Recognition and Retention Plan


    

      Exhibit
        10.2

       

       

      LSB
        FINANCIAL CORP.

      RECOGNITION
        AND RETENTION PLAN

       

      1. Plan
        Purpose.  The
        purpose of the Plan is to promote the long-term interests of the Corporation
        and
        its stockholders by providing a means for attracting and retaining directors
        and
        officers of the Corporation and its Affiliates.

       

      2. Definitions. 
        The
        following definitions are applicable to the Plan:

       

      “Award”
-
        means the grant by the Committee of Restricted Stock, as provided in the
        Plan.

       

      “Affiliate”
        - means any “parent corporation” or “subsidiary corporation” of the Corporation,
        as such terms are defined in Section 424(e) and (f), respectively, of the
        Code.

       

      “Bank”
-
        means Lafayette Savings Bank, FSB, a capital stock savings bank or any successor
        entity.

       

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

       

      “Committee”
        - means the Committee referred to in Section 7 hereof.

       

      “Continuous
        Service” - means the absence of any interruption or termination of service as a
        director, director emeritus, officer or employee of the Corporation or any
        Affiliate. Service shall not be considered interrupted in the case of sick
        leave, military leave or any other leave of absence approved by the Corporation
        or any Affiliate or in the case of transfers between payroll locations of
        the
        Corporation or between the Corporation, its subsidiaries or its
        successor.

       

      “Corporation”
        - means LSB Financial Corp., an Indiana corporation.

       

      “ERISA”
-
        means the Employee Retirement Income Security Act of 1974, as
        amended.

       

      “Non-Employee
        Director” - means a director who a) is not currently an officer or employee of
        the Corporation; b) is not a former employee of the Corporation who receives
        compensation for prior services (other than from a tax-qualified retirement
        plan); c) has not been an officer of the Corporation; d) does not receive
        remuneration from the Corporation in any capacity other than as a director,
        except "De Minimis Remuneration" as defined in the rules promulgated pursuant
        to
        Section 162(m) of the Code; and e) does not possess an interest in any other
        transactions or is not engaged in a business relationship for which disclosure
        would be required under Item 404(a) or (b) of Regulation S-K.

       

      “Participant”
        - means any director, director emeritus, officer or employee of the Corporation
        or any Affiliate who is selected by the Committee to receive an
        Award.

       

      “Plan”
-
        means the Recognition and Retention Plan of the Corporation.

       

      “Restricted
        Period” - means the period of time selected by the Committee for the purpose of
        determining when restrictions are in effect under Section 3 hereof with respect
        to Restricted Stock awarded under the Plan.

       


      
        
          
          

        

        
          
            

          

        

        
          
          

        

      


      “Restricted
        Stock” - means Shares which have been contingently awarded to a Participant by
        the Committee subject to the restrictions referred to in Section 3 hereof,
        so
        long as such restrictions are in effect.

       

      ‘“Shares”
        - means the common stock, par value $0.01 per share, of the
        Corporation.

       

      3. Terms
        and Conditions of Restricted Stock.  The
        Committee shall have full and complete authority, subject to the limitations
        of
        the Plan, to grant awards of Restricted Stock and, in addition to the terms
        and
        conditions contained in paragraphs (a) through (f) of this Section 3, to
        provide
        such other terms and conditions (which need not be identical among Participants)
        in respect of such Awards, and the vesting thereof, as the Committee shall
        determine.

       

      (a) At
        the
        time of an award of Restricted Stock, the Committee shall establish for each
        Participant a Restricted Period, during which or at the expiration of which,
        as
        the Committee shall determine and provide in the agreement referred to in
        paragraph (d) of this Section 3, the Shares awarded as Restricted Stock shall
        vest, and subject to any such other terms and conditions as the Committee
        shall
        provide, shares of Restricted Stock may not be sold, assigned, transferred,
        pledged, voted or otherwise encumbered by the Participant, except as hereinafter
        provided, during the Restricted Period. Except for such restrictions, and
        subject to paragraphs (c) and (e) of this Section 3 and Section 4 hereof,
        the
        Participant as owner of such shares shall have all the rights of a
        stockholder.

