EXEMPT LOAN AND SHARE PURCHASE AGREEMENT



                                     between




                                   TRUST UNDER
                                CITIZENS BANCORP
                 EXEMPT STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
                         (EFFECTIVE AS OF JULY 1, 1997)


                                       and


                                CITIZENS BANCORP

                            Dated September 12, 1997


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                                TABLE OF CONTENTS
                                                                           Page


ARTICLE I     DEFINITIONS AND INTERPRETATION.................................2

              Section 1.1           General Interpretation...................2
              Section 1.2           Certain Definitions......................2

ARTICLE II    TRUST LOAN; TRUST NOTE; PAYMENTS...............................2

              Section 2.1           Trust Loan...............................2
              Section 2.2           Use of Trust Loan Proceeds...............3
              Section 2.3           Trust Note...............................3
              Section 2.4.          Interest.................................3
              Section 2.5           Payments.................................3
              Section 2.6           Optional Prepayment......................4
              Section 2.7           Place and Time of Payment................4
              Section 2.8           Application of Certain Payments..........4
              Section 2.9           Due Date Extension.......................5
              Section 2.10          Computations.............................5
              Section 2.11          Interest on Overdue Amounts..............5

ARTICLE III   SECURITY.......................................................5

              Section 3.1           Security.................................5
              Section 3.2           Release of Shares........................5

ARTICLE IV    REPRESENTATIONS, WARRANTIES AND COVENANTS......................5

              Section 4.1           Representations and 
                                        Warranties of Trustee................5
              Section 4.2           Representations and 
                                        Warranties of Company................6
              Section 4.3           Covenants of Company.....................8

ARTICLE V     CONDITIONS PRECEDENT...........................................9

              Section 5.1           Documentation Satisfactory to Company....9
              Section 5.2           Other Conditions Precedent 
                                        to Company Obligations...............9
              Section 5.3           Documentation Satisfactory to Trustee....9
              Section 5.4           Other Conditions Precedent 
                                        to Trustee's Obligation..............9


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ARTICLE VI    EVENTS OF DEFAULT AND THEIR EFFECT.............................10

              Section 6.1           Events of Default; Effect................10

ARTICLE VII   SHARE PURCHASES................................................10

              Section 7.1           Purchase of Shares.......................10
              Section 7.2           Manner of Purchase.......................10
              Section 7.3           Readily Tradeable........................10
              Section 7.4           No Prohibited Transactions...............10
              Section 7.5           Maximum Number of Shares.................11

ARTICLE VIII  GENERAL........................................................11

              Section 8.1           Waivers; Amendments......................11
              Section 8.2           Confirmations; Information...............11
              Section 8.3           Captions.................................11
              Section 8.4           Governing Law............................11
              Section 8.5           Notices..................................11
              Section 8.6           Expenses.................................12
              Section 8.7           Reimbursement............................12
              Section 8.8           Entire Agreement.........................12
              Section 8.9           Severability.............................12
              Section 8.10          No Assignment............................12
              Section 8.11          Counterparts.............................12

ARTICLE IX    LIMITED RECOURSE...............................................12

              Section 9.1           Limited Recourse.........................12
              Section 9.2           No Personal Recourse Against Trustee.....13

Exhibit A TRUST NOTE
Exhibit B SHARE PLEDGE AGREEMENT
Exhibit C  CERTIFICATE OF TRUSTEE
Exhibit D CERTIFICATE OF THE COMPANY



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                    EXEMPT LOAN AND SHARE PURCHASE AGREEMENT


         THIS EXEMPT LOAN AND SHARE PURCHASE AGREEMENT (this "Agreement" or
"Loan  Agreement"),  dated  September 12, 1997,  between the Trust (the "Trust")
established  pursuant to the provisions of the CITIZENS  BANCORP  EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST  AGREEMENT  (EFFECTIVE AS OF JULY 1, 1997) (the "ESOP")
by THE FARMERS  BANK,  as Trustee  (the  "Trustee"),  and CITIZENS  BANCORP,  an
Indiana corporation (the "Company").

                              W I T N E S S E T H:

         WHEREAS,  the Company has duly  established the ESOP in connection with
which the Trust has been created;

         WHEREAS,  pursuant to the ESOP and direction of the Company pursuant to
Section 8.7 of the ESOP,  the Trust desires to borrow from the Company,  and the
Company desires to lend to the Trust, an aggregate  principal amount equal to up
to Eight Hundred Forty-Six  Thousand Four Hundred Dollars ($846,400) (the "Trust
Loan"),  representing the cost of 8% of the shares of Common Stock,  without par
value, of the Company (the "Common Stock"), offered in the Subscription Offering
and  the  Community  Offering  of the  Company's  Common  Stock  being  made  in
connection  with the  Company's  acquisition  of the  common  stock of  Citizens
Savings  Bank of  Frankfort  (the  "Bank")  upon  conversion  of the Bank from a
federal mutual savings bank to a federal stock savings bank (the  "Conversion"),
on the terms and conditions hereof;

         WHEREAS,  the parties  hereto intend that the Trust Loan  constitute an
"exempt  loan" within the meaning of Section  4975(d)(3)  of the Code,  Treasury
Regulation ss. 54.4975-7(b), Section 408(b)(3) of ERISA, and Department of Labor
Regulation  ss.  2550.408b-3  (collectively,  the  "Exempt  Loan  Rules") and an
"Exempt Loan" within the meaning of Sections 1.20 and 8.7 of the ESOP;

         WHEREAS,  the parties  intend that the Trustee  will  utilize the Trust
Loan for the purpose of  effecting  purchases in the  Subscription  Offering and
Community  Offering  (collectively,  the  "Offering")  or otherwise of shares of
Company Common Stock, without par value ("Shares"),  to be held in the Trust for
participants in the ESOP.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  and  agreements   herein   contained  and  other  good  and  valuable
consideration (the receipt,  adequacy and sufficiency of which each party hereto
respectively acknowledges by its execution hereof), the parties hereto intending
legally to be bound do hereby agree as follows:


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<PAGE>



                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

         Section 1.1. General Interpretation.  This Agreement shall be construed
and  interpreted  so as to  maintain  the  status  of the  ESOP  as a  qualified
leveraged  employee stock ownership plan under Sections 401(a) and 4975(e)(7) of
the Code,  the Trust as exempt from taxation  under Section  501(a) of the Code,
and the Trust Loan as an "exempt  loan" under the Exempt  Loan Rules,  and as an
"Exempt  Loan"  under  Section  8.7 of the  ESOP  (collectively,  the  "Required
Status").

         Section 1.2.  Certain  Definitions.  In this Agreement,  unless a clear
contrary  intention  appears,  the  terms  set forth  below  have the  following
meanings when used herein. Other terms are defined elsewhere herein.

         (a) "Business Day" means a day, other than a Saturday, Sunday or public
holiday,  on which  commercial  banks  are open in  Frankfort,  Indiana  for the
purpose of conducting commercial banking business.

         (b) "Code" means the Internal  Revenue  Code of 1986,  as amended,  and
regulations promulgated thereunder.

         (c)  "Default"  means an event or  circumstance  which,  with notice or
lapse of time or both,  would  constitute  an Event of  Default  as  defined  in
Section 6.1.

         (d) "ERISA" means the Employee  Retirement Income Security Act of 1974,
as amended, and regulations promulgated thereunder.

         (e) "Loan  Documents"  shall mean,  collectively,  this Agreement,  the
Trust Note,  the Share Pledge  Agreement and any other  instruments or documents
required to be delivered pursuant hereto or thereto, in each case as amended and
in effect from time to time.

