EXHIBIT 10.1
 

RIVER VALLEY FINANCIAL BANK
SPLIT DOLLAR INSURANCE PLAN

EFFECTIVE JANUARY 1, 2007

Pursuant to due authorization by its Board of Directors, the undersigned, RIVER
VALLEY FINANCIAL BANK, a savings association located in Madison, Indiana (the
“Bank”), did constitute, establish and adopt the following SPLIT DOLLAR
INSURANCE PLAN (the “Plan”) this 25th day of January, 2007.

The purpose of this Plan is to attract, retain and reward Employees by dividing
the death proceeds of certain life insurance policies which are owned by the
Bank on the lives of the participating Employees with the designated beneficiary
of each insured participating Employee. The Bank will pay the life insurance
premiums due under this Plan from its general assets.

Article 1
Definitions

Whenever used in this Plan, the following terms shall have the meanings
specified:

1.1
“Bank’s Interest” means the benefit set forth in Section 3.1.

1.2
“Beneficiary” means each designated person, or the estate of a deceased
Participant, entitled to benefits, if any, upon the death of a Participant.

1.3
“Beneficiary Designation Form” means the form established from time to time by
the Plan Administrator that a Participant 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
“Code” means the Internal Revenue Code of 1986, as amended.

1.6
“Effective Date” means January 1, 2007.

1.7
“Election Form” means the form required by the Plan Administrator of an eligible
Employee to indicate acceptance of participation in this Plan.

1.8
“Employee” means an active employee of the Bank.

1.9
“Insured” means an individual Participant whose life is insured.

1.10
“Insurer” means an insurance company or companies issuing a Policy or Policies
on the

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        life of an Insured.

1.11
“Net Death Proceeds” means the total death proceeds of a Participant’s Policy or
Policies minus the greater of (i) cash surrender value or (ii) the aggregate
premiums paid by the Bank.

1.12
“Participant” means an Employee (i) who is selected to participate in the Plan,
(ii) who elects to participate in the Plan, (iii) who signs an Election Form and
a Beneficiary Designation Form, (iv) whose signed Election Form and Beneficiary
Designation Form are accepted by the Plan Administrator, (v) who commences
participation in the Plan, and (vi) whose Participation has not terminated.

1.13
“Participant’s Interest” means the benefit set forth in Section 3.2.

1.14
“Plan Administrator” means the plan administrator described in Article 12.

1.15
“Policy” or “Policies” means the individual life insurance policy or policies
adopted by the Plan Administrator for purposes of insuring a Participant’s life
under this Plan.

1.16
“Separation from Service” means the termination of a Participant’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
Participant’s employment and whether the Bank and the Participant intended for
the Participant to provide significant services for the Bank following such
termination. A Separation from Service will not have occurred if:

 

 
(a)
the Participant 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 Participant 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 Participant’s employment relationship will be treated as continuing intact
while the

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Participant 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 Participant’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. 

Article 2
Participation

2.1
Selection by Plan Administrator. Participation in the Plan shall be limited to
those Employees of the Bank selected by the Plan Administrator, in its sole
discretion, to participate in the Plan.

 
2.2
Enrollment Requirements. As a condition to participation, each selected Employee
shall complete, execute and return to the Plan Administrator (i) an Election
Form, and (ii) a Beneficiary Designation Form. In addition, the Plan
Administrator shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary.

 
2.3
Eligibility; Commencement of Participation. Provided an Employee selected to
participate in the Plan has met all enrollment requirements set forth in this
Plan and required by the Plan Administrator, and provided that the Policy or
Policies on a such Employee have been issued by the Insurer(s), that Employee
will become a Participant, be covered by the Plan and will be eligible to
receive benefits at the time and in the manner provided hereunder, subject to
the provisions of the Plan. A Participant’s participation is limited to only
issued Policies where the Participant is the Insured.

 
2.4
Termination of Participation. A Participant’s rights under this Plan shall
automatically cease and his or her participation in this Plan shall
automatically terminate if the Plan or any Participant’s rights under the Plan
are terminated in accordance with Articles 6 or 11. In the event that the Bank
decides to maintain the Policy after the Participant’s termination of
participation in the Plan, the Bank shall be the direct beneficiary of the
entire death proceeds of the Policy.

