EXHIBIT 10.3
 
RIVER VALLEY FINANCIAL BANK
SALARY CONTINUATION AGREEMENT

THIS SALARY CONTINUATION AGREEMENT (this “Agreement”) is adopted this 25th day
of January, 2007, by and between RIVER VALLEY FINANCIAL BANK, a savings
association located in Madison, Indiana (the “Bank”), and MATTHEW FORRESTER (the
“Executive”).

The purpose of this Agreement is to provide specified benefits to the Executive,
a member of a select group of management or highly compensated employees who
contribute materially to the continued growth, development and future business
success of the Bank. This Agreement shall be unfunded for tax purposes and for
purposes of Title I of the Employee Retirement Income Security Act of 1974
(“ERISA”), as amended from time to time.
 
Article 1
Definitions

Whenever used in this Agreement, the following words and phrases shall have the
meanings specified:

 
1.1
“Accrual Balance” means the liability that should be accrued by the Bank, under
Generally Accepted Accounting Principles (“GAAP”), for the Bank’s obligation to
the Executive under this Agreement, by applying Accounting Principles Board
Opinion Number 12 (“APB 12”) as amended by Statement of Financial Accounting
Standards Number 106 (“FAS 106”) and the Discount Rate. Any one of a variety of
amortization methods may be used to determine the Accrual Balance. However, once
chosen, the method must be consistently applied.

1.2
“Beneficiary” means each designated person or entity, or the estate of the
deceased Executive, entitled to any benefits upon the death of the Executive
pursuant to Article 4.

1.3
“Beneficiary Designation Form” means the form established from time to time by
the Plan Administrator that the Executive completes, signs and returns to the
Plan Administrator to designate one or more Beneficiaries.

1.4
“Board” means the Board of Directors of the Bank as from time to time
constituted.

1.5
“Change in Control” means a change in the ownership or effective control of the
Bank, or in the ownership of a substantial portion of the assets of the Bank, as
such change is defined in Code Section 409A.

1.6
“Code” means the Internal Revenue Code of 1986, as amended, and all regulations
and

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guidance thereunder, including such regulations and guidance as may be
promulgated after the Effective Date of this Agreement.

1.7
“Disability” means the Executive: (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months; or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees or directors of the Bank. Medical determination of Disability
may be made by either the Social Security Administration or by the provider of
an accident or health plan covering employees or directors of the Bank, provided
that the definition of “disability” applied under such insurance program
complies with the requirements of the preceding sentence. Upon the request of
the Plan Administrator, the Executive must submit proof to the Plan
Administrator of the Social Security Administration’s or the provider’s
determination.

1.8
“Discount Rate” means the rate used by the Plan Administrator for determining
the Accrual Balance. The initial Discount Rate is six percent (6%). However, the
Plan Administrator, in its discretion, may adjust the Discount Rate to maintain
the rate within reasonable standards according to GAAP and/or applicable bank
regulatory guidance.

1.9
“Early Retirement” means Separation from Service after Early Retirement Age and
before Normal Retirement Age.

 
1.10
“Early Retirement Age” means the Executive attaining age sixty two (62).

 
1.11
“Early Termination” means Separation from Service before Early Retirement Age
except when such Separation from Service occurs (i) following a Change in
Control; or (ii) due to death, Termination for Cause or Disability.

1.12
“Effective Date” means January 1, 2007.

1.13
“Employment Agreement” means the Employment Agreement between the Bank and the
Executive effective October 12, 1999, as it may be amended from time to time.

1.14
“Normal Retirement Age” means the Executive attaining age sixty five (65).

1.15
“Normal Retirement Date” means the later of Normal Retirement Age or Separation
from Service.

 
1.16
“Plan Administrator” means the Board or such committee or person as the Board
shall appoint.

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1.17
“Plan Year” means each twelve (12) month period commencing on January 1 and
ending on December 31 of each year. The initial Plan Year shall commence on the
Effective Date of this Agreement and end on the following December 31.