                                   ARTICLE II

                        TRUST LOAN; TRUST NOTE; PAYMENTS

         Section 2.1.  Trust Loan.  Subject to the terms and  conditions of this
Agreement,  the Company agrees to make available to the Trust, and the Trust may
borrow from the Company,  on the Closing Date (hereinafter  defined),  the Trust
Loan under this  Agreement in an amount up to Eight Hundred  Forty-Six  Thousand
and Four Hundred Dollars  ($846,400),  representing the cost of 8% of the Shares
offered in the Offering.  The Company shall,  upon fulfillment of the applicable
conditions set forth in Article V, on the Closing Date make the Trust Loan up to
such amount  available to the Trustee in  immediately  available  funds,  at its
principal  office.  Notwithstanding  the  foregoing,  the  Company  shall not be
obligated to make any portion of the Trust Loan available to the Trust if the

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Conversion is not  consummated,  or if the ESOP is not permitted to purchase any
shares  because  of an  oversubscription  in  the  first  category  of  eligible
subscribers.  The  Closing of the Trust Loan (the  "Closing")  will occur at the
offices of Barnes & Thornburg,  1313 Merchants Bank Building,  11 South Meridian
Street,  Indianapolis,  Indiana  46204,  on the same  date  that the  Conversion
closes, or such later date as the parties shall agree upon (the "Closing Date").

         Section  2.2.  Use of  Trust  Loan  Proceeds.  The  Trust  will use the
proceeds of the Trust Loan to purchase  Shares in the  Offering,  in  accordance
with Article VII hereof.

         Section  2.3.  Trust  Note.  The Trust  Loan will be  represented  by a
promissory  note of the Trust (the "Trust Note"),  substantially  in the form of
Exhibit A hereto,  appropriately  completed,  dated the Closing Date, payable to
the order of the Company in the original  principal amount of the Trust Loan, or
so much thereof as may at any time have been advanced  hereunder and thereunder,
on the maturity date thereof.

         Section  2.4.  Interest.  The  portion  of  the  Trust  Loan  principal
outstanding at any time shall accrue and bear daily interest at a fixed rate per
annum equal to the prime rate as published  in "The Wall Street  Journal" on the
Closing Date (the "Interest Rate"),  payable annually in accordance with Section
2.5.  On any stated or  accelerated  maturity  of the Trust Loan all accrued and
unpaid interest thereon shall be forthwith due and payable.

         Section 2.5. Payments.  The Trust shall pay the principal amount of the
Trust Loan together with accrued interest as follows:

                  (a) an initial principal installment of one fortieth (1/40) of
         the  initial  principal  amount  of the  Trust  Loan,  shall be due and
         payable on December 31, 1997, together with all interest accrued on the
         Trust Loan from the Closing  Date  through and  including  December 31,
         1997; and

                  (b)  thereafter,  payments of principal and interest  shall be
         made in annual installments due and payable on the last business day of
         December of each year,  commencing  on December 31,  1998,  through and
         including December 31, 2006, which annual  installments shall include a
         principal  payment in the amount of one-tenth of the initial  principal
         amount of the Trust Loan,  plus all interest  accrued on the Trust Loan
         through and including the date of such payment; and

                  (c)  a  final   payment   of   principal   in  the  amount  of
         three-fortieths  (3/40) of the  initial  principal  amount of the Trust
         Loan,  together with all interest accrued on the Trust Loan through and
         including  the  date of  such  payment  shall  be due  and  payable  on
         September 30, 2007.


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The  outstanding  principal  of the Trust  Loan,  together  with all accrued and
unpaid interest and any other obligations then outstanding, will in any event be
due and payable in full on September 30, 2007.

         Section 2.6.  Optional Prepayment.

                  (a) Upon  compliance  with this Section 2.6, the Trust, at its
         option,  may  prepay  the Trust Note at any time and from time to time,
         either in whole or in part, by payment of the  principal  amount of the
         Trust  Note or  portion  thereof to be  prepaid  and  accrued  interest
         thereon to the date of such prepayment.

                  (b) The  Trustee  will give  notice of any  prepayment  of the
         Trust Note  pursuant to this Section 2.6 to the Company not less than 3
         days nor more than 60 days  before  the date  fixed  for such  optional
         prepayment specifying (i) such date, (ii) that prepayment is to be made
         under Section 2.6 of this Agreement,  (iii) the principal amount of the
         Trust  Note to be  prepaid  on such  date,  and (iv)  accrued  interest
         applicable to the prepayment. Such notice of prepayment shall be signed
         by the  Trustee.  Notice  of  prepayment  having  been  so  given,  the
         aggregate  principal amount of the Trust Note specified in such notice,
         together with accrued  interest thereon shall become due and payable on
         the prepayment date.

                  (c)  Partial  prepayments  of the Trust Note made  pursuant to
         this  Section  2.6 shall be  credited  in each case  against  remaining
         scheduled  payments on the Trust Note in the  inverse  order of the due
         dates of such payments.

                  (d) No such prepayment  shall,  however,  be permitted if such
         prepayment would adversely affect the Required Status.

         Section 2.7.  Place and Time of Payment.  All payments of principal of,
or interest on, the Trust Note shall be made by the Trust to the Company in same
day funds at  Frankfort,  Indiana,  not later than  11:00 a.m.  on the date due.
Funds received after that hour shall be deemed to have been received on the next
following Business Day.

         Section 2.8.  Application of Certain  Payments.  If, and to the extent,
Shares  acquired with proceeds of the Trust Loan,  held in the Trust and not yet
allocated to participant accounts are sold, then, to the extent allowable by the
Exempt Loan Rules and applicable law, the Trustee,  at the direction of the ESOP
Committee  administering  the ESOP (the  "Committee"),  may  apply the  proceeds
thereof  toward  the  repayment  of the  Trust  Loan.  Dividends  or other  cash
distributions  paid on the Shares  purchased with the proceeds of the Trust Loan
(whether or not allocated to the accounts of Participants)  shall be used by the
Trustee, at the discretion of the Committee,  to the extent permissible to repay
the Trust Loan in accordance with the provisions of Section 4.5 of the ESOP.


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         Section 2.9.  Due Date  Extension.  If any payment of principal  of, or
interest on, the Trust Note falls due on a day that is not a Business  Day, then
such due  date  shall  be  extended  to the next  following  Business  Day,  and
additional  interest  shall  accrue  and be  payable  for  the  period  of  such
extension.

         Section 2.10.  Computations.  All computations of interest on the Trust
Loan and  other  amounts  due  hereunder  shall be based on a year of 360  days,
comprising twelve 30-day months.

         Section 2.11.  Interest on Overdue Amounts. If any payment of principal
of, or interest on, the Trust Note is not made when due,  interest  shall accrue
on the amount  thereof,  commencing  on such due date  through the date on which
such amount is paid in full, at a rate per annum equal to the Interest Rate plus
two percent (2%).

                                   ARTICLE III

                                    SECURITY

         Section 3.1. Security. Payment of the Trust Note and performance by the
Trust of its obligations under this Agreement and the Trust Note will be secured
by a pledge  of,  and the grant of a  security  interest  in,  the Shares by the
Trustee  on  behalf of the  Trust to and in favor of the  Company  under a Share
Pledge  Agreement,  substantially  in the form of Exhibit B hereto  (the  "Share
Pledge Agreement").

         Section 3.2. Release of Shares.  Notwithstanding  any provision of this
Agreement  or the Share Pledge  Agreement to the contrary  contained or implied,
the Company will release from the pledge and security  interest  under the Share
Pledge Agreement,  such Shares as must be allocated to ESOP  participants  under
the ESOP pursuant to Section  8.7(h) of the ESOP and  otherwise  under the Code,
the Exempt Loan Rules or other  applicable law,  provided that Section 8.7(h) of
the ESOP shall not be amended without the Trustee's prior consent.