 
 
Article 3
Policy Ownership/Interests

3.1
Bank’s Interest. The Bank shall own the Policies and shall have the right to
exercise all incidents of ownership and, subject to Article 5, the Bank may
terminate a Policy without the consent of the Insured. The Bank shall be the
beneficiary of the remaining death proceeds of the Policies after the
Participant’s Interest is determined according to Section 3.2.

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3.2
Participant’s Interest. The Participant, or the Participant’s assignee, shall
have the right to designate the Beneficiary of an amount of death proceeds as
specified in Section 3.2.1. The Participant shall also have the right to elect
and change settlement options with respect to the Participant’s Interest by
providing written notice to the Bank and the Insurer.

 
3.2.1
Death Prior to Separation from Service. If the Participant dies while employed
by the Bank, the Participant’s Beneficiary shall be entitled to a benefit equal
to the lesser of (i) the Net Death Proceeds, or (ii) One Hundred Thousand
Dollars ($100,000).

 
3.2.2
Death After Separation from Service. If the Participant dies after Separation
from Service, the Beneficiary will not be entitled to any benefit under this
Agreement.

Article 4
Premiums And Imputed Income

4.1
Premium Payment. The Bank shall pay all premiums due on all Policies.

4.2
Economic Benefit. The Plan Administrator shall determine the economic benefit
attributable to any Participant based on the life insurance premium factor for
the Participant’s age multiplied by the aggregate death benefit payable to the
Participant’s Beneficiary. The “life insurance premium factor” is the minimum
amount required to be imputed under IRS Reg. §1.61-22(d)(3)(ii) or any
subsequent applicable authority.

4.3
Imputed Income. The Bank shall impute the economic benefit to the Participant on
an annual basis, by adding the economic benefit to the Participant’s W-2, or if
applicable, Form 1099.

Article 5
Comparable Coverage

5.1
Insurance Policies. The Bank may provide such benefit through the Policies
purchased at the commencement of this Plan, or, if later, the Participant’s
commencement of participation in the Plan, or may provide comparable insurance
coverage to the Participant through whatever means the Bank deems appropriate.
If the Participant waives or forfeits his or her right to the insurance benefit,
the Bank shall choose to cancel the Policy or Policies on the Participant, or
may continue such coverage and become the direct beneficiary of the entire death
proceeds.

5.2
Offer to Purchase. If the Bank discontinues a Policy on a Participant who is
employed by the Bank at the date of discontinuance, the Bank shall give the
Participant at least thirty (30) days to purchase such Policy. The purchase
price shall be the fair market value of the

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Policy, as determined under Treasury Reg. §1.61-22(g)(2) or any subsequent
applicable authority. Such notification shall be in writing.

Article 6
General Limitations

6.1
Termination for Cause. Notwithstanding any provision of this Plan to the
contrary, the Participant shall forfeit any right to a benefit under this Plan
if the Bank terminates the Participant’s employment for cause. Termination of
the Participant’s employment for “Cause” shall mean termination because of
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 the Plan. For purposes of this paragraph, no act or failure to act
on the Participant’s part shall be considered “willful” unless done, or omitted
to be done, by the Participant not in good faith and without reasonable belief
that the Participant’s action or omission was in the best interest of the Bank.

6.2
Removal. Notwithstanding any provision of this Plan to the contrary, the
Participant’s rights in the Plan shall terminate if the Participant 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 (“FDIA”).

6.3
Suicide or Misstatement. No benefits shall be payable if the Participant commits
suicide within two years after the date of this Plan, or if the insurance
company denies coverage (i) for material misstatements of fact made by the
Participant on any application for life insurance purchased by the Bank, or (ii)
for any other reason; provided, however that the Bank shall evaluate the reason
for the denial, and upon advice of legal counsel and in its sole discretion,
consider judicially challenging any denial.

Article 7
Beneficiaries

7.1 
Beneficiary. Each Participant shall have the right, at any time, to designate a
Beneficiary to receive any benefits payable under the Plan upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the beneficiary designated under any other plan of the Bank in
which the Participant participates.