       

      No
        director who is not an employee of the Corporation shall be granted Awards
        with
        respect to more than 5% of the total shares subject to the Plan. All
        non-employee directors of the Corporation, in the aggregate, may not be granted
        Awards with respect to more than 30% of the total shares subject to the Plan
        and
        no individual shall be granted Awards with respect to more than 25% of the
        total
        shares subject to the Plan. No Awards shall begin vesting earlier than one
        year
        from the date the Plan is approved by stockholders of the Corporation and
        shall
        not vest at a rate in excess of 20% per year, beginning from the date of
        grant.
        In the event Office of Thrift Supervision Regulations are amended (the “Amended
        Regulations”) to permit shorter vesting periods, any Award made pursuant to this
        Plan, which Award is subject to the requirements of such Amended Regulations,
        may vest, at the sole discretion of the Committee, in accordance with such
        Amended Regulations.

       

      Subject
        to compliance with the Office of Thrift Supervision Regulations, the Committee
        shall have the authority, in its discretion, to accelerate the time at which
        any
        or all of the restrictions shall lapse with respect thereto, or to remove
        any or
        all of such restrictions, whenever it may determine that such action is
        appropriate by reason of changes in applicable tax or other laws or other
        changes in circumstances occurring after the commencement of such Restricted
        Period.

       

      (b) Except
        as
        provided in Section 5 hereof, if a Participant ceases to maintain Continuous
        Service for any reason (other than death or disability), all Shares of
        Restricted Stock theretofore awarded to such Participant and which at the
        time
        of such termination of Continuous Service are subject to the restrictions
        imposed by paragraph (a) of this Section 3 shall upon such termination of
        Continuous Service be forfeited and returned to the Corporation. If a
        Participant ceases to maintain Continuous Service by reason of death or
        disability, Restricted Stock then still subject to restrictions imposed by
        paragraph (a) of this Section 3 will be free of those restrictions.

       


      
        
          
          

        

        
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        (c) Each
          certificate in respect of Shares of Restricted Stock awarded under the
          Plan
          shall be registered in the name of the Participant and deposited by the
          Participant, together with a stock power endorsed in blank, with the Corporation
          and shall bear the following (or a similar) legend:

         

        The
          transferability of this certificate and the shares of stock represented
          hereby
          are subject to the terms and conditions (including forfeiture) contained
          in the
          Recognition and Retention Plan of LSB Financial Corp. Copies of such Plan
          are on
          file in the office of the Secretary of LSB Financial Corp., 101 Main Street,
          Lafayette, Indiana 47901.

         

        (d) At
          the
          time of any Award, the Participant shall enter into an agreement with the
          Corporation in a form specified by the Committee, agreeing to the terms
          and
          conditions of the Award and such other matters as the Committee, in its
          sole
          discretion, shall determine (the “Restricted Stock Agreement”).

         

        (e) At
          the
          time of an award of shares of Restricted Stock, the Committee shall determine
          that the payment to the Participant of dividends declared or paid on such
          shares
          by the Corporation shall be deferred until the lapsing of the restrictions
          imposed under paragraph (a) of this Section 3, and shall be held by the
          Corporation for the account of the Participant until such time. There shall
          be
          credited at the end of each year (or portion thereof) interest on the amount
          of
          the account at the beginning of the year at a rate per annum as the Committee,
          in its discretion, may determine. Payment of deferred dividends, together
          with
          interest accrued thereon, shall be made upon the earlier to occur of the
          lapsing
          of the restrictions imposed under paragraph (a) of this Section 3 or upon
          death
          or disability of the Participant.

