EXHIBIT 10.2
 

 
RIVER VALLEY FINANCIAL BANK
SUPPLEMENTAL LIFE INSURANCE AGREEMENT

THIS SUPPLEMENTAL LIFE INSURANCE AGREEMENT (the “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 retain and reward the Executive by dividing
the death proceeds of certain life insurance policies which are owned by the
Bank on the life of the Executive with the designated beneficiary of the
Executive. The Bank will pay the life insurance premiums from its general
assets.

Article 1
Definitions

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

1.1
“Bank’s Interest” means the benefit set forth in Section 2.1.

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

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
“Code” means the Internal Revenue Code of 1986, as amended.

1.6
“Effective Date” means January 1, 2007.

1.7
 
“Executive’s Interest” means the benefit set forth in Section 2.2.

1.8
“Insurer” means the insurance company issuing the Policy on the life of the
Executive.

1.9
“Net Death Proceeds” means the total death proceeds of the Policy minus the
greater of (i) the cash surrender value or (ii) the aggregate premiums paid by
the Bank.

1.10
“Plan Administrator” means the plan administrator described in Article 10.

1.11
“Policy” or “Policies” means the individual insurance policy or policies adopted
by the Bank for purposes of insuring the Executive’s life under this Agreement.
 

 
 
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1.12
“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.

Article 2
Policy Ownership/Interests

2.1
Bank’s Interest. The Bank shall own the Policies and shall have the right to
exercise all incidents of ownership, and the Bank may terminate a Policy without
the consent of the Executive. The Bank shall be the beneficiary of the remaining
death proceeds of the Policies after the Executive’s Interest is determined
according to Section 2.2.

2.2
Executive’s Interest. The Executive, or the Executive’s assignee, shall have the
right to designate the Beneficiary of an amount of death proceeds as specified
in Section 2.2.1. The Executive shall also have the right to elect and change
settlement options with respect to the Executive’s Interest by providing written
notice to the Bank and the Insurer.

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2.2.1
Death Prior to Separation from Service. If the Executive dies while employed by
the Bank, the Executive’s Beneficiary shall be entitled to a benefit equal to
fifty percent (50%) of the Net Death Proceeds.

 
2.2.2
Death After Separation from Service. If the Executive dies after Separation from
Service, the Beneficiary will not be entitled to a benefit under this Agreement

Article 3
Premiums and Imputed Income

3.1
Premium Payment. The Bank shall pay all premiums due on all Policies.

3.2
Economic Benefit. The Bank shall determine the economic benefit attributable to
the Executive based on the life insurance premium factor for the Executive’s age
multiplied by the aggregate death benefit payable to the Beneficiary. The “life
insurance premium factor’ is the minimum factor applicable under guidance
published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any subsequent
authority.

3.3
Imputed Income. The Bank shall impute the economic benefit to the Executive on
an annual basis, by adding the economic benefit to the Executive’s W-2, or if
applicable, Form 1099.

3.4
Reimbursement. The Bank shall pay to the Executive on an annual basis an amount
equal to the federal and state income taxes paid by the Executive on the
economic benefit reported pursuant to Section 3.3.

Article 4
General Limitations

4.1
Removal. Notwithstanding any provision of this Agreement to the contrary, the
Executive’s rights in the Agreement shall terminate 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 (“FDIA”).

Article 5
Beneficiaries

5.1 
Beneficiary. The Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefits payable under the 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
Agreement of the Bank in which the Executive participates.

5.2
Beneficiary Designation; Change. The Executive shall designate a Beneficiary by
completing and signing the Beneficiary Designation Form, and delivering it to
the Bank

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or its designated agent. 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 Bank’s rules and procedures, as in effect from time to
time. Upon the acceptance by the Bank of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled. The Bank shall be
entitled to rely on the last Beneficiary Designation Form filed by the Executive
and accepted by the Bank prior to the Executive’s death.

5.3
Acknowledgment. No designation or change in designation of a Beneficiary shall
be effective until received, accepted and acknowledged in writing by the Bank or
its designated agent.

5.4
No Beneficiary Designation. If the Executive dies without a valid designation of
beneficiary, or if all designated Beneficiaries predecease the Executive, then
the Executive’s surviving spouse shall be the designated Beneficiary. If the
Executive has no surviving spouse, the benefits shall be made payable to the
personal representative of the Executive’s estate.