7.2
Beneficiary Designation; Change; Spousal Consent. A Participant 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
Participant names someone other than his or her spouse as a Beneficiary, a
spousal consent, in the form designated by the Plan Administrator, must be
signed by the Participant’s spouse and returned to the Plan Administrator. The
Participant’s beneficiary designation shall be deemed

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automatically revoked if the Beneficiary predeceases the Participant or if the
Participant names a spouse as Beneficiary and the marriage is subsequently
dissolved. A Participant 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, as in effect
from time to time. 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 Participant and accepted by the Plan
Administrator prior to the Participant’s death.

7.3
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.

7.4
No Beneficiary Designation. If the Participant dies without a valid designation
of beneficiary, or if all designated Beneficiaries predecease the Participant,
then the Participant’s surviving spouse shall be the designated Beneficiary. If
the Participant has no surviving spouse, the benefits shall be made payable to
the personal representative of the Participant’s estate.

7.5
Facility of Payment. If the Plan Administrator determines in its discretion that
a benefit is to be paid 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 payment 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 payment of a benefit shall be a payment for the
account of the Participant and the Participant’s Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Plan for such
payment amount.

Article 8
Assignment

Any Participant may assign without consideration all of such Participant’s
Interest in this Plan to any person, entity or trust. In the event a Participant
shall transfer all of such Participant’s Interest, then all of that
Participant’s Interest in this Plan shall be vested in his or her transferee,
subject to such transferee executing agreements binding them to the provisions
of this Plan, who shall be substituted as a party hereunder, and that
Participant shall have no further interest in this Plan.
 
Article 9
Insurer
 
The Insurer shall be bound only by the terms of its given Policy. The Insurer
shall not be bound by or deemed to have notice of the provisions of this Plan.
The Insurer shall have the right to rely on the Plan Administrator’s
representations with regard to any definitions, interpretations

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or Policy interests as specified under this Plan.

Article 10
Claims And Review Procedure

10.1
Claims Procedure. A Participant or Beneficiary (“claimant”) who has not received
benefits under the Plan that he or she believes should be paid shall make a
claim for such benefits as follows:

 
10.1.1
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.

 
10.1.2
Timing of Plan Administrator Response. The Plan Administrator shall respond to
such claimant within 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 90 days by notifying the claimant in writing, prior to the end of
the initial 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.

 
10.1.3
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:

 
(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of the Plan 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 the Plan’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.

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10.2 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:

 
10.2.1
Initiation - Written Request. To initiate the review, the claimant, within 60
days after receiving the Plan Administrator’s notice of denial, must file with
the Plan Administrator a written request for review.

 
10.2.2
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.

 
10.2.3
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.

 
10.2.4
Timing of Plan Administrator’s Response. The Plan Administrator shall respond in
writing to such claimant within 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 60 days by notifying the claimant in writing,
prior to the end of the initial 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.

 
10.2.5
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:

 
(a)
The specific reasons for the denial;

 
(b)
A reference to the specific provisions of the Plan 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).

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Article 11
Amendments And Termination

The Bank may amend or terminate the Plan at any time, or may amend or terminate
a Participant’s rights under the Plan at any time prior to a Participant’s
death, by providing written notice of such to the Participant. In the event that
the Bank decides to maintain the Policy after the Participant’s termination of
participation in the Plan, the Bank shall be the direct beneficiary of the
entire death proceeds of the Policy.
 

Article 12
Administration

12.1
Plan Administrator Duties. This Plan shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or persons as
the Board may choose. The Plan Administrator shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Plan and (ii) decide or resolve any
and all ques-tions including interpretations of this Plan, as may arise in
connection with the Plan.

12.2
Agents. In the administration of this Plan, the Plan Administrator may employ
agents and delegate to them such administrative duties as it 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.

12.3
Binding Effect of Decisions. The decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding upon
all persons having any interest in the Plan.

12.4
Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the
members of 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 Plan, except in the case of willful misconduct by the Plan Administrator
or any of its members.

12.5
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 its Participants, the date and circumstances of the
retirement or Separation from Service of its Participants, and such other
pertinent information as the Plan Administrator may reasonably require.

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Article 13
Miscellaneous

13.1
Binding Effect. This Plan shall bind each Participant and the Bank, their
beneficiaries, survivors, executors, administrators and transferees and any
Beneficiary.

