rvb_8k1120ex102.htm


    Exhibit
      10.2

     

    AMENDED
      AND RESTATED

    EMPLOYMENT
      AGREEMENT

     

    THIS
      AGREEMENT entered into this 20th day of November, 2007, by and between River
      Valley Financial Bank, a federal savings bank (the “Bank”), and Anthony D.
      Brandon (the “Employee”).  The parties agree, however, that the
“Effective Date” of this Agreement shall be January 1, 2005.

     

    This
      Agreement ends and restates the prior Employment Agreement between the Bank
      and
      the Employee dated July 29, 2005 (the “Prior Agreement”).  It has been
      amended and restated for compliance with the final regulations under Section
      409A of the Internal Revenue Code of 1986, as amended (the “Code”), effective as
      of January 1, 2005.

    


    WHEREAS,
      the Employee is employed by the Bank as Executive Vice President and has
      performed and is expected to continue to perform valuable services for the
      Bank;
      and

     

    WHEREAS,
      the Board of Directors of the Bank believes it is in the best interests of
      the
      Bank to enter into this Agreement with the Employee in order to assure
      continuity of management of the Bank and to reinforce and encourage the
      continued attention and dedication of the Employee to his assigned duties;
      and

     

    WHEREAS,
      the parties desire by this writing to set forth the continuing employment
      relationship of the Bank and the Employee.

     

    NOW,
      THEREFORE, it is AGREED as follows:

     

    1.  Employment.    The
      Employee is employed as Executive Vice President of the Bank.  The
      Employee shall render such administrative and management services for the Bank
      as are currently rendered and as are customarily performed by persons situated
      in a similar executive capacity.  The Employee shall also promote, by
      entertainment or otherwise, as and to the extent permitted by law, the business
      of the Bank.  The Employee’s other duties shall be such as the Board
      of Directors (the “Board”) of the Bank may from time to time reasonably direct,
      including normal duties as an officer of the Bank.

     

    2.  Base
      Compensation.    The
      Bank agrees to pay the Employee during the term of this Agreement a salary
      at
      the rate of $________ per annum, payable in cash not less frequently than
      monthly, and shall be effective and calculated commencing the Effective
      Date.  The salary shall be reviewed annually by the Board of Directors
      of the Bank no later than January of each year commencing in January of 2008
      and
      any adjustment in the future on salary shall be effective on January 1st of each
      year.

     

    3.  Bonuses.  The
      Employee shall participate in any year end bonus granted to other employees
      by
      the Board.  The Employee shall further participate in an equitable
      manner with all other senior management employees of the Bank in discretionary
      bonuses that the Board may award from time to time to the Bank’s senior
      management employees.  No other compensation provided for in this
      Agreement shall be deemed a substitute for the Employee’s right to participate
      in such discretionary bonuses.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.  Benefits.

     

    (a)  Participation
      in Retirement, Medical and Other Plans.  During the term of this
      Agreement, the Employee shall be eligible to participate in the following
      benefit plans: group hospitalization, disability, health, dental, sick leave,
      retirement, pension, and/or other present or future qualified plans provided
      by
      the Bank, generally, which benefits, taken as a whole, must be at least as
      favorable as those in effect on the Effective Date, unless the continued
      operation of such plans would adversely affect the Bank’s operating results or
      financial condition in a material way, the Bank’s Board of Directors concludes
      that modifications to such plans are necessary to avoid such adverse effects
      and
      such modifications apply consistently to all employees of the Bank.

     

    (b)  Employee
      Benefits; Expenses.  The Employee shall be eligible to participate
      in any fringe benefits which are or may become available to the Bank’s senior
      management employees, including, for example, any stock option or incentive
      compensation plans, and any other benefits which are commensurate with the
      responsibilities and functions to be performed by the Employee under this
      Agreement.  The Employee shall be reimbursed for all reasonable
      out-of-pocket business expenses which he shall incur in connection with his
      services under this Agreement, upon substantiation of such expenses in
      accordance with the policies of the Bank.