1.18
“Separation from Service” means the termination of the Executive’s employment
with the Bank for reasons other than death. Whether a Separation from Service
takes place is determined in accordance with the requirements of Code Section
409A based on the facts and circumstances surrounding the termination of the
Executive’s employment and whether the Bank and the Executive intended for the
Executive to provide significant services for the Bank following such
termination. A Separation from Service will not have occurred if:

 

 
(a)
the Executive continues to provide services as an employee of the Bank at an
annual rate that is twenty percent (20%) or more of the services rendered, on
average, during the immediately preceding three (3) full calendar years of
employment (or, if employed less than three (3) years, such lesser period) and
the annual remuneration for such services is twenty percent (20%) or more of the
average annual remuneration earned during the final three (3) full calendar
years of employment (or, if less, such lesser period), or

 
(b) the Executive continues to provide services to the Bank in a capacity other
than as an employee of the Bank at an annual rate that is fifty percent (50%) or
more of the services rendered, on average, during the immediately preceding
three (3) full calendar years of employment (or if employed less than three (3)
years, such lesser period) and the annual remuneration for such services is
fifty percent (50%) or more of the average annual remuneration earned during the
final three (3) full calendar years of employment (or if less, such lesser
period).
 
The Executive’s employment relationship will be treated as continuing intact
while the Executive is on military leave, sick leave or other bona fide leave of
absence if the period of such leave of absence does not exceed six (6) months,
or if longer, so long as the Executive’s right to reemployment with the Bank is
provided either by statute or by contract. If the period of leave exceeds six
(6) months and there is no right to reemployment, a Separation from Service will
be deemed to have occurred as of the first date immediately following such six
(6) month period.

 
1.19
“Specified Employee” means a key employee (as defined in Code Section 416(i)
without regard to paragraph 5 thereof) of the Bank if any stock of the Bank or
any entity required to be aggregated with the Bank under Section 414(b) or
Section 414(c) of the Code is publicly traded on an established securities
market or otherwise, as determined by the Plan Administrator based on the twelve
(12) month period ending each December 31 (the “identification period”). If the
Executive is determined to be a Specified Employee for an

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identification period, the Executive shall be treated as a Specified Employee
for purposes of this Agreement during the twelve (12) month period that begins
on the first day of the fourth month following the close of the identification
period.

1.20
“Termination for Cause” means Separation from Service for the Executive’s
personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease and desist order or material breach of any
provision of this Agreement:

Article 2
Distributions During Lifetime

2.1
Normal Retirement Benefit. Upon the Normal Retirement Date, the Bank shall
distribute to the Executive the benefit described in this Section 2.1 in lieu of
any other benefit under this Article.

 
2.1.1
Amount of Benefit. The annual benefit under this Section 2.1 is Fifty Thousand
Dollars ($50,000). 

 
2.1.2
Distribution of Benefit. The Bank shall distribute the annual benefit to the
Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Separation from Service. The annual benefit shall be
distributed to the Executive for fifteen (15) years.

2.2
Early Retirement Benefit. Upon Separation from Service after Early Retirement
Age and before Normal Retirement Age, the Bank shall distribute to the Executive
the benefit described in this Section 2.2 in lieu of any other benefit under
this Article.

 
2.2.1
Amount of Benefit. The benefit under this Section 2.2 is the Accrual Balance
determined as of the end of the month preceding Separation from Service. 

 
2.2.2
Distribution of Benefit. The Bank shall distribute the benefit to the Executive
in one hundred eighty (180) equal monthly installments commencing on the first
day of the month following Separation from Service.

2.3
Early Termination Benefit. If Early Termination occurs, the Bank shall
distribute to the Executive the benefit described in this Section 2.3 in lieu of
any other benefit under this Article.

 
2.3.1
Amount of Benefit. The benefit under this Section 2.3 is the Accrual Balance
determined as of the end of the month preceding Separation from Service. 