13.2
No Guarantee of Employment. This Plan is not an employment policy or contract.
It does not give a Participant the right to remain an Employee of the Bank, nor
does it interfere with the Bank’s right to discharge a Participant. It also does
not require a Participant to remain an Employee nor interfere with a
Participant’s right to terminate employment at any time.

13.3
Applicable Law. The Plan and all rights hereunder shall be governed by and
construed according to the laws of the State of Indiana, except to the extent
preempted by the laws of the United States of America.

13.4
Reorganization. The Bank shall not merge or consolidate into or with another
company, or reorganize, or sell substantially all of its assets to another
company, firm or person unless such succeeding or continuing company, firm or
person agrees to assume and discharge the obligations of the Bank under this
Plan. Upon the occurrence of such event, the term “Bank” as used in this Plan
shall be deemed to refer to the successor or survivor company.

13.5
Notice. Any notice or filing required or permitted to be given to the Plan
Administrator under this Plan 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 or the receipt for
registration or certification.
 
Any notice or filing required or permitted to be given to a Participant under
this Plan shall be sufficient if in writing and hand-delivered, or sent by mail,
to the last known address of the Participant.

13.6
Entire Agreement. This Plan, along with a Participant’s Election Form,
Beneficiary Designation Form and any agreement in writing between the Bank and
any Participant, constitute the entire agreement between the Bank and the
Participant as to the subject matter hereof. No rights are granted to the
Participant under this Plan other than those specifically set forth herein.

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IN WITNESS WHEREOF, the Bank executes this Plan as of the date indicated above.

 
RIVER VALLEY FINANCIAL BANK
             
By
 

 
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I, _____________________________, an Employee designated as set forth in Article
2 of the River Valley Financial Bank Split Dollar Insurance Plan (the “Plan”)
effective January 1, 2007, hereby elect to become a Participant of this Plan
according to Article 2 of the Plan.

Additionally, I acknowledge that I have read the Plan document and understand
that commencement of participation is contingent on issuance of an insurance
policy or policies applied for by the Bank on my life which names the Bank as
beneficiary. I further agree to be bound by the terms of the Plan.

Executed this ______ day of ______________________, 200___

________________________________
Participant

Acknowledged by the Plan Administrator this ________ day of ___________________,
200___

By _________________________________

Title ________________________________

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POLICY ENDORSEMENT

Contract Owner: RIVER VALLEY FINANCIAL BANK

The undersigned Owner requests that the policies shown in the attached Schedule
Page issued by Midland National Life Insurance Company (the “Insurer”) provide
for the following beneficiary designation:

 
1. Upon the death of the Insured, proceeds shall be paid in one sum to the
Owner, its successors or assigns, as Beneficiary, to the extent claimed by said
Owner.

2. Any proceeds at the death of the Insured in excess of the amount paid under
the provisions of paragraph 1 of this Policy Endorsement shall be paid in one
sum in accordance with the written direction of the Owner. Such direction will
be provided to the Insurer at the time of claim. The Insurer will be protected
in relying solely on the Owner to provide the name(s) of the party(ies) to pay
any excess not paid under paragraph 1. If the Owner fails to provide the name(s)
of the party(ies) at the time of claim, then any proceeds payable under this
paragraph shall be paid in one sum to the Beneficiary.

3. It is hereby provided that (i) any payment made to the Beneficiary or other
party under paragraph 2 of this Policy Endorsement shall be a full discharge of
the Insurer to the extent thereof; (ii) such discharge shall be binding on all
parties claiming any interest under the Policy; and (iii) the Insurer shall have
no responsibility with respect to the amounts so claimed.

4. It is agreed by the undersigned that this designation shall be subject in all
respects to the contractual terms of the Policy.

The undersigned is signing in a representative capacity for the Owner and
warrants that he or she has the authority to bind the entity on whose behalf
this document is being executed.

Signed at Madison, Indiana this 25th day of January, 2007.

OWNER:
RIVER VALLEY FINANCIAL BANK

By:
____________________________
By:
_____________________________
 
(Signature: Bank Officer #1)
 
(Signature Bank Officer #2)
 
____________________________
 
_____________________________
 
(Printed)
 
(Printed)
Title:
____________________________
Title:
 

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Schedule Page
Policies Subject to Policy Endorsement

Policy Number
Insured
                                       

 
 
 
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