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Branch Average Loans</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">789,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">631,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">631,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">789,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">789,062</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">946,883</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">946,883</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Actual award amounts are based upon weighted point totals. Any named executive officer that
earns between one point and two points will be deemed to have achieved the threshold level of
performance and will receive an award at the 90% level. Named executive officers who earn between
two points and three points will be deemed to have achieved the target level of performance and
will receive an award at the 100% level. Officers who earn three points or more will be deemed to
have achieved the superior level of performance and will receive an award at the 110% level. Any
named executive officer who fails to earn at least one point will be deemed to have not achieved
the threshold level of performance and will not be entitle to receive an award unless, the
Compensation Committee determines, in its discretion that the circumstances warrant. The Committee
did not exercise its discretion in this regard in 2008<B>.</B>
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 11

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Payments under the 2001 and 2005 Plans generally do not begin until the earlier of January&nbsp;1,
2015, or the January 1 immediately following the year in which the participant reaches age 65.
Payment may also be made upon death, disability, change in control or termination for other than
cause. Mr.&nbsp;Smith&#146;s payout will not begin until the earlier of January&nbsp;1, 2010 or death, disability,
change in control or termination for other than cause. If a participant is a &#147;key employee&#148; as
defined by Code Section&nbsp;409A, then payments will be suspended for the six-month period following
the participant&#146;s separation from service. Payments are in cash only and are generally made in 180
equal consecutive monthly installments.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Life Insurance. </I>As an incentive for executive officers to remain with the Corporation and the
Bank, the Corporation also provides a life insurance program (the &#147;Life Insurance Program&#148;) for the
named executive officers of the Bank other than Mr.&nbsp;Smith. Under the Life Insurance Program,
the Bank purchased a life insurance policy on behalf of and pays the premiums on behalf of each
executive officer of the Bank. The policy is owned by the individual and is intended to be fully
paid at age 65 for those who were 55 or older, and at age 60 for those who were less than 55&nbsp;years
of age at the time the program was started.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>Employee Benefit Plans</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>4</I><I>01(k)</I><I> Savings Plan. </I>The First Financial Corporation Employees&#146; 401(k) Savings Plan (the
&#147;Savings Plan&#148;) is a qualified salary reduction plan within the meaning of Code Section 401(k)
available to substantially all of the employees of the Corporation and its subsidiaries. Under the
Savings Plan all eligible employees may elect to have a portion of their compensation deferred and
contributed to their individual accounts within the Savings Plan Trust. Subject to limits
established under the Internal Revenue Code, contributions may be directed in any whole percentage
between 1% and 50% of the employee&#146;s base compensation and certain variable pay including overtime
pay, bonuses, commissions, but excluding welfare benefits, deferred compensation, reimbursements
and expense allowances. Amounts contributed to a participant&#146;s individual account in the Savings
Plan may be invested, at the direction of the Savings Plan participant, in certain investment fund
choices made available for that purpose.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Retirement Plans. </I>The Corporation sponsors the First Financial Corporation Employee Stock
Ownership Plan (the &#147;ESOP&#148;) and the First Financial Corporation Employees&#146; Pension Plan (the
&#147;Pension Plan&#148;) for the benefit of substantially all of the employees of the Corporation and its
subsidiaries. These plans together constitute a &#147;floor offset&#148; retirement program, so that the
Pension Plan provides each participant with a minimum benefit which is offset by the benefit
provided by the ESOP.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 12