                                   ARTICLE IV

                           REPRESENTATIONS, WARRANTIES
                                  AND COVENANTS

         Section 4.1.  Representations  and Warranties of Trustee. To induce the
Company  to  enter  this  Agreement  and to make the  Trust  Loan,  the  Trustee
represents and warrants to the Company as follows:

                  (a)  The  Trustee  has  determined  that  the  Trust  Loan  is
         primarily for the benefit of ESOP participants and their  beneficiaries
         and bears  interest  at a rate not in excess of a  reasonable  rate and
         that the terms of the loan are at least as  favorable  to the Trust and
         the

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         ESOP  participants  as the terms of a comparable  loan  resulting  from
         arm's-length negotiations between completely independent parties;

                  (b)  The  Trustee  is a  bank,  legally  existing  and in good
         standing  under Indiana law, has  corporate  power and authority and is
         duly authorized to enter into and perform the Trust;

                  (c) The  Trustee  has  full  right,  power  and  authority  to
         execute,  deliver  and  perform on behalf of the Trust  under the Trust
         Agreement, the ESOP and otherwise the obligations set forth in the Loan
         Documents,  and the execution and performance of such  obligations will
         not conflict with or result in a breach of the terms of the ESOP or the
         Trust or result in a breach or violation of the  Trustee's  Articles of
         Incorporation  or By-Laws  or of any law or  regulation,  order,  writ,
         injunction or decree of any court or governmental  authority binding on
         the Trust or Trustee;

                  (d) The ESOP (and related  Trust) has been duly  authorized by
         all necessary  corporate action on the part of the Trustee, if any, has
         been  duly  executed  by an  authorized  officer  of  the  Trustee  and
         delivered and constitutes a legal,  valid and binding obligation of the
         Trustee and  declaration of trust  enforceable  in accordance  with its
         terms;

                  (e) The Loan Documents have been duly authorized, executed and
         delivered  by the  Trustee  and  constitute  legal,  valid and  binding
         obligations,  contracts and  agreements of the Trustee on behalf of the
         Trust, enforceable in accordance with their respective terms;

                  (f)  The  execution,  delivery  and  performance  of the  Loan
         Documents do not conflict with, or result in the creation or imposition
         of any lien or  encumbrance  upon any of the  property  of the  Trustee
         (other than the Collateral,  as defined in the Share Pledge  Agreement)
         pursuant to the provisions of the ESOP (and related Trust) or any other
         agreement or other instrument to which the Trustee is a party or may be
         bound; and

                  (g) No approval,  consent or  withholding  of objection on the
         part  of,  or  filing,   registration   or   qualification   with,  any
         governmental body, Federal,  state or local, is necessary in connection
         with the execution, delivery and performance by the Trustee of the Loan
         Documents.

         Section 4.2.  Representations  and Warranties of Company. To induce the
Trust to enter this  Agreement  and  undertake the  obligations  hereunder,  the
Company represents and warrants to the Trust as follows:

                  (a) The Company is a  corporation  duly  organized and validly
         existing  under the laws of the State of Indiana,  has corporate  power
         and  authority  and is duly  authorized  to enter into and  perform its
         obligations under this Agreement;


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                  (b) Neither the execution and delivery of this Agreement,  nor
         the performance of the terms hereof nor the  establishment  of the ESOP
         or the Trust  violates,  conflicts  with or constitutes a default under
         Company's   Articles  of  Incorporation  or  By-Laws  or  any  material
         agreement  to which the  Company is a party or by which the  Company or
         any of its assets is bound, or violates any law,  regulation,  order or
         decree of any court,  arbitration or governmental  authority applicable
         to the Company, in any manner that would have a material adverse effect
         on the Trust, the ESOP, the Required Status or the Company;

                  (c) The Company  and the Bank have taken all actions  required
         to be taken by it to establish the ESOP and the related Trust. The ESOP
         and related  Trust are  intended  to, and the terms  thereof  have been
         drafted with the purpose to, comply with the  requirements  of Sections
         401(a) and 501(a) of the Code, as applicable, with the requirements for
         treatment as a leveraged employee stock ownership plan, as that term is
         defined in Section  4975(e)(7) of the Code,  and with other  applicable
         laws;

                  (d) The Bank has duly  appointed the Trustee as trustee of the
         Trust and the Committee under the ESOP;

                  (e)  The  Company  has  delivered  to  Trustee  copies  of its
         Articles of Incorporation and its By-Laws, the ESOP, and resolutions of
         its Board of Directors  with respect to approval of this  Agreement and
         entering  into  of the  transactions  and  execution  of all  documents
         contemplated by this Agreement, in each case certified by the Secretary
         of the Company,  which copies are true,  correct and complete.  None of
         such  documents  or  resolutions  has been  amended or  modified in any
         respect and such documents and resolutions  remain in full force and in
         effect, in the form previously delivered to the Trustee;

                  (f) Other  than the Common  Stock,  the  Company  has no other
         classes of shares outstanding or treasury shares.

                  (g) The  Company's  ability  to honor  put  options  (the "Put
         Options"),  which would  obligate the Company to  repurchase  shares of
         Common Stock  distributed  from time to time to ESOP  participants  and
         beneficiaries  under  Section  6.13  of  the  ESOP,  is  not  presently
         restricted  by the  provisions of any law, rule or regulation in effect
         on  the  date  hereof   (except  for  capital,   liquidation   account,
         requirements to obtain regulatory approval of repurchase  transactions,
         and similar  constraints  imposed by regulatory  authorities on savings
         associations) or by the terms of any loan, financing or other agreement
         or  instrument  to which the Company is a party or by which the Company
         is or may be bound.

                  (h)  There  are no  actions,  proceedings,  or  investigations
         pending or, to the Company's knowledge, threatened against or affecting
         the  Company  or any of its  property  or rights at law or in equity or
         before or by any court or tribunal that have not been  disclosed to the
         Trustee  and may have a  material  adverse  effect  on the value of the
         Common Stock.


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<PAGE>



                  (i) All  employee  plans of the Bank  and the  Company  are in
         compliance,  in all material respects,  with all applicable  reporting,
         disclosure and filing requirements pertaining to employee benefit plans
         set forth in the Code and ERISA.

                  (j) No consent,  approval or other  authorization or notice to
         any  governmental  authority or  expiration  of any  government-imposed
         waiting period is required in connection with the execution or delivery
         of this Agreement, except such as has been obtained, given or expired.

                  (k) The shares of Common Stock constitute "qualifying employer
         securities" within the meaning of Section 409(l) of the Code.

         Section 4.3.  Covenants of Company.  The Company covenants that:

                  (a) The Company  shall  submit or cause to be submitted to the
         Internal  Revenue Service within ninety (90) days following the Closing
         Date an application  for a  determination  letter  confirming  that the
         ESOP, effective as of July 1, 1997, and the related Trust are qualified
         and  exempt   from   taxation   under   Sections   401(a)  and  501(a),
         respectively,  of the Code and that the ESOP meets the  requirements of
         Section 4975(e)(7) of the Code.

                  (b) The Company and the Bank shall make all changes reasonably
         requested by the Internal Revenue Service as a condition of obtaining a
         determination  letter from the Internal Revenue Service with respect to
         the ESOP,  effective  July 1,  1997.  The  Company  and the Bank  shall
         continue to do all things  necessary to cause the ESOP and the Trust at
         all times to be operated  and  administered  such that the ESOP remains
         qualified  under Section 401(a) and remains an employee stock ownership
         plan  under  Section  4975(e)(7)  of the  Code  and the  Trust  remains
         tax-exempt under Section 501(a) of the Code.