 
2.3.2
Distribution of Benefit. The Bank shall distribute the benefit to the Executive
in a lump sum within thirty (30) days following Separation from Service.

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2.4
Disability Benefit. If the Executive experiences a Disability which results in a
Separation from Service prior to Early Retirement Age, the Bank shall distribute
to the Executive the benefit described in this Section 2.4 in lieu of any other
benefit under this Article.

 
2.4.1
Amount of Benefit. The benefit under this Section 2.4 is the Accrual Balance
determined as of the end of the month preceding Separation from Service.

 
2.4.2
Distribution of Benefit. The Bank shall distribute the benefit to the Executive
in a lump sum within thirty (30) days following Separation from Service.

2.5
Change in Control Benefit. If a Change in Control occurs followed by a
Separation from Service, the Bank shall distribute to the Executive the benefit
described in this Section 2.5 in lieu of any other benefit under this Article.

 

 
2.5.1
Amount of Benefit. The benefit under this Section 2.5 is the Normal Retirement
Benefit set forth at Section 2.1.1.

 
2.5.2
Distribution of Benefit. The Bank shall distribute the benefit to the Executive
in a lump sum within thirty (30) days following Separation from Service.

 
2.5.3
280G Limits. Anything in this Agreement to the contrary notwithstanding, in the
event that the Bank’s independent public accountants determine that any payment
by the Bank to or for the benefit of the Executive, whether paid or payable
pursuant to the terms of this Agreement or pursuant to any other agreement,
would be non-deductible by the Bank for federal income tax purposes because of
Section 280G of the Code, then the amount payable to or for the benefit of the
Executive pursuant to this Agreement shall be reduced (but not below zero) to
the Reduced Amount. For purposes of this Section 2.5.3, the “Reduced Amount”
shall be the amount which maximizes the amount payable without causing the
payment to be non-deductible by the Bank because of Section 280G of the Code.

2.6
Restriction on Commencement of Distributions. Notwithstanding any provision of
this Agreement to the contrary, if the Executive is considered a Specified
Employee at Separation from Service, the provisions of this Section 2.6 shall
govern all distributions hereunder. Benefit distributions that are made due to a
Separation from Service occurring while the Executive is a Specified Employee
shall not be made during the first six (6) months following Separation from
Service. Rather, any distribution which would otherwise be paid to the Executive
during such period shall be accumulated and paid to the Executive in a lump sum
on the first day of the seventh month following the Separation from Service. All
subsequent distributions shall be paid in the manner specified.

2.7
Distributions Upon Income Inclusion Under Code Section 409A. If any amount is
required to be included in income by the Executive prior to receipt due to a
failure of this

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Agreement to meet the requirements of Code Section 409A, the Executive may
petition the Plan Administrator for a distribution of that portion of the amount
the Bank has accrued with respect to the Bank’s obligations hereunder that is
required to be included in the Executive’s income. Upon the grant of such a
petition, which grant shall not be unreasonably withheld, the Bank shall
distribute to the Executive immediately available funds in an amount equal to
the portion of the amount the Bank has accrued with respect to the Bank’s
obligations hereunder required to be included in income as a result of the
failure of this Agreement to meet the requirements of Code Section 409A, within
ninety (90) days. Such a distribution shall affect and reduce the Executive’s
benefits to be paid under this Agreement.

2.8
Change in Form or Timing of Distributions. For distribution of benefits under
this Article 2, the Executive and the Bank may, subject to the terms of Section
8.1, amend this Agreement to delay the timing or change the form of
distributions. Any such amendment:

 

 
(a)
may not accelerate the time or schedule of any distribution, except as provided
in Code Section 409A;

 
(b)
must, for benefits distributable under Sections 2.1, 2.2, 2.3 and 2.5, delay the
commencement of distributions for a minimum of five (5) years from the date the
first distribution was originally scheduled to be made; and

 
(c)
must take effect not less than twelve (12) months after the amendment is made.