     

      5. 
Term.  The
      Bank hereby employs the Employee, and the Employee hereby accepts such
      employment under this Agreement, for the period commencing on the Effective
      Date
      and ending on October 1, 2010 (or such earlier date as is determined in
      accordance with Section 9).  Additionally, prior to each annual
      anniversary date from October 1, 2007, the Employee's term of employment shall
      be extended for an additional one-year period beyond the then effective
      expiration date, provided the Board determines in a duly adopted resolution
      that
      the performance of the Employee has met the Board's requirements and standards,
      and that this Agreement shall be extended.  Only those members of the
      Board of Directors who have no personal interest in this Employment Agreement
      shall discuss and vote on the approval and subsequent review of this
      Agreement.

     

    6.  Loyalty;
      Noncompetition.

     

    (a)  During
      the period of his employment hereunder and except for illnesses, reasonable
      vacation periods, and reasonable leaves of absence, the Employee shall devote
      all his full business time, attention, skill, and efforts to the faithful
      performance of his duties hereunder; provided, however, from time to time,
      the
      Employee may serve on the Boards of Directors of, and hold any other offices
      or
      positions in, companies or organizations, which will not present any conflict
      of
      interest with the Bank or any of its subsidiaries or affiliates, or unfavorably
      affect the performance of Employee’s duties pursuant to this Agreement, or will
      not violate any applicable statute or regulation.  “Full business
      time” is hereby defined as that amount of time usually devoted to like companies
      by similarly situated executive officers.  During the term of his
      employment under this Agreement, the Employee shall not engage in any business
      or activity contrary to the business affairs or interests of the Bank, or be
      gainfully employed in any other position or job other than as provided
      above.

     

    
      
        
        

      

      
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    (b)  Nothing
      contained in this Paragraph 6 shall be deemed to prevent or limit the Employee’s
      right to invest in the capital stock or other securities of any business
      dissimilar from that of the Bank, or, solely as a passive or minority investor,
      in any business.

     

    (c)  While
      Employee is employed by the Bank and for a period of three years after
      termination of Employee’s employment by the Bank or by the Employee for reasons
      other than those set forth in Section 9 (d) hereof, the Employee shall not
      directly or indirectly, engage in any bank or bank-related business which
      competes with the business of the Bank as conducted during Employee’s employment
      by the Bank for any financial institution, including but not limited to banks,
      savings and loan associations, and credit unions within a fifty mile radius
      of
      Madison, Indiana.

     

    7.  Standards.  The
      Employee shall perform his duties under this Agreement in accordance with such
      reasonable standards as the Board may establish from time to
      time.  The Bank will provide Employee with the working facilities and
      staff customary for similar executives and necessary for him to perform his
      duties.

     

    8.  Vacation,
      Sick Leave and Disability.  The
      Employee shall be entitled to [fifteen days] vacation annually and shall be
      entitled to the same sick leave and disability leave as other employees of
      the
      Bank.

     

    The
      Employee shall not receive any additional compensation from the Bank on account
      of his failure to take a vacation or sick leave, and the Employee shall not
      accumulate unused vacation or sick leave from one fiscal year to the next,
      except in either case to the extent authorized by the Board.

     

    In
      addition to the aforesaid paid vacations, the Employee shall be entitled,
      without loss of pay, to absent himself voluntarily from the performance of
      his
      employment with the Bank for such additional periods of time and for such valid
      and legitimate reasons as the Board may in its discretion
      determine.  Further, the Board may grant to the Employee a leave or
      leaves of absence, with or without pay, at such time or times and upon such
      terms and conditions as such Board in its discretion may determine.

     

    9.  Termination
      and Termination Pay.  Subject
      to Section 11 hereof, the Employee’s employment hereunder may be terminated
      under the following circumstances:

     

    (a)  Death.  The
      Employee’s employment under this Agreement shall terminate upon his death during
      the term of this Agreement, in which event the Employee’s estate shall be
      entitled to receive the compensation due the Employee through the last day
      of
      the calendar month in which his death occurred.

     

    (b)  Disability.

     

    (i)  The
      Bank
      may terminate the Employee’s employment, should the Employee become disabled, in
      a manner consistent with the Bank’s and the Employee’s rights and obligations
      under the Americans With Disabilities Act or other applicable state and federal
      laws concerning disability.  For the purpose of this Agreement,
“Disability” means any medically determinable physical or mental impairment
      which can be expected to result in death or to last for a continuous period
      of
      not less than 12 months and which (i) renders Employee unable to engage in
      any
      substantial gainful activity or (ii) entitles Employee to income replacement
      benefits for a period of not less than three months under an accident and
      benefit plan covering employees of the Bank, as reasonably determined by a
      duly
      licensed physician selected in good faith by the Bank.