         

        (f) At
          the
          expiration of the restrictions imposed by paragraph (a) of this Section
          3, the
          Corporation shall redeliver to the Participant (or where the relevant provision
          of paragraph (b) of this Section 3 applies in the case of a deceased
          Participant, to his legal representative, beneficiary or heir) the
          certificate(s) and stock power deposited with it pursuant to paragraph
          (c) of
          this Section 3 and the Shares represented by such certificate(s) shall
          be free
          of the restrictions referred to in paragraph (a) of this Section 3.

         

      

      4. Adjustments
        Upon Changes in Capitalization.  In
        the
        event of any change in the outstanding Shares subsequent to the effective
        date
        of the Plan by reason of any reorganization, recapitalization, stock split,
        stock dividend, combination or exchange of shares, merger, consolidation
        or any
        change in the corporate structure or Shares of the Corporation, the maximum
        aggregate number and class of shares as to which Awards may be granted under
        the
        Plan and the number and class of shares with respect to which Awards theretofore
        have been granted under the Plan shall be appropriately adjusted by the
        Committee, whose determination shall be conclusive. Any shares of stock or
        other
        securities received, as a result of any of the foregoing, by a Participant
        with
        respect to Restricted Stock shall be subject to the same restrictions and
        the
        certificate(s) or other instruments representing or evidencing such shares
        or
        securities shall be legended and deposited with the Corporation in the manner
        provided in Section 3 hereof.

       

      5. Effect
        of Change in Control.  Each
        of
        the events specified in the following clauses (i) through (iii) of this Section
        5 shall be deemed a “change of control” : (i)
        any
        third person, including a “group” as defined in Section 13(d)(3) of the
        Securities Exchange Act of 1934, shall 

       


      
        
          
          

        

        
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      become
        the beneficial owner of shares of the Corporation with respect to which 25%
        or
        more of the total number of votes which may be cast for the election of the
        Board of Directors of the Corporation, (ii) as a result of, or in connection
        with, any cash tender offer, merger or other business combination, sale of
        assets or contested election, or combination of the foregoing, the persons
        who
        were directors of the Corporation shall cease to constitute a majority of
        the
        Board of Directors of the Corporation, or (iii) the stockholders of the
        Corporation shall approve an agreement providing either for a transaction
        in
        which the Corporation will cease to be an independent publicly owned entity
        or
        for a sale or other disposition of all or substantially all the assets of
        the
        Corporation. If
        the
        Continuous Service of any Participant of the Corporation is involuntarily
        terminated for whatever reason, except for cause, at any time within eighteen
        months after a change in control, unless the Committee shall have otherwise
        provided, any Restricted Period with respect to Restricted Stock theretofore
        awarded to such Participant shall lapse upon such termination and all Shares
        awarded as Restricted Stock shall become fully vested in the Participant
        to whom
        such Shares were awarded.

       

      6. Assignments
        and Transfers.  No
        Award
        nor any right or interest of a Participant under the Plan in any instrument
        evidencing any Award under the Plan may be assigned, encumbered or transferred
        except, in the event of the death of a Participant, by will or the laws of
        descent and distribution or pursuant to a qualified domestic relations order
        as
        defined in the Code or Title I of ERISA or the rules thereunder.

       

      7. Administration. 
        The
        Plan
        shall be administered by a Committee consisting of two or more members, each
        of
        whom shall be a Non-Employee Director. The members of the Committee shall
        be
        appointed by the Board of Directors of the Corporation. Except as limited
        by the
        express provisions of the Plan, the Committee shall have sole and complete
        authority and discretion, subject to Office of Thrift Supervision Regulations,
        to (i) select Participants and grant Awards; (ii) determine the number of
        shares
        to be subject to types of Awards generally, as well as to individual Awards
        granted under the Plan; (iii) determine the terms and conditions upon which
        Awards shall be granted under the Plan; (iv) prescribe the form and terms
        of
        instruments evidencing such grants; and (v) establish from time to time
        regulations for the administration of the Plan, interpret the Plan, and make
        all
        determinations deemed necessary or advisable for the administration of the
        Plan.