                  (c) If at any time the ESOP is required,  by  applicable  law,
         court  order,  or  otherwise,  to make  distributions  of  Shares  that
         otherwise  would be in violation of Federal or state  securities  laws,
         the Company  shall take all actions  necessary to permit such  required
         distributions to be made in full compliance with such laws.

                  (d) The  Company  shall  honor the Put  Options if, and to the
         extent,  required  by  Section  409(h)  of  the  Code  and  regulations
         thereunder,  and shall not permit its ability to honor such  Options to
         be materially restricted in any way.

                  (e) The  Company or the Bank shall  provide to the Trustee all
         governmental  filings  relating  to the ESOP  and all  ESOP  amendments
         within  sixty days of the date on which  such  filing or  amendment  is
         effected,  and, on an annual basis,  shall provide  complete  financial
         statements of the ESOP and the Company.


                                                        -8-

<PAGE>



                                    ARTICLE V

                              CONDITIONS PRECEDENT

         Section 5.1.  Documentation  Satisfactory to Company. The obligation of
the Company to make the Trust Loan is, in addition to the  conditions  precedent
contained in Section 5.2,  subject to the condition  precedent  that the Company
shall have  received  each of the  following,  duly executed and dated as of the
Closing Date (or such earlier date as shall be  satisfactory to the Company) and
in form and substance satisfactory to the Company:

                  (a)      the Trust Note;

                  (b)      the Share Pledge Agreement; and

                  (c) a certificate of the Trustee, substantially in the form of
         Exhibit C hereto,  with such changes  thereto as shall be acceptable to
         the Company and its counsel,  and with respect to such other matters as
         the Company may reasonably request.

         Section 5.2.  Other  Conditions  Precedent to Company  Obligations.  In
addition to the condition  precedent contained in Section 5.1, the obligation of
the  Company to make the Trust  Loan  available  is  subject  to the  conditions
precedent that (i) the Conversion is consummated,  (ii) the  representations and
warranties  made by the Trustee herein shall be true and correct in all material
respects on the Closing Date as if made on and as of the Closing Date; and (iii)
the ESOP shall be permitted to purchase Shares in the Conversion.

         Section 5.3.  Documentation  Satisfactory to Trustee. The obligation of
the Trust to enter into the Trust Loan is  subject  to the  condition  precedent
that the Trustee shall have received  each of the  following,  duly executed and
dated as of the Closing Date (or such earlier date as shall be  satisfactory  to
Trustee) and in form and substance satisfactory to Trustee:

                  (a)  The Share Pledge Agreement; and

                  (b) A certificate of the Company, substantially in the form of
         Exhibit D hereto,  with such changes  thereto as shall be acceptable to
         the Trustee and its counsel,  and with respect to such other matters as
         the Trustee may reasonably request.

         Section 5.4. Other Conditions  Precedent to Trustee's  Obligation.  The
obligation  of the  Trustee  to enter  into the  Trust  Loan is  subject  to the
conditions   precedent  that  (i)  the  Conversion  is  consummated,   (ii)  the
representations  and  warranties  made by the Company  herein  shall be true and
correct in all material respects on the Closing Date as if made on and as of the
Closing Date, and (iii) no injunction or restraining order shall be in effect or
litigation  pending or  threatened to forbid or enjoin the  consummation  of the
transaction contemplated by this Agreement.


                                                        -9-

<PAGE>



                                   ARTICLE VI

                       EVENTS OF DEFAULT AND THEIR EFFECT

         Section 6.1. Events of Default;  Effect. If default in the payment when
due of any principal of, or default (and continuance  thereof for 5 days) in the
payment when due of interest on, the Trust Note (an "Event of Default")  occurs,
unless the effect  thereof as an Event of Default  has been waived in writing by
the Company,  then the Company may declare the Trust Note to be due and payable,
whereupon  the Trust Note shall  become  immediately  due and  payable,  without
presentment,  demand,  protest  or notice  to the  Trust or other  action by the
Company of any kind whatsoever,  all of which actions the Trust hereby waives to
the maximum extent permitted by law. The Company shall promptly advise the Trust
of any  declaration of default,  but failure to do so or delay in doing so shall
not impair  the  effect of such  declaration.  Notwithstanding  anything  to the
contrary herein or in the Trust Note or the Share Pledge Agreement  contained or
implied,  if a Default or Event of Default occurs with respect to the Trust Loan
by the Trust,  the value of Trust assets  transferred  in  satisfaction  thereof
shall not exceed the amount of such  default.  In  addition,  such a transfer of
such Trust  assets shall only occur upon and to the extent of the failure of the
Trust to meet the payment schedule of the Trust Loan provided in Article II.

                                   ARTICLE VII

                                 SHARE PURCHASES

         Section 7.1.  Purchase of Shares.  The Company is making the Trust Loan
available  to the Trustee  for the  purpose of allowing  the Trustee to purchase
Shares in the Conversion.  To the extent the ESOP is permitted to purchase up to
84,640 Shares in the  Conversion,  the Trustee agrees to use all of the proceeds
of the Trust Loan to purchase Shares in accordance with this Article VII.

         Section 7.2. Manner of Purchase.  The Trustee shall timely subscribe to
purchase the Shares the ESOP is permitted to purchase in the Conversion pursuant
to the Bank's Plan of Conversion. The Trustee shall draw upon the Trust Loan and
use the proceeds  thereof to purchase the number of Shares the ESOP may purchase
in the Offering, simultaneously with consummation of the Conversion.

         Section 7.3.  Readily  Tradeable.  The Company agrees to use reasonable
efforts  to cause the  Shares to be,  and to  maintain  the  Shares'  status as,
"readily  tradeable on an established  securities  market" within the meaning of
Section 409(l)(1) of the Code.

         Section 7.4. No Prohibited Transactions. The Trustee in the performance
of its obligations under this Agreement, shall observe its fiduciary obligations
under Section 404 of ERISA,  shall not engage in any  transaction  prohibited by
ERISA or contrary to such fiduciary obligations, and, in acquiring Shares, shall
not  (and  shall  not  be  deemed   obligated   to)  pay  more  than   "adequate
consideration," as defined in Section 3(18) of ERISA.

                                                       -10-

<PAGE>



         Section  7.5.  Maximum  Number of Shares.  The Trust shall not purchase
Shares with proceeds of the Trust Loan in excess of 8% of the outstanding Shares
of the Company at the time of purchase.

                                  ARTICLE VIII

                                     GENERAL

         Section 8.1. Waivers;  Amendments. No delay on the part of the Company,
or the holder of the Trust Note in the  exercise  of any right,  power or remedy
shall operate as a waiver thereof,  nor shall any single or partial  exercise by
any of them of any right,  power or remedy  preclude  other or further  exercise
thereof,  or the exercise of any other  right,  power or remedy.  No  amendment,
modification  or waiver of, or consent  with  respect to, any  provision of this
Agreement,  the Trust Note or the Share Pledge  Agreement  shall in any event be
effective  unless the same shall be in writing and signed and  delivered  by the
Company and then any such  amendment,  modification,  waiver or consent shall be
effective only in the specific  instance and for the specific  purpose for which
given.

         Section 8.2. Confirmations;  Information. The Company and the Trust (or
holder of the Trust Note) agree from time to time, upon written request received
by it from the other,  to confirm to the other in writing the  aggregate  unpaid
principal  balance then outstanding  under the Trust Note and such other matters
relating to the Trust Loan, the Trust, the ESOP or the purchase of Shares as may
reasonably be the subject of inquiry.

         Section 8.3. Captions.  Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.