     

    
      
        
        

      

      
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    (ii)  During
      any period that the Employee shall receive disability benefits and to the extent
      that the Employee shall be physically and mentally able to do so, he shall
      furnish such information, assistance and documents so as to assist in the
      continued ongoing business of the Bank and, if able, shall make himself
      available to the Bank to undertake reasonable assignments consistent with his
      prior position and his physical and mental health.  The Bank shall pay
      all reasonable expenses incident to the performance of any assignment given
      to
      the Employee during the disability period.

     

    (c)  Just
      Cause.  The Board may, by written notice to the Employee,
      immediately terminate his employment at any time, for Just Cause.  The
      Employee shall have no right to receive compensation or other benefits for
      any
      period after termination for Just Cause.  Termination for “Just Cause”
shall mean termination because of, in the good faith determination of the Board,
      the Employee’s personal dishonesty, incompetence, willful misconduct, breach of
      fiduciary duty involving personal profit, intentional failure to perform stated
      duties, willful violation of any law, rule or regulation (other than traffic
      violations or similar offenses) or final cease-and-desist order, or material
      breach of any provision of this Agreement.  Notwithstanding the
      foregoing, in the event of termination for Just Cause there shall be delivered
      to the Employee a copy of a resolution duly adopted by the affirmative vote
      of
      not less than a majority of the entire membership of the Board at a meeting
      of
      the Board called and held for that purpose (after reasonable notice to the
      Employee and an opportunity for the Employee, together with the Employee’s
      counsel, to be heard before the Board), such meeting and the opportunity to
      be
      heard to be held at least 30 days prior to such termination, finding that in
      the
      good faith opinion of the Board the Employee was guilty of conduct set forth
      above in the second sentence of this Subsection (c) and specifying the
      particulars thereof in detail.

     

    (d)  Without
      Just Cause; Constructive Discharge.

     

    (i)  The
      Board
      may, by written notice to the Employee, immediately terminate his employment
      at
      any time for a reason other than Just Cause, in which event the Employee shall
      be entitled to receive the following compensation and benefits (unless such
      termination occurs following a Change in Control (as hereinafter defined),
      in
      which event the benefits and compensation provided for in Section 11 shall
      apply):  (i)  the salary provided pursuant to Section 2
      hereof, up to the date of termination of the term as provided in Section 5
      hereof (including any renewal term) of this Agreement (the “Expiration Date”),
      and (ii) at the Employee’s election, either (A) cash in an amount equal to the
      cost to the Employee of obtaining all health, life, disability and other
      benefits (excluding stock options) which the Employee would have been eligible
      to participate in through the Expiration Date, based upon the benefit levels
      substantially equal to those that the Bank provided for the Employee at the
      date
      of termination of employment, or (B) continued participation under such Bank
      benefit plans through the Expiration Date, but only to the extent the Employee
      continues to qualify for participation therein.

     

    
      
        
        

      

      
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    (ii)  The
      Employee may voluntarily terminate his employment under this Agreement, and
      the
      Employee shall thereupon be entitled to receive the compensation and benefits
      payable under Section 9(d)(1) hereof, within ninety (90) days following the
      occurrence of any of the following events, which has not been consented to
      in
      advance by the Employee in writing and which has not been corrected by the
      Bank
      within 30 days after notice from the Employee (unless such voluntary termination
      occurs following a Change in Control, in which event the benefits and
      compensation provided for in Section 11 shall apply): (i) the requirement that
      the Employee move his personal residence, or perform his principal executive
      functions, more than thirty (30) miles from his primary office; (ii) a material
      reduction in the Employee’s base compensation, unless part of an
      institution-wide reduction; (iii) the failure by the Bank to continue to provide
      the Employee with compensation and benefits provided for under this Agreement,
      as the same may be increased from time to time, or with benefits substantially
      similar to those provided to him under any of the employee benefit plans in
      which the Employee now or hereafter becomes a participant, or the taking of
      any
      action by the Bank which would directly or indirectly reduce any of such
      benefits or deprive the Employee of any material fringe benefit enjoyed by
      him,
      unless part of an institution-wide reduction; (iv) the assignment to the
      Employee of duties and responsibilities materially different from those normally
      associated with his position as referenced in Section 1; or (v) a material
      diminution or reduction in the Employee’s responsibilities or authority
      (including reporting responsibilities) in connection with his employment with
      the Bank.