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Under the terms of the ESOP, the Corporation or its subsidiaries, as participating employers,
may contribute Corporation common stock to the ESOP or contribute cash to the ESOP, which will be
primarily invested by the Bank, as the ESOP trustee, in the Corporation&#146;s common stock. The amount
of contributions, when they are made, is determined by the Board of Directors of the Corporation.
No participant contributions are required or allowed under the ESOP. Participants have the right to
direct the voting of the shares of the Corporation&#146;s stock allocated to their accounts under the
ESOP on all corporate matters. Participants may elect to receive a direct payment of dividends paid
on shares of the Corporation&#146;s common stock allocated to their accounts or to have the dividends
reinvested in Corporation common stock within the ESOP. Upon completing ten years of participation
in the ESOP and attaining age 55 1/2, an ESOP participant may elect to diversify over a six-year
period up to 50% of the Corporation&#146;s common stock allocated to the participant&#146;s ESOP account.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">For the year ended December&nbsp;31, 2008, the Corporation contributed 33,015 shares of the
Corporation&#146;s stock valued at $1,276,360 to the ESOP. The stock will be allocated to the individual
ESOP accounts of the participants who are eligible to receive allocations of those contributions,
effective as of December&nbsp;31, 2008, although the allocation to the individual accounts had not been
made or calculated as of the date of mailing of this Proxy Statement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Defined Benefit Plan. </I>The Pension Plan is a defined benefit pension plan sponsored by the
Corporation for the benefit of substantially all of the employees of the Corporation and its
subsidiaries. The monthly guaranteed minimum benefit under the Pension Plan is reduced by the
monthly benefit derived from the vested portion of the participant&#146;s ESOP account balance,
calculated by the actuary for the Pension Plan as a single life annuity. Unless the participant
elects an alternate form of benefit under the Pension Plan, the normal retirement benefit, if any,
payable under the Pension Plan, will begin at the later of the participant&#146;s retirement or age 65
and be paid monthly for as long as the participant lives. Messrs.&nbsp;Lowery, Carty, Clary and White,
having surpassed their 55th birthday and served the Corporation for more than 5&nbsp;years, are eligible
for early retirement under the Pension Plan. The Pension Plan allows for an early retirement
benefit equal to a participant&#146;s accrued benefit, determined before the reduction for the monthly
ESOP benefit, reduced by 1/180 for each full month for the first five years and 1/360 for each full
month for the next five years that the commencement of benefit payments precedes the participant&#146;s
normal retirement date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The following table shows the estimated annual benefits payable under the Pension Plan upon
retirement at age 65 in 2008 for various periods of Benefit Service at specified levels of
remuneration. A participant&#146;s Final Average Annual Compensation shown under the Pension Plan is
generally based on the salary and bonus set forth in the Summary Compensation Table.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B><I>&#091;Table Omitted For Purposes Of This Response To The Division&#093;</I></B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Explanation of ESOP/Pension Plan Offset Arrangement. </I>The offset between the ESOP and the
Pension Plan works in the following manner. If a participant&#146;s ESOP benefit exceeds the benefit he
has accrued under the Pension Plan, the participant will receive his ESOP benefit in lieu of the
Pension Plan benefit. For example, a participant&#146;s ESOP benefit is $120,000 and his Pension Plan
benefit is $100,000. The $120,000 benefit will be paid from the ESOP and $0 will be paid from the
Pension Plan. However, if a participant&#146;s Pension Plan benefit exceeds his ESOP benefit, then the
participant will receive his ESOP benefit along with the amount the Pension Plan benefit exceeded
the ESOP benefit paid from the Pension Plan. For example, a participant&#146;s ESOP benefit is $100,000
and his Pension benefit is $120,000. The $100,000 benefit will be paid from the ESOP and $20,000
will be paid from the Pension Plan.
</DIV>
<P align="center" style="font-size: 10pt; text-indent: 8%">&nbsp;

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 13

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Executive Supplemental Retirement Plan. </I>The First Financial Corporation Executive Supplemental
Retirement Plan (the &#147;ESRP&#148;) provides supplemental retirement benefits for a select group of
management or highly compensated employees to help recompense the employees for benefits reduced
due to the imposition of Code limitations on benefits under the Pension Plan. Amounts payable under
the ESRP are offset by amounts payable under the First Financial Executives&#146; Deferred Compensation
Plan. The ESRP was frozen effective December&nbsp;31, 2004 to exempt all amounts under the ESRP from
Code Section&nbsp;409A. The Board adopted The First Financial Corporation 2005 Executive Supplemental
Retirement Plan (the &#147;2005 ESRP&#148;) as a replacement plan, effective January&nbsp;1, 2005. The 2005 ESRP
is designed to comply with Code Section&nbsp;409A. Amounts payable under the ESRP will be offset by
amounts payable under the First Financial Corporation Executives&#146; Deferred Compensation Plan and
amounts payable under the 2005 ESRP will be offset by amounts payable under the First Financial
Corporation 2005 Executives&#146; Deferred Compensation Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Executives&#146; Deferred Compensation Plan. </I>The First Financial Executives&#146; Deferred Compensation
Plan (the &#147;EDC Plan&#148;) permits a select group of management or highly compensated employees to elect
to defer compensation from the employers, in addition to that which can be deferred under the
Savings Plan, without regard to the limitations imposed by the Internal Revenue Code on the amount
of compensation which may be deferred. The EDC Plan also provides for a supplemental ESOP benefit
which is equal to the amount of the benefit a participant would have been allocated under the ESOP
if not for the limitations imposed by the Internal Revenue Code on the ESOP. Amounts payable under
the supplemental ESOP portion of the EDC Plan will offset amounts payable under the ESRP. The EDC
Plan was frozen effective December&nbsp;31, 2004 to exempt all amounts accrued under the EDC from Code
Section&nbsp;409A. The Board adopted the First Financial Corporation 2005 Executives&#146; Deferred
Compensation Plan (the &#147;2005 EDC Plan&#148;) as a replacement plan, effective January&nbsp;1, 2005. The 2005
EDC Plan is designed to comply with Code Section&nbsp;409A. Amounts payable under the 2005 EDC Plan will
offset amounts payable under the 2005 ESRP.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Explanation of ESRP/EDC Arrangement. </I>The offset between the ESRP and the EDC works just like
the ESOP/Pension Plan offset. If a participant&#146;s EDC benefit exceeds the benefit he has accrued
under the ESRP, the participant will receive his EDC benefit in lieu of the ESRP benefit. For
example, a participant&#146;s EDC benefit is $120,000 and his ESRP benefit is $100,000. The $120,000
benefit will be paid from the EDC and $0 will be paid from the ESRP. However, if a participant&#146;s
ESRP benefit exceeds his EDC benefit, then the participant will receive his EDC benefit along with
the amount the ESRP benefit exceeded the EDC benefit paid from the ESRP. For example, a
participant&#146;s EDC benefit is $100,000 and his ESRP is $120,000. The $100,000 benefit will be paid
from the EDC and $20,000 will be paid from the ESRP.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.20in">