         Section 8.4.  Governing Law. To the extent not preempted by ERISA, this
Agreement  and the Trust Note shall be a contract made under and governed by the
laws of the State of Indiana, without regard to conflict of laws principles. All
obligations of the Trust and rights of the Company and other holder of the Trust
Note  expressed  herein or in such Trust Note shall be in addition to and not in
limitation of those provided by law.

         Section 8.5. Notices. All communications and notices hereunder shall be
in writing and shall be deemed to be given when sent by  registered or certified
mail,  postage  prepaid,  return  receipt  requested,  or  by  telecopier,  duly
confirmed, and addressed to such party at the address indicated below or to such
other  address as such party may  designate in writing  pursuant to this Section
8.5.

                                Citizens Bancorp
                              60 South Main Street
                            Frankfort, Indiana 46041
                      Attention: Fred W. Carter, President



                                                       -11-

<PAGE>



                                The Farmers Bank
                                 9 East Clinton
                          Frankfort, Indiana 46041-0129

         Section 8.6. Expenses. All expenses of the transaction  contemplated by
this Agreement shall be paid by the Company.

         Section 8.7. Reimbursement. If the Trustee uses proceeds from the Trust
Loan to purchase  Common Stock directly from the Company and it is  subsequently
determined by a court of competent  jurisdiction that the Trustee paid in excess
of "adequate  consideration"  within the meaning of ERISA for such  shares,  the
Company  shall,  as soon as practicable  following such judgment,  reimburse the
Trustee for the amount of the excess payment.

         Section 8.8. Entire  Agreement.  This Agreement  constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings between the parties.

         Section 8.9. Severability. Should any clause, paragraph or part of this
Agreement  be held or declared  to be void or illegal for any reason,  all other
clauses,  paragraphs or parts of this  Agreement  which can be affected  without
such illegal clause,  paragraph or part shall nevertheless  remain in full force
and effect.

         Section 8.10. No Assignment.  This Agreement and the obligations of the
parties herein may not be assigned or assumed by any other parties.

         Section 8.11.  Counterparts.  This  Agreement may be executed in two or
more counterparts,  each of which shall be deemed an original,  but all of which
put together shall constitute one and the same instrument.

                                   ARTICLE IX

                                LIMITED RECOURSE

         Section 9.1. Limited Recourse. Notwithstanding anything to the contrary
herein or in the Trust Note, the Share Pledge Agreement or any other instrument,
agreement or document  contained or implied,  the obligations of the Trust under
this Agreement, the Trust Note and the Share Pledge Agreement (collectively, the
"Trust Loan  Obligations")  shall be enforceable to the extent  permitted  under
law,  including  (without  limitation)  the Exempt Loan Rules,  only against the
Trust to the extent of the Collateral (as defined in the Share Pledge Agreement)
not theretofore  released from the pledge and security  interest under the Share
Pledge Agreement as provided in Section 3.2 and contributions and other payments
(other  than  contributions  of  employer  securities)  made  to  the  Trust  in
accordance  with the ESOP to enable the Trust to pay and  satisfy the Trust Loan
Obligations and from earnings  attributable  to the Shares  purchased with Trust
Loan proceeds and the investment of such

                                                       -12-

<PAGE>



contributions  and  payments  (collectively,  the "Trust Loan  Collateral").  No
recourse  shall be had to or against the Trust or the assets thereof (other than
the Trust Loan Collateral) for any deficiency judgment against the Trust for the
purpose  of  obtaining   payment  or  other   satisfaction  of  the  Trust  Loan
Obligations.

         Section 9.2. No Personal Recourse Against Trustee. Without limiting the
provisions  of Section  9.1,  the  Trustee of the Trust  shall have no  personal
liability for any of the Trust Loan Obligations.

         IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly
executed  and  delivered  by their  respective  representatives  thereunto  duly
authorized as of the date first above written.

                          TRUST UNDER CITIZENS BANCORP
                          EMPLOYEE STOCK OWNERSHIP PLAN
                          AND TRUST AGREEMENT

                          By: The Farmers Bank, Trustee


                                            By:


                                            Printed:

                                            Its:


                                            CITIZENS BANCORP


                                            By:

                                            Printed:           Fred W. Carter

                                            Its:     President



                                                       -13-

<PAGE>








                                                                       Exhibit A

                                   TRUST NOTE


$___________                                                 September ___, 1997
                                                         Due: September 30, 2007

         FOR  VALUE  RECEIVED,   the   undersigned,   the  Trust  (the  "Trust")
established  pursuant to the provisions of the CITIZENS  BANCORP  EMPLOYEE STOCK
OWNERSHIP PLAN AND TRUST AGREEMENT,  DATED AND EFFECTIVE AS OF JULY 1, 1997 (the
"Plan") by THE FARMERS BANK, as Trustee (the "Trustee"),  promises to pay to the
order of CITIZENS BANCORP, an Indiana corporation (together with its successors,
endorsees and assigns, the "Company"), at such place and in such other manner as
the Company may direct in writing,  and when required pursuant to the provisions
of that certain Exempt Loan and Share Purchase  Agreement,  dated September ___,
1997 (the "Loan  Agreement"),  by and among the  Trustee  and the  Company,  the
principal  amount of  ____________________________  Dollars  ($__________) or so
much thereof as may be advanced by the Company to the Trust  hereunder and under
the Loan  Agreement,  said amount  being due and payable  together  with accrued
interest  in such  installments  and at  such  times  as  provided  in the  Loan
Agreement, with the entire unpaid principal balance due and payable with accrued
interest in full on September 30, 2007, as provided in the Loan Agreement.

         The principal  balance hereof from time to time outstanding  shall bear
interest from the date of each  disbursement of the Trust Loan evidenced by this
Trust Note through and including the date on which such principal amount is paid
in full, at the times provided in the Loan  Agreement,  at the Interest Rate, as
defined in the Loan Agreement which is _____________  percent (_____%) per annum
(or, in the case of overdue  principal and, to the extent  legally  enforceable,
overdue interest, at the Interest Rate plus two percent (2%) per annum).

         This Trust  Note has been  issued by the Trust in  accordance  with the
terms of the Loan  Agreement  to evidence  the Trust Loan made by the Company to
the Trust under the Loan  Agreement,  to which  reference is hereby made for the
statement of the terms thereof.  This Trust Note and the Company are entitled to
the benefits of the Loan Agreement and the Company may enforce the agreements of
the Trust  contained  therein and in the Loan  Documents,  and may  exercise the
respective  remedies  provided  for thereby or  otherwise  available  in respect
thereof,  all in accordance with the respective  terms thereof.  All capitalized
terms used in this Trust Note which are not  otherwise  defined  herein have the
respective meanings assigned to them in the Loan Agreement.

         The Trust has the right to prepay  the  principal  amount of this Trust
Note  without  penalty  on the  terms  and  conditions  specified  in  the  Loan
Agreement.

                                                        -1-

<PAGE>



         If any Event of Default shall occur, the entire unpaid principal amount
of this Trust Note and all of the accrued but unpaid interest thereon may become
or be due and  payable in the manner  and with the effect  provided  in the Loan
Agreement.  The collection and enforcement of this Trust Note are subject to the
provisions and limitations of Section 9.1 of the Loan Agreement.

         To the  extent  not  preempted  by  ERISA,  this  Trust  Note  and  the
obligations of the Trust hereunder shall be governed by the laws of the State of
Indiana without regard to principles of conflict of laws.

         All  parties to this Trust  Note,  including  endorsers,  sureties  and
guarantors,  if any, hereby waive presentment,  demand, protest,  notice, relief
from valuation and  appraisement  laws and any and all other notices and demands
in connection with the delivery, acceptance, performance and enforcement of this
Trust  Note and also  hereby  assent to  extensions  of the time of  payment  or
forbearance or other indulgences without notice, and agree to remain bound until
the principal,  premium, if any, and interest are paid in full,  notwithstanding
any extensions of time for payment which may be granted,  even though the period
or periods of extension may be indefinite,  and notwithstanding any inaction by,
or  failure to assert any legal  rights  available  to, the holder of this Trust
Note.