Article 3
Distribution at Death

3.1
Death During Active Service. If the Executive dies prior to Separation from
Service, the Bank shall distribute to the Beneficiary the benefit described in
this Section 3.1. This benefit shall be distributed in lieu of any benefit under
Article 2.

 
3.1.1
Amount of Benefit. The benefit under this Section 3.1 is the Accrual Balance
determined as of the end of the month preceding the executive’s death.

 
3.1.2
Distribution of Benefit. The Bank shall distribute the benefit to the
Beneficiary in a lump sum within thirty (30) days following receipt by the Bank
of the Executive’s death certificate.

 
3.2
Death During Distribution of a Benefit. If the Executive dies after any benefit
distributions have commenced under this Agreement but before receiving all such
distributions, the Bank shall distribute to the Beneficiary the remaining
benefits at the same time and in the same amounts they would have been
distributed to the Executive had the Executive survived.

 
3.3
Death After Separation from Service But Before Benefit Distributions Commence.
If the Executive is entitled to benefit distributions under this Agreement but
dies prior to the commencement of said benefit distributions, the Bank shall
distribute to the Beneficiary

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the same benefits to which the Executive was entitled prior to death, except
that the benefit distributions shall commence within thirty (30) days following
receipt by the Bank of the Executive’s death certificate.

Article 4
Beneficiaries

4.1
In General. The Executive shall have the right, at any time, to designate a
Beneficiary to receive any benefit distributions under this Agreement upon the
death of the Executive. The Beneficiary designated under this Agreement may be
the same as or different from the beneficiary designation under any other plan
of the Bank in which the Executive participates.

4.2
Designation. The Executive shall designate a Beneficiary by completing and
signing the Beneficiary Designation Form and delivering it to the Plan
Administrator or its designated agent. If the Executive names someone other than
the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole
discretion, determine that spousal consent is required to be provided in a form
designated by the Plan Administrator, executed by the Executive’s spouse and
returned to the Plan Administrator. The Executive’s beneficiary designation
shall be deemed automatically revoked if the Beneficiary predeceases the
Executive or if the Executive names a spouse as Beneficiary and the marriage is
subsequently dissolved. The Executive shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Plan Administrator’s rules and procedures.
Upon the acceptance by the Plan Administrator of a new Beneficiary Designation
Form, all Beneficiary designations previously filed shall be cancelled. The Plan
Administrator shall be entitled to rely on the last Beneficiary Designation Form
filed by the Executive and accepted by the Plan Administrator prior to the
Executive’s death.

4.3
Acknowledgment. No designation or change in designation of a Beneficiary shall
be effective until received, accepted and acknowledged in writing by the Plan
Administrator or its designated agent.

4.4
No Beneficiary Designation. If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then
the Executive’s spouse shall be the designated Beneficiary. If the Executive has
no surviving spouse, any benefit shall be paid to the personal representative of
the Executive’s estate.

 
4.5
Facility of Distribution. If the Plan Administrator determines in its discretion
that a benefit is to be distributed to a minor, to a person declared incompetent
or to a person incapable of handling the disposition of that person’s property,
the Plan Administrator may direct distribution of such benefit to the guardian,
legal representative or person having the care or custody of such minor,
incompetent person or incapable person. The Plan Administrator may require proof
of incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Any distribution of a benefit

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shall be a distribution for the account of the Executive and the Beneficiary, as
the case may be, and shall completely discharge any liability under this
Agreement for such distribution amount.

Article 5
General Limitations

5.1
Termination for Cause. Notwithstanding any provision of this Agreement to the
contrary, the Bank shall not distribute any benefit under this Agreement if the
Executive’s employment with the Bank is terminated due to a Termination for
Cause.

 
5.2
Suicide or Misstatement. No benefit shall be distributed if the Executive
commits suicide within two years after the Effective Date of this Agreement, or
if an insurance company which issued a life insurance policy covering the
Executive and owned by the Bank denies coverage (i) for material misstatements
of fact made by the Executive on an application for such life insurance, or (ii)
for any other reason.

