Common use of Section 162(m) of the Code Clause in Contracts

Section 162(m) of the Code. As previously discussed, Section 162(m) generally provides that publicly held companies may not deduct compensation paid to certain of their top executive officers to the extent such compensation exceeds $1 million per officer in any year. Certain limited exceptions to Section 162(m) apply with respect to “performance-based compensation” that complies with conditions imposed by Section 162(m) rules, provided the material terms of such performance goals are disclosed to and approved by shareholders, as the First Financial shareholders have done at the 2017 Annual Meeting on May 23, 2017. Options, SARs and Performance Awards granted under the Plan and described above are intended to constitute qualified performance-based compensation eligible for such exceptions.