         IN WITNESS WHEREOF, the Trust has caused this instrument to be executed
by the Trustee, the day and year first above written.

                                                  TRUST UNDER CITIZENS BANCORP
                                                  EMPLOYEE STOCK OWNERSHIP PLAN
                                                  AND TRUST AGREEMENT

                                                  By: The Famers Bank, Trustee


                                                  By:



                                                        -2-

<PAGE>



                                                                       Exhibit B





                             SHARE PLEDGE AGREEMENT






                                     between



                                   TRUST UNDER
                                CITIZENS BANCORP
                    STOCK OWNERSHIP PLAN AND TRUST AGREEMENT
                         (EFFECTIVE AS OF JULY 1, 1997)

                                       and

                                CITIZENS BANCORP

                           Dated: September ___, 1997

                                                        -1-

<PAGE>



                             SHARE PLEDGE AGREEMENT

         THIS  SHARE  PLEDGE  AGREEMENT  (this   "Agreement"  or  "Share  Pledge
Agreement"),  dated as of September ___,  1997,  between the Trust (the "Trust")
established  pursuant to the  provisions  of  CITIZENS  BANCORP  EMPLOYEE  STOCK
OWNERSHIP PLAN AND TRUST  AGREEMENT  (EFFECTIVE AS OF JULY 1, 1997) (the "Plan")
by THE FARMERS BANK, as Trustee  ("Trustee"),  and CITIZENS BANCORP,  an Indiana
corporation (the "Company").


                                   WITNESSETH:

         WHEREAS,  contemporaneously  herewith,  the Trust and the Company  have
entered into that certain  Exempt Loan and Share  Purchase  Agreement (the "Loan
Agreement";  definitions  of terms  appearing  in which  have the same  meanings
herein, unless a clear contrary intention appears),  dated September ____, 1997,
pursuant to which the Company has agreed to lend to the Trust, and the Trust has
agreed to borrow from the Company,  the Trust Loan,  and the Trust,  to evidence
its indebtedness to the Company with respect to the Trust Loan, has executed and
delivered the Trust Note to the Company; and

         WHEREAS,  it is a condition  precedent to the obligation of the Company
to make the Trust Loan that,  among other things,  the Trust execute and deliver
this Agreement to the Company,

         NOW,  THEREFORE,  in  consideration of the Loan Agreement and the Trust
Loan and other  good and  valuable  consideration  (the  receipt,  adequacy  and
sufficiency of which the Trust  acknowledges by its execution hereof,  the Trust
intending to be legally bound does hereby covenant and agree with the Company as
follows:

         Section  1.  Pledge.  To  secure  the  due  and  punctual  payment  and
performance  of the  obligations  of the  Trust  hereunder  and  under  the Loan
Agreement and the Trust Note (collectively,  the "Liabilities"),  the Trustee on
behalf of the Trust hereby pledges, hypothecates,  assigns, transfers, sets over
and delivers unto the Company,  its  successors and assigns and hereby grants to
the Company, its successors and assigns a security interest in:

                  (a) All  Shares of Company  Common  Stock  purchased  or to be
         purchased  with the  proceeds  of the  Trust  Loan  (collectively,  the
         "Pledged  Shares") and the certificates  representing or evidencing the
         Pledged Shares,  and, to the extent permitted by Section  4975(e)(7) of
         the  Internal   Revenue  Code  of  1986,  as  amended,   and  Reg.  ss.
         54.4975-7(b)(5) promulgated thereunder, all cash, securities, interest,
         dividends,  rights and other property at any time and from time to time
         received  in respect of or in  exchange  for any or all of the  Pledged
         Shares; and

                  (b)    all proceeds of all of the foregoing


                                                        -2-

<PAGE>



(all such Pledged Shares, certificates,  cash, securities,  interest, dividends,
rights and other property, and proceeds thereof, other than as released, sold or
otherwise  applied by the Company  pursuant to the' terms  hereof,  being herein
collectively  called  the  "Collateral"),  TO HAVE AND TO HOLD such  Collateral,
together  with  all  rights,  titles,  interests,   privileges  and  preferences
appertaining or incidental  thereto,  forever,  subject,  however, to the terms,
covenants and conditions hereafter set forth.

         Section 2. Warranties and Covenants.

                  (a) The Trust  represents and warrants to the Company that the
         Trust is, or at the time of any future delivery,  pledge, assignment or
         transfer  will be,  the  lawful  owner of the  Collateral,  free of all
         claims and liens other than the security interest hereunder,  with full
         right to deliver,  pledge,  assign and transfer the  Collateral  to the
         Company as Collateral hereunder.

                  (b) So long as any of the Liabilities remain outstanding,  the
         Trust will, unless the Company shall otherwise consent in writing:

                           (i) promptly deliver to the Company from time to time
                  certificates   representing  Pledged  Shares  as  the  Trustee
                  acquires  them and,  upon request of the  Company,  such stock
                  powers and other documents, satisfactory in form and substance
                  to the Company,  with respect to the Collateral as the Company
                  may reasonably request to preserve and protect,  and to enable
                  the Company to enforce, its rights and remedies hereunder;

                           (ii) not create or suffer to exist any lien, security
                  interest or other charge or  encumbrance  against,  in or with
                  respect  to  any of  the  Collateral  except  for  the  pledge
                  hereunder and the security interest created hereby;

                           (iii) not make or consent to any  amendment  or other
                  modification  or waiver with respect to any of the  Collateral
                  or enter into any agreement or permit to exist any restriction
                  with  respect to any of the  Collateral  other  than  pursuant
                  hereto; and

                           (iv) not take or fail to take any action  which would
                  in any  manner  impair  the  value  or  enforceability  of the
                  Company's security interest in any of the Collateral.

         Section  3. Care of  Collateral.  The  Company  shall be deemed to have
exercised  reasonable  care with  respect  to the  interest  of the Trust in the
custody  and  preservation  of the  Collateral  if it takes such action for that
purpose as the Trust  shall  request  in writing or as it would with  respect to
similar  assets of its own,  but  failure of the Company to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care.


                                                        -3-

<PAGE>



         Section 4. Certain Rights Regarding Collateral and Liabilities.

         (a) The Company may from time to time,  whether  before or after any of
the  Liabilities  shall become due and payable,  without notice to the Trust, to
the extent otherwise  permitted (i) retain or obtain a security  interest in the
Collateral,  to secure payment and performance of any of the  Liabilities,  (ii)
retain or obtain the primary or secondary  liability of any party or parties, in
addition to the Trust,  with respect to any of the Liabilities,  (iii) extend or
renew for any  period  (whether  or not  longer  than the  original  period)  or
exchange any of the  Liabilities  or release or compromise any obligation of any
nature of any  party  with  respect  thereto,  and (iv)  surrender,  release  or
exchange  all or any  part  of any  property,  in  addition  to the  Collateral,
securing  payment and  performance of any of the  Liabilities,  or compromise or
extend or renew for any period (whether or not longer than the original  period)
any obligations of any nature of any party with respect to any such property.

         (b) The Company shall have no right to vote the Pledged Shares prior to
the  occurrence  of an Event of  Default  (hereinafter  in Section  6(a)  hereof
defined).  After the occurrence of an Event of Default, the Trust shall have the
right to vote any and all of the  Pledged  Shares  in  accordance  with the Plan
unless and until it receives  notice  from the Company  that such right has been
terminated  with  respect  to shares  subject  to  execution  as a result of the
Default.