5.3
Removal. Notwithstanding any provision of this Agreement to the contrary, the
Bank shall not distribute any benefit under this Agreement if the Executive is
subject to a final removal or prohibition order issued by an appropriate federal
banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

5.4
Forfeiture Provision. The Executive shall forfeit any non-distributed benefits
under this Agreement if the Executive breaches Section 6 of the Employment
Agreement.

Article 6
Administration of Agreement

6.1
Plan Administrator Duties. The Plan Administrator shall administer this
Agreement according to its express terms and shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administra-tion of this Agreement and (ii) decide or resolve
any and all ques-tions, including interpretations of this Agreement, as may
arise in connection with this Agreement to the extent the exercise of such
discretion and authority does not conflict with Code Section 409A.

6.2
Agents. In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as the Plan
Administrator sees fit, including acting through a duly appointed
representative, and may from time to time consult with counsel who may be
counsel to the Bank.

6.3
Binding Effect of Decisions. Any decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation or application of this Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest

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in this Agreement.

6.4
Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the
Plan Administrator against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to this
Agreement, except in the case of willful misconduct by the Plan Administrator.

6.5
Bank Information. To enable the Plan Administrator to perform its functions, the
Bank shall supply full and timely information to the Plan Administrator on all
matters relating to the date and circum-stances of the death, Disability or
Separation from Service of the Executive, and such other pertinent information
as the Plan Administrator may reasonably require.

6.6
Annual Statement. The Plan Administrator shall provide to the Executive, within
one hundred twenty (120) days after the end of each Plan Year, a statement
setting forth the benefits to be distributed under this Agreement.

Article 7
Claims And Review Procedures

7.1
Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received
benefits under this Agreement that he or she believes should be distributed
shall make a claim for such benefits as follows:

 
7.1.1
Initiation - Written Claim. The claimant initiates a claim by submitting to the
Plan Administrator a written claim for the benefits. If such a claim relates to
the contents of a notice received by the claimant, the claim must be made within
sixty (60) days after such notice was received by the claimant. All other claims
must be made within one hundred eighty (180) days of the date on which the event
that caused the claim to arise occurred. The claim must state with particularity
the determination desired by the claimant.

 

 
7.1.2
Timing of Plan Administrator Response. The Plan Administrator shall respond to
such claimant within ninety (90) days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by
an additional ninety (90) days by notifying the claimant in writing, prior to
the end of the initial ninety (90) day period, that an additional period is
required. The notice of extension must set forth the special circumstances and
the date by which the Plan Administrator expects to render its decision.

 
7.1.3
Notice of Decision. If the Plan Administrator denies part or all of the claim,
the Plan Administrator shall notify the claimant in writing of such denial. The
Plan Administrator shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set forth:

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(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of this Agreement on which the denial is
based;

 
(c)
A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed;

 
(d)
An explanation of this Agreement’s review procedures and the time limits
applicable to such procedures; and

 
(e)
A statement of the claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

7.2
Review Procedure. If the Plan Administrator denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial as follows:

 
7.2.1
Initiation - Written Request. To initiate the review, the claimant, within sixty
(60) days after receiving the Plan Administrator’s notice of denial, must file
with the Plan Administrator a written request for review.

 
7.2.2
Additional Submissions - Information Access. The claimant shall then have the
opportunity to submit written comments, documents, records and other information
relating to the claim. The Plan Administrator shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

 
7.2.3
Considerations on Review. In considering the review, the Plan Administrator
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

 
7.2.4
Timing of Plan Administrator Response. The Plan Administrator shall respond in
writing to such claimant within sixty (60) days after receiving the request for
review. If the Plan Administrator determines that special circumstances require
additional time for processing the claim, the Plan Administrator can extend the
response period by an additional sixty (60) days by notifying the claimant in
writing, prior to the end of the initial sixty (60) day period, that an
additional period is required. The notice of extension must set forth the
special circumstances and the date by which the Plan Administrator expects to
render its decision.