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Christian Windsor<BR>
August&nbsp;24, 2009<BR>
Page 14

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Employment Agreement</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">The Bank agreed to enter into an Employment Agreement with Norman L. Lowery, its President and
Chief Executive Officer, upon the beginning of Mr.&nbsp;Lowery&#146;s employment in January&nbsp;1996. The
Employment Agreement was finalized and became effective in 1997. It has been extended each year
since that time, and was last extended effective January&nbsp;1, 2009. The Employment Agreement is a
five-year agreement which may be extended on each anniversary by the Board of Directors of the Bank
for an additional one-year term. During the period of his employment, the Employment Agreement
requires that Mr.&nbsp;Lowery devote all of his full business time, attention, skill and efforts to the
faithful performance of his duties. He has also agreed to the following nonsolicitation,
noncompetition and nondisclosure provisions:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Nonsolicitation. </I>For a one year period after termination for any reason or the expiration of
the term, Mr.&nbsp;Lowery will not: (i)&nbsp;solicit any non-legal business of any party which is a customer
of the Bank at the time of such termination or during the one-year period immediately preceding
such termination, (ii)&nbsp;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)&nbsp;induce, request or
attempt to influence any employee of the Bank to terminate his employment with the Bank.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Noncompetition. </I>In the event Mr.&nbsp;Lowery voluntarily terminates his employment with the Bank,
he will not during the period of his employment, and for a period of two years following
termination: (i)&nbsp;engage in the same trade or business as the Bank which would conflict with the
interests of the Bank or in a trade or business competitive with that of the Bank; or (ii)
offer or provide employment to any person who then currently is, or who within one year prior to
such offer has been, a management-level employee of the Bank.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"><I>Nondisclosure. </I>Mr.&nbsp;Lowery will not, directly or indirectly, use any &#147;confidential information&#148;
(as defined in the agreement) for any purpose other than for the benefit of the Bank provide any
confidential information except as required in the normal course of his service as a consultant or
employee of the Bank during the term of the agreement and following termination of the agreement
until either (i)&nbsp;such confidential information becomes obsolete; or (ii)&nbsp;such confidential
information becomes generally known in the Bank&#146;s trade or industry by means other than a breach of
this covenant.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">Under the Employment Agreement, Mr.&nbsp;Lowery receives an annual salary equal to his current
salary, which is $485,509 for 2009, subject to increases or decreases approved by the Board of
Directors, and is entitled to participate in other bonus and fringe benefit plans available to the
Corporation&#146;s and the Bank&#146;s employees. Additional information regarding the terms of the
Employment Agreement is included in the narrative discussion under &#147;Potential Payment Upon
Termination or Change in Control of the Corporation&#148; on page 13.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt"><B>Accounting and Tax Considerations</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%">We have structured our compensation program to comply with Internal Revenue Code Sections
162(m) and 409A. Under Code Section&nbsp;162(m), a limitation was placed on tax deductions of any
publicly-held corporation for individual compensation to certain executives of such corporation
exceeding $1,000,000 in any taxable year, unless the compensation is performance-based. The Company
has no individuals with non-performance based compensation paid in excess of the Internal Revenue
Code Section 162(m) tax deduction limit. If an executive is entitled to nonqualified deferred
compensation benefits that are subject to Section&nbsp;409A, and such benefits do not comply with
Section&nbsp;409A, then the benefits are taxable in the first year they are not subject to a substantial
risk of forfeiture. In such case, the executive is subject to payment of regular federal income
tax, interest and an additional federal income tax of 20% of the benefit includible in income.
</DIV>


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