         Section 5. Dividends, etc.

         (a) So long as no Default or Event of Default,  shall have occurred and
be continuing, the Trust shall be entitled to receive any and all cash dividends
on the Pledged Shares which it is otherwise entitled to receive, and to vote the
Pledged  Shares in accordance  with the terms of the Plan and to give  consents,
waivers  and  ratifications  in respect of the Pledged  Shares,  but any and all
stock  and/or  liquidating  dividends,  distributions  in  property,  returns of
capital or other  distributions  made on or in respect  of the  Pledged  Shares,
whether  resulting from a subdivision,  combination or  reclassification  of the
outstanding  capital stock of any issuer thereof or received in exchange for the
Pledged Shares or any part thereof or as a result of any merger,  consolidation,
acquisition  or other  exchange  of assets to which any issuer may be a party or
otherwise,  and any and all cash and other property received in exchange for any
Collateral shall be, and become part of the Collateral pledged hereunder and, if
received  by the Trust,  shall  forthwith  be  delivered  to the  Company or its
designated  nominee  (accompanied,  if  appropriate,  by proper  instruments  of
assignment  and/or stock  powers  executed by the Trust in  accordance  with the
Company's  instructions)  to be held subject to the terms of this  Agreement and
the Plan.

         (b) Upon the  occurrence  and  during  the  continuance  of an Event of
Default,  subject to the terms of Section 4(b)  hereof,  all rights of the Trust
pursuant to Section 5(a) hereof shall cease and the Company  shall have the sole
and exclusive  right and authority to receive and retain the dividends which the
Trust would  otherwise be authorized  to retain and, to the extent  permitted by
law, to vote and give consents,  waivers and  ratifications  pursuant to Section
5(a) hereof.  Any and all money and other  property  paid over to or received by
the Company pursuant to the provisions of this paragraph

                                                        -4-

<PAGE>



(b) shall be retained by the Company as additional  Collateral  hereunder and be
applied in accordance with the provisions hereof.

           Section 6. Event of Default.

           (a) The occurrence of any of the following shall  constitute an Event
of Default hereunder nonpayment, when due, whether by acceleration or otherwise,
of any amount payable on any of the Liabilities;  an Event of Default as defined
in the Loan  Agreement;  any  representation  or warranty of the Trust contained
herein or given  pursuant  hereto being untrue in any material  respect;  or the
Trust's failure to perform any covenant or agreement contained herein.

           (b) Upon the  occurrence of an Event of Default,  (i) the Company may
exercise  from time to time any rights and  remedies  available  to it under the
Uniform  Commercial  Code as in effect from time to time in Indiana or otherwise
available  to it,  including,  but not limited to,  sale,  assignment,  or other
disposal of the  Pledged  Shares in  exchange  for cash or credit,  and (ii) the
Company  may,  without  demand or notice of any kind,  but subject to Section 7,
appropriate and apply toward the payment of such of the Liabilities, and in such
order of application,  as the Company may from time to time elect, any balances,
credits,  deposits,  accounts  or moneys of the Trust.  If any  notification  of
intended  disposition  of  any  of the  Collateral  is  required  by  law,  such
notification, if mailed, shall be deemed reasonably and properly given if mailed
at least five (5) days before such  disposition,  postage prepaid,  addressed to
the Trust,  either at the  address  of the Trust  shown  below,  or at any other
address of the Trust  appearing on the records of the  Company.  Any proceeds of
any disposition of Collateral  shall be applied as provided in Section 7 hereof.
All rights and remedies of the Company  expressed  hereunder  are in addition to
all other rights and remedies  possessed by it,  including those under any other
agreement or instrument relating to any of the Liabilities or security therefor.
No delay on the part of the Company in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by the Company of
any right or remedy  shall  preclude  other or further  exercise  thereof or the
exercise  of any other  right or  remedy.  No action  of the  Company  permitted
hereunder  shall  impair  or affect  the  rights  of the  Company  in and to the
Collateral.

           (c)  The  Trust  agrees  that in any  sale  of any of the  Collateral
whenever an Event of Default  hereunder  shall have occurred and be  continuing,
the Company is hereby authorized to comply with any limitation or restriction in
connection  with such sale as it may be advised by counsel is necessary in order
to avoid any violation of law (including,  without  limitation,  compliance with
such  procedures  as  may  restrict  the  number  of  prospective   bidders  and
purchasers,  require that such  prospective  bidders and purchasers have certain
qualification,  and restrict such prospective  bidders and purchasers to persons
who will  represent and agree that they are purchasing for their own account for
investment  and  not  with  a  view  to  the  distribution  or  resale  of  such
Collateral),  or in order to obtain any required  approval of the sale or of the
purchaser by any governmental  regulatory  authority or official,  and the Trust
further  agrees  that  such  compliance  shall not  result  in such  sale  being
considered or deemed not to have been made in a commercially  reasonable manner,
nor shall the Company be liable nor  accountable  to the Trust for any  discount
allowed by the  reason of the fact that such  Collateral  is sold in  compliance
with any such limitation or restriction.

                                                        -5-

<PAGE>



           (d)  Notwithstanding  anything to the contrary herein or in the Trust
Note or the Loan Agreement  contained or implied,  if an Event of Default occurs
with  respect  to the  Trust  Loan by the  Trust,  the  value  of  Trust  assets
transferred in satisfaction thereof shall not exceed the amount of such default.
In addition,  such a transfer of such Trust assets shall only occur upon, and to
the extent of the  failure  of, the Trust to meet the  payment  schedule  of the
Trust Loan provided in Article II of the Loan Agreement.

           Section  7.   Application  of  Proceeds  of  Sale  or  Cash  Held  as
Collateral.  The proceeds of sale of  Collateral  sold  pursuant to the terms of
Section 6 hereof and/or,  after an Event of Default, the cash held as Collateral
hereunder,  shall  be  applied  by the  Company,  to  the  extent  permitted  by
applicable law, as follows:

                  First:  to  payment  of the costs and  expenses  of such sale,
           including the out-of-pocket costs and expenses of the Company and the
           reasonable  fees and  out-of-pocket  costs and  expenses  of  counsel
           employed in connection therewith,  and to the payment of all advances
           made by the Company for the  account of the Trust  hereunder  and the
           payment  of  all  costs  and  expenses  incurred  by the  Company  in
           connection with the administration and enforcement of this Agreement,
           to the extent that such  advances,  costs and expenses shall not have
           been reimbursed to the Company;

                  Second:  to the payment in full of the Liabilities; and

                  Third: the balance,  if any, of such proceeds shall be paid to
         the Trust,  its  successors  and  assigns,  or as a court of  competent
         jurisdiction may direct.

           Section  8.  Authority  of  Company.  The  Company  shall have and be
entitled to exercise all such powers hereunder as are specifically  delegated to
the Company by the terms  hereof,  together  with such powers as are  incidental
thereto.  The  Company may  execute  any of its duties  hereunder  by or through
agents or  employees  and shall be  entitled  to  retain  counsel  and to act in
reliance upon the advice of such counsel  concerning  all matters  pertaining to
its duties hereunder. Neither the Company, nor any director, officer or employee
of the  Company,  shall be liable for any action taken or omitted to be taken by
it or them  hereunder  or in  connection  herewith,  except for its or their own
gross negligence or wilful  misconduct.  The Trust hereby agrees,  to the extent
permitted by applicable law, to reimburse the Company,  on demand, for all costs
and expenses  incurred by the Company in connection with the enforcement of this
Agreement  (including  costs and expenses  incurred by any agent employed by the
Company).