 
7.2.5
Notice of Decision. The Plan Administrator shall notify the claimant in writing
of its decision on review. The Plan Administrator shall write the notification
in a manner calculated to be understood by the claimant. The notification shall
set forth:

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(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of this Agreement on which the denial is
based;

 
(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 (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits; and

 
(d)
A statement of the claimant’s right to bring a civil action under ERISA Section
502(a).

Article 8
Amendments and Termination
 
8.1
Amendments. This Agreement may be amended only by a written agreement signed by
the Bank and the Executive. However, the Bank may unilaterally amend this
Agreement to conform with written directives to the Bank from its auditors or
banking regulators or to comply with legislative changes or tax law, including
without limitation Code Section 409A.

8.2
Plan Termination Generally. This Agreement may be terminated only by a written
agreement signed by the Bank and the Executive. The benefit shall be the Accrual
Balance as of the date this Agreement is terminated. Except as provided in
Section 8.3, the termination of this Agreement shall not cause a distribution of
benefits under this Agreement. Rather, upon such termination benefit
distributions will be made at the earliest distribution event permitted under
Article 2 or Article 3.

8.3
Plan Terminations Under Code Section 409A. Notwithstanding anything to the
contrary in Section 8.2, if the Bank terminates this Agreement in the following
circumstances:

 
(a)
Within thirty (30) days before or twelve (12) months after a Change in Control,
provided that all distributions are made no later than twelve (12) months
following such termination of this Agreement and further provided that all the
Bank’s arrangements which are substantially similar to this Agreement are
terminated so the Executive and all participants in the similar arrangements are
required to receive all amounts of compensation deferred under the terminated
arrangements within twelve (12) months of such termination;

 
(b)
Upon the Bank’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under this Agreement are included in the Executive’s
gross income in the latest of (i) the calendar year in which this Agreement
terminates; (ii) the calendar year in which the amount is no longer subject to a
substantial risk of forfeiture; or (iii) the first calendar year in which the
distribution is administratively practical; or

 
(c)
Upon the Bank’s termination of this and all other non-account balance plans (as
referenced in Code Section 409A), provided that all distributions are made no

 

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earlier than twelve (12) months and no later than twenty-four (24) months
following such termination, and the Bank does not adopt any new non-account
balance plans for a minimum of five (5) years following the date of such
termination;

the Bank may distribute the Accrual Balance, determined as of the date of the
termination of this Agreement, to the Executive in a lump sum subject to the
above terms.

Article 9
Miscellaneous

9.1
Binding Effect. This Agreement shall bind the Executive and the Bank and their
beneficiaries, survivors, executors, administrators and transferees.

9.2
No Guarantee of Employment. This Agreement is not a contract for employment. It
does not give the Executive the right to remain as an employee of the Bank nor
interfere with the Bank’s right to discharge the Executive. It does not require
the Executive to remain an employee nor interfere with the Executive’s right to
terminate employment at any time.

9.3
Non-Transferability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.

9.4
Tax Withholding and Reporting. The Bank shall withhold any taxes that are
required to be withheld, including but not limited to taxes owed under Code
Section 409A from the benefits provided under this Agreement. The Executive
acknowledges that the Bank’s sole liability regarding taxes is to forward any
amounts withheld to the appropriate taxing authorities. The Bank shall satisfy
all applicable reporting requirements, including those under Code Section 409A.

9.5
Applicable Law. This Agreement and all rights hereunder shall be governed by the
laws of the State of Indiana, except to the extent preempted by the laws of the
United States of America.

9.6
Unfunded Arrangement. The Executive and the Beneficiary are general unsecured
creditors of the Bank for the distribution of benefits under this Agreement. The
benefits represent the mere promise by the Bank to distribute such benefits. The
rights to benefits are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by
creditors. Any insurance on the Executive’s life or other informal funding asset
is a general asset of the Bank to which the Executive and Beneficiary have no
preferred or secured claim.

