CHANGE-IN-CONTROL SEVERANCE AGREEMENT

THIS AGREEMENT entered into and effective this 6th day of March, 2006, by and
between Ameriana Bank and Trust (the “Bank”) and Matthew Branstetter (the
“Employee”).

WHEREAS, the parties desire by this writing to set forth their understanding as
to their respective rights and obligations in the event a change of control
occurs with respect to the Bank or Ameriana Bancorp (the “Company”).

NOW THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the undersigned parties AGREE as follows:

 

  1. Defined Terms

When used anywhere in the Agreement, the following terms shall have the meaning
set forth herein.

(a) “Change in Control” shall mean any one of the following events: (i) the
acquisition of ownership, holding or power to vote more than 25% of the Bank’s
or the Company’s voting stock, (ii) the acquisition of the ability to control
the election of a majority of the Bank’s or the Company’s directors, (iii) the
acquisition of a controlling influence over the management or policies of the
Bank or the Company by any person or by persons acting as a “group” (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934), or (iv) during
any period of two consecutive years, individuals (the “Continuing Directors”)
who at the beginning of such period constitute the Board of Directors of the
Bank or the Company (the “Existing Board”) cease for any reason to constitute at
least two-thirds thereof, provided that any individual whose election or
nomination for election as a member of the Existing Board was approved by a vote
of at least two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. Notwithstanding the foregoing, ownership or
control of the Bank by the Company itself shall not constitute a Change of
Control. Further, “Change in Control” shall not include the acquisition of
securities by an employee benefit plan of the Bank or the Company. For purposes
of this paragraph only, the term “person” refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole

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proprietorship, unincorporated organization or any other form of entity not
specifically listed herein.

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and as interpreted through applicable rulings and regulations in effect
from time to time.

(c) “Code Section 280G Maximum” shall mean product 2.99 and his “base amount” as
defined in Code Section 280G(b)(3).

(d) “Good Reason” shall mean any of the following events, which has not been
consented to in advance by the Employee in writing: (i) the requirement that the
Employee move his personal residence, or perform his principal executive
functions, more than thirty (30) miles from his primary office as of the date of
the Change in Control; (ii) a material reduction in the Employee’s base
compensation as in effect on the date of the Change in Control or as the same
may be increased from time to time; (iii) the failure by the Bank or the Company
to continue to provide the Employee with compensation and benefits provided for
on the date of the Change in Control, as the same may be increased from time to
time, or with benefits substantially similar to those provided to him under any
of the employee benefit plans in which the Employee now or hereafter becomes a
participant, or the taking of any action by the Bank or the Company which would
directly or indirectly reduce any of such benefits or deprive the Employee of
any material fringe benefit enjoyed by him at the time of the Change in Control;
(iv) the assignment to the Employee of duties and responsibilities materially
different from those normally associated with his position; (v) a material
diminution or reduction in the Employee’s responsibilities or authority
(including reporting responsibilities) in connection with his employment with
the Bank or the Company; or (vi) a material reduction in the secretarial or
other administrative support of the Employee.

(e) “Just Cause” shall mean, in the good faith determination of the Bank’s Board
of Directors, the Employee’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

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than traffic violations or similar offenses) or final cease-and-desist order, or
material breach of any provision of this Agreement. The Employee shall have no
right to receive compensation or other benefits for any period after termination
for Just Cause. No act, or failure to act, on the Employee’s part shall be
considered “willful” unless he has acted, or failed to act, with an absence of
good faith and without a reasonable belief that his action or failure to act was
in the best interest of the Bank and the Company.

(f) “Protected Period” shall mean the period that begins on the date six months
before a Change in Control and ends on the later of the first annual anniversary
of the Change in Control or the expiration date of this Agreement.

 

  2. Trigger Events

The Employee shall be entitled to collect the severance benefits set forth in
Section 3of this Agreement in the event that (i) the Employee voluntarily
terminates employment for any reason within the 30-day period beginning on the
date of a Change in Control, (ii) the Employee voluntarily terminates employment
within 90 days of an event that both occurs during the Protected Period and
constitutes Good Reason, or (iii) the Bank, the Company, or their successor(s)
in interest terminate the Employee’s employment for any reason other than Just
Cause during the Protected Period.

 

  3. Amount of Severance Benefit

If the Employee becomes entitled to collect severance benefits pursuant to
Section 2 hereof, the Bank shall pay the Employee a severance benefit equal to
the difference between the Code Section 280G Maximum and the sum of any other
“parachute payments” as defined under Code Section 280G(b)(2) that the Employee
receives on account of the Change in Control. Said sum shall be paid in one lump
sum within ten (10) days of the later of the date of the Change in Control and
the Employee’s last day of employment with the Bank or the Company.