     

    (iii)  Notwithstanding
      the foregoing, but only to the extent required under federal banking law, the
      amount payable under clause (d)(1)(i) hereof shall be reduced to the extent
      that
      on the date of the Employee’s termination of employment, the present value of
      the benefits payable under clauses (d)(1)(i) and (ii) hereof exceeds the
      limitation on severance benefits that is set forth in Regulatory Bulletin 27a
      of
      the Office of Thrift Supervision, as in effect on the Effective
      Date.  In the event that Section 280G of the Internal Revenue Code of
      1986, as amended (the “Code”), becomes applicable to payments made under this
      Section 9(d), and the payments exceed the “Maximum Amount” as defined in Section
      11(a)(1) hereof, the payments shall be reduced as provided by Section 11(a)(2)
      of this Agreement.

     

    (e)  Termination
      or Suspension Under Federal Law.

     

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

     

    
      
        
        

      

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

     

    (iii)  All
      obligations under this Agreement shall terminate, except to the extent
      determined that continuation of this Agreement is necessary for the continued
      operation of the Bank; (i) by the Director of the Office of Thrift Supervision
      (“Director of OTS”), or his or her designee, at the time that the Federal
      Deposit Insurance Corporation (“FDIC”) enters into an agreement to provide
      assistance to or on behalf of the Bank under the authority contained in Section
      13(c) of FDIA; or (ii) by the Director of the OTS, or his or her designee,
      at
      the time that the Director of the OTS, or his or her designee approves a
      supervisory merger to resolve problems related to operation of the Bank or
      when
      the Bank is determined by the Director of the OTS to be in an unsafe or unsound
      condition.  Such action shall not affect any vested rights of the
      parties.

     

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

     

    (f)  Voluntary
      Termination by Employee.  Subject to Section 11 hereof, the
      Employee may voluntarily terminate employment with the Bank during the term
      of
      this Agreement, upon at least ninety (90) days’ prior written notice to the
      Board of Directors, in which case the Employee shall receive only his
      compensation, vested rights and employee benefits up to the date of his
      termination (unless such termination occurs pursuant to Section 9(d)(2) hereof,
      in which event the benefits and compensation provided for in section 9(d) shall
      apply).

     

    10.  No
      Mitigation.  The
      Employee shall not be required to mitigate the amount of any payment provided
      for in this Agreement by seeking other employment or otherwise and no such
      payment shall be offset or reduced by the amount of any compensation or benefits
      provided to the Employee in any subsequent employment.

     

    11.  (a)  Change
      in Control.

     

    (1)  Expiration
      of Term of Agreement.  The term of this Agreement shall expire
      upon a Change in Control.  If the term of this Agreement expires upon
      a Change in Control and the Employee’s employment has not previously terminated,
      the Bank shall continue to be bound by, and shall cause any successor in
      interest to be bound by, the terms of this Section 11(a)(1) and Section 12
      hereof.

     

    
      
        
        

      

      
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    (i)  If
      on or
      before the Change in Control the Bank or its successor in interest offers to
      continue the employment of Employee as Executive Vice President of the Bank
      at
      the same compensation and substantially the same benefits he was receiving
      under
      this Agreement immediately prior to the Change in Control without placing any
      material limits on Employee’s duties or authority as Executive Vice President
      (including his authority, subject to corporate controls no more restrictive
      than
      those in effect on the date hereof, to hire and discharge employees who are
      not
      bona fide officers of the Bank), for at least 36 months (whether or not pursuant
      to a written agreement), and if the Employee accepts such offer and the Bank
      or
      its successor in interest continues to employ the Employee on such terms for
      at
      least 36 months following the Change in Control, the Employee shall be entitled
      to no further payments under this Agreement (other than any payments to which
      he
      may have become entitled prior to the expiration of the term of the
      Agreement).