5.5
Facility of Payment. If the Bank 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 Bank 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 Bank 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 Executive and the Executive’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Agreement for such payment amount.

Article 6
Assignment

The Executive may irrevocably assign without consideration all of the
Executive’s Interest in this Agreement to any person, entity or trust. In the
event the Executive shall transfer all of the Executive’s Interest, then all of
the Executive’s Interest in this Agreement shall be vested in the Executive’s
transferee, who shall be substituted as a party hereunder, and the Executive
shall have no further interest in this Agreement.

Article 7
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
Agreement. The Insurer shall have the right to rely on the Bank’s
representations with regard to any definitions, interpretations or Policy
interests as specified under this Agreement.

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Article 8
Claims And Review Procedure

8.1
Claims Procedure. The Executive or Beneficiary (“claimant”) who has not received
benefits under the Agreement that he or she believes should be paid shall make a
claim for such benefits as follows:

 
8.1.1
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.

 
8.1.2
Timing of Bank Response. The Bank shall respond to such claimant within 90 days
after receiving the claim. If the Bank determines that special circumstances
require additional time for processing the claim, the Bank 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 Bank expects to render its decision.

 
8.1.3
Notice of Decision. If the Bank denies part or all of the claim, the Bank shall
notify the claimant in writing of such denial. The Bank 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 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; and

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

8.2
Review Procedure. If the Bank denies part or all of the claim, the claimant
shall have the opportunity for a full and fair review by the Bank of the denial,
as follows:

 
8.2.1
Initiation - Written Request. To initiate the review, the claimant, within 60
days after receiving the Bank’s notice of denial, must file with the Bank a
written request for review.

 
8.2.2
Additional Submissions - Information Access. The claimant shall then have the
opportunity to submit written comments, documents, records and other

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information relating to the claim. The Bank shall also provide the claimant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to the claimant’s claim for
benefits.

 
8.2.3
Considerations on Review. In considering the review, the Bank 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.

 
8.2.4
Timing of Bank’s Response. The Bank shall respond in writing to such claimant
within 60 days after receiving the request for review. If the Bank determines
that special circumstances require additional time for processing the claim, the
Bank 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 Bank expects to render its
decision.

 
8.2.5
Notice of Decision. The Bank shall notify the claimant in writing of its
decision on review. The Bank 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 Agreement on which the denial is
based; and

 
(c)
A statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claimant’s claim for benefits.

Article 9
Amendments And Termination

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

Article 10
Administration

10.1
Plan Administrator Duties. This Agreement 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 Agreement and (ii) decide or resolve
any and all ques-tions including interpretations of this Agreement, as may arise
in connection with this

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Agreement.

10.2
Agents. In the administration of this Agreement, 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.

10.3
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 this Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in this Agreement.

10.4
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 Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its members.

10.5
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 date and circumstances of the retirement, disability,
death or Separation from Service of the Executive, and such other pertinent
information as the Plan Administrator may reasonably require.

Article 11
Miscellaneous

11.1
Binding Effect. This Agreement shall bind the Executive and the Bank, their
beneficiaries, survivors, executors, administrators, and transferees and any
Beneficiary.

11.2
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
does it interfere with the Bank's right to discharge the Executive. It also does
not require the Executive to remain an employee nor interfere with the
Executive’s right to terminate employment at any time.

11.3
Applicable Law. The Agreement 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.

11.4
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
Agreement. Upon the occurrence of such event, the term “Bank” as used in this
Agreement shall be deemed to refer to the successor or survivor company.

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11.5
Notice. Any notice or filing required or permitted to be given to the Bank 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 or 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.

11.6
Entire Agreement. This Agreement, along with the Executive’s Beneficiary
Designation Form, constitutes the entire agreement between the Bank and the
Executive as to the subject matter hereof. No rights are granted to the
Executive under this Agreement other than those specifically set forth herein.

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

EXECUTIVE: RIVER VALLEY FINANCIAL BANK

________________________________
By ____________________________________
Matthew Forrester
   
Title ____________________________________

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{  } New Designation
{  } Change in Designation

I, Matthew Forrester, designate the following as Beneficiary under the
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 ___________________,
20___

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 Great-West Life & Annuity 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
 
 
Matthew Forrester
 
 
Matthew Forrester

 
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