In the event that the Employee and the Bank agree that the Employee has
collected an amount exceeding the Code Section 280G Maximum, the parties may
jointly agree in

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writing that such excess shall be treated as a loan ab initio which the Employee
shall repay to the Bank, on terms and conditions mutually agreeable to the
parties, together with interest at the applicable federal rate provided for in
Section 7872(f)(2)(B) of the Code.

4.     Term of the Agreement. This Agreement shall remain in effect for the
period commencing on the Effective Date and ending on the earlier of (i) the
date 36 months after the Effective Date, and (ii) the date on which the Employee
terminates employment with the Bank; provided that the Employee’s rights
hereunder shall continue following the termination of this employment with the
Bank under any of the circumstances described in Section 2 hereof. Additionally,
on each annual anniversary date from the Effective date, the term of this
Agreement shall be extended for an additional one-year period beyond the then
effective expiration date provided the Board of Directors of the Bank determines
in a duly adopted resolutions that the performance of the Employee has met the
requirements and standards of the respective Boards, and that the Agreement
shall be extended.

 

  5. Termination or Suspension Under Federal Law

(a) Any payments made to the Employee pursuant to this Agreement, or otherwise,
are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.

(b) If the Employee is removed and/or permanently prohibited from participating
in the conduct of the Bank’s affairs by an order issued under Sections 8(e)(4)
or 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818 (e)(4)
or (g)(1)), all obligations of the Bank under this Agreement shall terminate, as
of the effective date of the order, but the vested rights of the parties shall
not be affected.

(c) If the Bank is in default (as defined in Section 3(x)(1) of FDIA), all
obligations under this Agreement shall terminate as of the date of default;
however, this Paragraph shall not affect the vested rights of the parties.

(d) All obligations under this Agreement shall terminate, except to the extent
that continuation of this

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Agreement is necessary for the continued operation of the Bank: (i) by the
Director of the Department of Financial Institutions, State of Indiana
(“Director”), or his or her designee, at the time that the Federal Deposit
Insurance Corporation (“FDIC”) enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
FDIA; or (ii) by the Director, or his or her designee, at the time that the
Director, or his or her designee approves a supervisory merger to resolve
problems related to operation of the Bank or when the Bank is determined by the
Director to be in an unsafe or unsound condition. Such action shall not affect
any vested rights of the parties.

(e) If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12 U.S.C.
1818(e)(3) and (g)(1)) suspends and/or temporarily prohibits the Employee from
participating in the conduct of the Bank’s affairs, the Bank’s obligations under
this Agreement shall be suspended as of the date of such service, unless stayed
by appropriate proceedings. If the charges in the notice are dismissed, the Bank
shall (i) pay the Employee all or part of the compensation withheld while its
contract obligations were suspended, and (ii) reinstate (in whole or in part)
any of its obligations which were suspended.

 

  6. Expense Reimbursement

In the event that any dispute arises between the Employee and the Bank as to the
terms of interpretation of this Agreement, whether instituted by formal legal
proceedings or otherwise, including any action that the Employee takes to
enforce the terms of this Agreement or to defend against any action taken by the
Bank or the Company, the Employee shall be reimbursed for all costs and
expenses, including reasonable attorneys’ fees, arising from such dispute,
proceedings or actions, provided that the Employee shall obtain a final judgment
in favor of the Employee in a court of competent jurisdiction or in binding
arbitration under the rules of the American Arbitration Association. Such
reimbursement shall be paid within ten (10) days of the Employee’s furnishing to
the Bank and the Company written evidence, which may be in the form, among other
things, of a cancelled check or receipt, of any costs or expenses incurred by
the Employee.

 

  7. Successors and Assigns

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(a) This Agreement shall inure to the benefit of and be binding upon any
corporate or other successor of the Bank or Company which shall acquire,
directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Bank or Company.

(b) Since the Bank is contracting for the unique and personal skills of the
Employee, the Employee shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written consent of the
Bank.

 

  8. Amendments

No amendments or additions to this Agreement shall be binding unless made in
writing and signed by all of the parties, except as herein otherwise
specifically provided.

 

  9. Applicable Law

Except to the extent preempted by Federal law, the laws of the State of Indiana
shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.

 

  10. Severability

The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

 

  11. Entire Agreement

This Agreement including the recitals, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto and shall supercede any prior
agreement between the parties.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first hereinabove written.

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ATTEST:

   

AMERIANA BANK AND TRUST

/S/ NANCY A. ROGERS    

By:

  /S/ JEROME J. GASSEN Secretary      

President

 

 

 

WITNESS:

      /S/ DAVEN K. LITTRELL       /S/ MATTHEW BRANSTATTER      

Employee