       

      A
        majority of the Committee shall constitute a quorum, and the acts of a majority
        of the members present at any meeting at which a quorum is present, or acts
        approved in writing by a majority of the Committee without a meeting, shall
        be
        acts of the Committee.

       

      8. Shares
        Subject to Plan.  Subject
        to adjustment by the operation of Section 4 hereof, the maximum number of
        Shares
        with respect to which Awards may be made under the Plan is 4% of the total
        Shares sold in the Bank’s conversion to stock form, subject to the Bank’s
        capital level meeting OTS regulatory requirements at the time of submission
        to
        stockholders. The shares with respect to which Awards may be made under the
        Plan
        may be either authorized and unissued shares or issued shares heretofore
        or
        hereafter reacquired and held as treasury shares. An Award shall not be
        considered to have been made under the Plan with respect to Restricted Stock
        which is forfeited and new Awards may be granted under the Plan with respect
        to
        the number of Shares as to which such forfeiture has occurred.

       

      9. Employee
        Rights Under the Plan.  No
        director, officer or employee shall have a right to be selected as a Participant
        nor, having been so selected, to be selected again as a 

       


      
        
          
          

        

        
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      Participant
        and no director, officer, employee or other person shall have any claim or
        right
        to be granted an Award under the Plan or under any other incentive or similar
        plan of the Corporation or any Affiliate. Neither the Plan nor any action
        taken
        thereunder shall be construed as giving any employee any right to be retained
        in
        the employ of the Corporation, the Bank or any Affiliate.

       

      10. Withholding
        Tax.  Upon
        the
        termination of the Restricted Period with respect to any shares of Restricted
        Stock (or at any such earlier time, if any, that an election is made by the
        Participant under Section 83(b) of the Code, or any successor provision thereto,
        to include the value of such shares in taxable income), the Corporation may
        withhold from any payment or distribution made under this Plan sufficient
        Shares
        or may withhold or cause to be paid by the Participant sufficient cash to
        cover
        any applicable withholding and employment taxes. The Corporation shall have
        the
        right to deduct from all dividends paid with respect to shares of Restricted
        Stock the amount of any taxes which the Corporation is required to withhold
        with
        respect to such dividend payments. No discretion or choice shall be conferred
        upon any Participant with respect to the form, timing or method of any such
        tax
        withholding.

       

      11. Amendment
        or Termination.  The
        Board
        of Directors of the Corporation may amend, suspend or terminate the Plan
        or any
        portion thereof at any time, subject to Office of Thrift Supervision
        Regulations, provided, however, that no such amendment, suspension or
        termination shall impair the rights of any Participant, without his consent,
        in
        any Award theretofore made pursuant to the Plan.

       

      12. Term
        of Plan.  The
        Plan
        shall become effective upon its ratification by stockholders of the Corporation,
        following completion of the Bank’s conversion to stock form. It shall continue
        in effect for a term of ten years unless sooner terminated under Section
        11
        hereof.

       

      13. Initial
        Grants.  By,
        and
        simultaneously with, the ratification of this Plan by the stockholders of
        the
        Corporation, each member of the Board of Directors of the Corporation and
        each
        Director Emeritus of the Bank at the time of stockholder ratification, who
        is
        not a full-time Employee, is hereby granted an Award equal to 1,544 shares.
        Each
        such Award shall be evidenced by a Restricted Stock Agreement in a form approved
        by the Committee administering such plan and shall be subject in all respects
        to
        the terms and conditions of this Plan, which are controlling. Each of the
        Awards
        granted in this Section 13, shall vest in five equal annual installments,
        with
        the first installment vesting on the one-year anniversary of the date of
        grant.
        Awards granted pursuant to this Section 13 are subject to the conditions
        of the
        Plan, including the requirement that the Director maintain Continuous Service
        with the Bank from the date of grant, provided
        that no
        Awards shall be earned in any fiscal year in which the Bank fails to meet
        all of
        its fully phased-in capital requirements.

       

       

       

       

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