9.7
Reorganization. The Bank shall not merge or consolidate into or with another
bank, or reorganize, or sell substantially all of its assets to another bank,
firm or person unless such succeeding or continuing bank, firm or person agrees
to assume and discharge the obligations of the Bank under this Agreement. Upon
the occurrence of such an event, the

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term “Bank” as used in this Agreement shall be deemed to refer to the successor
or survivor entity.

9.8
Entire Agreement. This Agreement constitutes the entire agreement between the
Bank and the Executive as to the subject matter hereof. No rights are granted to
the Executive by virtue of this Agreement other than those specifically set
forth herein.

9.9
Interpretation. Wherever the fulfillment of the intent and purpose of this
Agreement requires and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.

9.10
Alternative Action. In the event it shall become impossible for the Bank or the
Plan Administrator to perform any act required by this Agreement due to
regulatory or other constraints, the Bank or Plan Administrator may perform such
alternative act as most nearly carries out the intent and purpose of this
Agreement and is in the best interests of the Bank, provided that such
alternative act does not violate Code Section 409A.

9.11
Headings. Article and section headings are for convenient reference only and
shall not control or affect the meaning or construction of any provision herein.

9.12
Validity. If any provision of this Agreement shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Agreement shall be construed and enforced as if such illegal or
invalid provision had never been included herein.

9.13
Notice. Any notice or filing required or permitted to be given to the Bank or
Plan Administrator under this Agreement shall be sufficient if in writing and
hand-delivered or sent by registered or certified mail to the address below:

 
430 Clifty Drive
P.O. Box 1590
Madison, Indiana 47250
 
Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

Any notice or filing required or permitted to be given to the Executive under
this Agreement shall be sufficient if in writing and hand-delivered or sent by
mail to the last known address of the Executive.

9.14
Deduction Limitation on Benefit Payments. If the Bank reasonably anticipates
that the Bank’s deduction with respect to any distribution under this Agreement
would be limited or eliminated by application of Code Section 162(m), then to
the extent deemed necessary by the Bank to ensure that the entire amount of any
distribution from this Agreement is deductible, the Bank may delay payment of
any amount that would otherwise be

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distributed under this Agreement. The delayed amounts shall be distributed to
the Executive (or the Beneficiary in the event of the Executive’s death) at the
earliest date the Bank reasonably anticipates that the deduction of the payment
of the amount will not be limited or eliminated by application of Code Section
162(m).

9.15
Compliance with Section 409A. This Agreement shall be interpreted and
administered consistent with Code Section 409A.

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the
Bank have signed this Agreement.

EXECUTIVE
 
RIVER VALLEY FINANCIAL BANK
           
By:
 
Matthew Forrester
         
Title:
 

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River Valley Financial Bank
Salary Continuation Agreement
Beneficiary Designation Form 

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{   } New Designation
{   } Change in Designation

I, __________________________, designate the following as Beneficiary under this
Agreement:

Primary:
___________________________________________________________
 
___________________________________________________________
 
_____%
 
_____%
 
Contingent:
___________________________________________________________
 
___________________________________________________________
 
_____%
 
_____%
 

 
Notes:

 
·
Please PRINT CLEARLY or TYPE the names of the beneficiaries.

 
·
To name a trust as Beneficiary, please provide the name of the trustee(s) and
the exact name and date of the trust agreement.

 
·
To name your estate as Beneficiary, please write “Estate of [your name]”.

 
·
Be aware that none of the contingent beneficiaries will receive anything unless
ALL of the primary beneficiaries predecease you.

I understand that I may change these beneficiary designations by delivering a
new written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death. I
further understand that the designations will be automatically revoked if the
Beneficiary predeceases me, or, if I have named my spouse as Beneficiary and our
marriage is subsequently dissolved.

Name:   _______________________________

Signature:   _______________________________      Date:   _______

Received by the Plan Administrator
this ________ day of ___________________, 200____

By:   _________________________________

Title:   _________________________________