           Section 9.  Termination.  This Agreement shall terminate when all the
Liabilities have been fully paid and performed,  at which time the Company shall
reassign and redeliver (or cause to be reassigned and redelivered) to the Trust,
or to such person or persons as the Trust shall designate, against receipt, such
of the Collateral (if any) as shall not have been theretofore released,  sold or
otherwise applied by the Company pursuant to the terms hereof and shall still be
held by it hereunder,

                                                        -6-

<PAGE>



together with any appropriate  instruments of reassignment and release. Any such
reassignment  shall be without recourse upon, or  representation or warranty by,
the Company.

           Section  10.  Required  Release of  Collateral.  Notwithstanding  any
provision of this Agreement or the Loan  Agreement to the contrary,  the Company
from time to time will release from the pledge and security  interest  under the
Loan Agreement,  such Collateral as must be allocated to participants  under the
Plan pursuant to Section  8.7(h) of the Plan and otherwise  under the Code,  the
Exempt Loan Rules or other applicable law.

           Section  11.  Limited  Recourse.   Notwithstanding  anything  to  the
contrary  herein  or in  the  Trust  Note,  the  Loan  Agreement  or  any  other
instrument, agreement or document contained or implied, the Liabilities shall be
enforceable to the extent  permitted under  applicable law,  including,  without
limitation,  the Exempt Loan Rules,  only against the Trust to the extent of the
Collateral not theretofore  released from the pledge and security interest under
this Agreement as provided herein and contributions (other than contributions of
employer securities) made to the Trust in accordance with the Plan to enable the
Trust to pay and satisfy the Liabilities  and from earnings  attributable to the
Shares and the investment of such contributions (collectively,  the "'Trust Loan
Collateral").  No  recourse  shall be had to or against  the Trust or the assets
thereof  (other  than the Trust Loan  Collateral)  for any  deficiency  judgment
against the Trust for the purpose of obtaining payment or other  satisfaction of
the Liabilities.  Without limiting the foregoing, the Trustee of the Trust shall
have no personal liability for any of the Liabilities, other than as required by
or arising under applicable law.

           Section 12. Notices.  All  communications and notices hereunder shall
be in  writing  and,  if  mailed,  shall  be  deemed  to be given  when  sent by
registered or certified mail, postage prepaid,  return receipt requested,  or by
telecopier, duly confirmed, and addressed to such party at the address indicated
below or to such other address as such party may  designate in writing  pursuant
to this Section 12.

                                    CITIZENS BANCORP
                                    60 South Main Street
                                    P.O. Box 635
                                    Frankfort, Indiana   46041
                                    Attention: Fred W. Carter, President

                                    THE FARMERS BANK
                                    9 East Clinton Street
                                    Frankfort, Indiana  46041-0129

           Section 13. Binding  Agreement  Assignment.  This Agreement,  and the
terms,  covenants and conditions hereof,  shall be binding upon and inure to the
benefit of the parties  hereto,  and their  respective  successors  and assigns,
except the Trust shall not be permitted to assign this Agreement or any interest
herein or in the Collateral,  or any part thereof, or otherwise grant any option
with respect to the  Collateral,  or any part thereof and the Company  shall not
assign any interest herein or

                                                        -7-

<PAGE>



in the Collateral  unless such assignment is expressly made subject to the terms
of the Loan Documents.

           Section 14. Miscellaneous Provisions.  Neither this Agreement nor any
provision hereof may be amended,  modified, waived, discharged or terminated nor
may any of the  Collateral  be released or the pledge or the  security  interest
created hereby extended, except by an instrument in writing duly signed by or on
behalf of the  Company  hereunder.  The  section  headings  used  herein are for
convenience  of reference  only and shall not define or limit the  provisions of
this Agreement. This Agreement may be executed in any number of counterparts and
by the  different  parties on separate  counterparts  and each such  counterpart
shall be deemed to be an  original,  but all such  counterparts  shall  together
constitute but one and the same Agreement.

           Section 15.  Governing Law;  Interpretation.  This Agreement has been
made and delivered at Spencer,  Indiana,  and, except to the extent preempted by
ERISA,  shall be governed by the internal laws of the State of Indiana,  without
regard to principles of conflict of laws.  Wherever  possible each  provision of
this Agreement  shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under such law, such provision  shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provision or the remaining provisions of this Agreement.

           Section  16.  Filing as a Financing  Statement.  At the option of the
Company, this Agreement, or a carbon, photographic or other reproduction of this
Agreement or of any Uniform  Commercial  Code financing  statement  covering the
Collateral or any portion  thereof  shall be sufficient as a Uniform  Commercial
Code financing statement and may be filed as such.

           IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to
be duly executed by their respective  representatives  thereunto duly authorized
as of the date first above written.

                                              TRUST UNDER CITIZENS BANCORP
                                              EMPLOYEE STOCK OWNERSHIP PLAN
                                              AND TRUST AGREEMENT

                                              By: The Farmers Bank, Trustee


                                              By:

                                    Printed:

                                      Its:



                                                        -8-

<PAGE>



                                                     CITIZENS BANCORP

                                                     By:

                                                     Printed:Fred W. Carter

                                                     Its:    President


                                                        -9-

<PAGE>



                                                                       Exhibit C


                             CERTIFICATE OF TRUSTEE

           The  undersigned,  The Farmers Bank, an Indiana bank, in its capacity
as Trustee  ("Trustee")  of the Trust  under  Citizens  Bancorp  Employee  Stock
Ownership Plan and Trust Agreement  (Effective as of July 1, 1997) (the "Trust")
hereby  certifies,  pursuant to Section  5.1(c) of that certain  Exempt Loan and
Share  Purchase  Agreement  between the Trust and Citizens  Bancorp of even date
herewith (the "Loan Agreement") that:

                  (i) it has  determined  that the Trust Loan, as defined in the
         Loan Agreement,  is primarily for the benefit of ESOP  participants and
         their  beneficiaries  and bears  interest  at a rate not in excess of a
         reasonable  rate  and  that  the  terms  of the  loan  are at  least as
         favorable  to the  Trust  and the ESOP  participants  as the terms of a
         comparable  loan  resulting  from  arm's-length   negotiations  between
         completely independent parties;

                  (ii) the other  representations  and  warranties  of the Trust
         contained in the Loan Agreement are true in all material respects as of
         the date of this Certificate; and

                  (iii)  the  conditions  set  forth  in  Article  V of the Loan
         Agreement,  to the extent their satisfaction depends upon action on the
         part of the Trust or the Trustee, have been satisfied as of the date of
         this Certificate.

           EXECUTED this ____ day of September, 1997.


                          The Farmers Bank, as Trustee of the Trust under the
                          Citizens Bancorp Employee Stock Ownership Plan
                          and Trust Agreement (Effective as of July 1,  1997)


                          By:


                                                       -10-

<PAGE>


                                                                       Exhibit D


                           CERTIFICATE OF THE COMPANY

           The  undersigned,  Citizens  Bancorp,  an  Indiana  corporation  (the
"Company"),  pursuant to Section  5.3(b) of that  certain  Exempt Loan and Share
Purchase Agreement between The Farmers Bank, an Indiana bank, in its capacity as
Trustee of the Trust under the Citizens  Bancorp  Employee Stock  Ownership Plan
and Trust Agreement  (Effective as of July 1, 1997) and the Company of even date
herewith (the "Loan Agreement"),  hereby certifies that the  representations and
warranties of the Company  contained in the Loan  Agreement are true and correct
in all material  respects,  and the Company is in compliance  with its covenants
set forth in the Loan Agreement in all material respects, as of the date of this
Certificate.

           EXECUTED as of this ___ day of September, 1997.


                                                   CITIZENS BANCORP


                                                   By:
                                                       Fred W. Carter, President





                                                       -11-