     

    (ii)  If
      on or
      before the Change in Control, the Bank or its successor in interest does not
      offer to continue the employment of Employee as Executive Vice President of
      the
      Bank at the same compensation and substantially the same benefits he was
      receiving under this Agreement immediately prior to the Change in Control
      without placing any material limits on Employee’s duties or authority as
      Executive Vice President (including his authority subject to corporate controls
      no more restrictive than those in effect on the date hereof, to hire and
      discharge employees who are not bona fide officers of the Bank), for at least
      36
      months (whether or not pursuant to a written agreement), the Employee shall
      be
      entitled to a lump sum payment equal to the difference between (i) the product
      of 2.99 times his “base amount” as defined in Section 280G(b)(3) of the Code and
      regulations promulgated thereunder (“Maximum Amount”), and (ii) the sum of any
      other parachute payments (as defined under Section 280G(b)(2) of the Code),
      that
      the Employee receives on account of the Change in Control.  Such
      payment shall be made on the effective date of the Change in
      Control.

     

    (iii)  If
      Employee accepts an offer of employment from the Bank or its successor in
      interest which satisfies the requirements of Section 11(a)(1)(i) but the Bank
      or
      its successor in interest terminates the Employee’s employment involuntarily
      within that 36-month period or does not honor those requirements for at least
      36
      months following the Change in Control, other than as a result of a termination
      for Just Cause as defined in Section 9(c), Employee shall be entitled to the
      payment described in Section11(a)(1)(ii), which payment shall be made within
      10
      days after Employee notifies the Bank or its successor in interest of its
      failure to continue to employ Employee on such terms for at least 36 months
      following the Change in Control, other than as a result of a termination for
      Just Cause as defined in Section 9(c). For purposes of clarification, the
      payment to be made pursuant to this Section 11(a)(1)(iii) will not be payable
      if
      Employee’s employment with the Bank is terminated during that 36-month period
      for Just Cause as defined in Section 9(c) or as a result of the Employee’s
      death, Disability or voluntary resignation.

     

    
      
        
        

      

      
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    (iv)  If
      any
      successor in interest fails or refuses to be bound by the terms of this
      Section11(a)(1), the Employee shall be entitled to the payment described in
      Section 11(a)(1)(ii), payable promptly after the breach by such successor in
      interest of its obligations under this Section 11(a)(1).

     

    (v)  In
      the
      event that the independent public accountants of the Bank or its successor
      in
      interest determine that any payment to or for the benefit of the Employee made
      pursuant to this Section 11(a)(1) would be non-deductible by the Bank or its
      successor in interest for federal income tax purposes because of Section 280G
      of
      the Code, then the amount payable to or for the benefit of the Employee pursuant
      to this Section 11(a)(1) shall be reduced (but not below zero) to the Reduced
      Amount.  For purposes of this Section 11(a)(1) the “Reduced Amount”
shall be the amount which maximizes the amount payable without causing the
      payment to be non-deductible by the Bank or its successor in interest because
      of
      Section 280G of the Code.

     

    (2)  In
      the
      event that the Employee and the Bank jointly determine and agree that the total
      parachute payments receivable under clauses (i) and (ii) of Section 11(a)(1)
      hereof exceed the Maximum Amount, notwithstanding the payment procedure set
      forth in Section 11(a)(1) hereof, the Employee shall determine which and how
      much, if any, of the parachute payments to which he is entitled shall be
      eliminated or reduced so that the total parachute payments to be received by
      the
      Employee do not exceed the Maximum Amount.  If the Employee does not
      make his determination within ten business days after receiving a written
      request from the Bank, the Bank may make such determination, and shall notify
      the Employee promptly thereof.  Within five business days of the
      earlier of the Bank’s receipt of the Employee’s determination pursuant to this
      paragraph or the Bank’s determination in lieu of a determination by the
      Employee, the Bank shall pay to or distribute to or for the benefit of the
      Employee such amounts as are then due the Employee under this
      Agreement.

     

    (3)  As
      a
      result of uncertainty in application of Section 280G of the Code at the time
      of
      payment hereunder, it is possible that such payments will have been made by
      the
      Bank which should not have been made (“Overpayment”) or that additional payments
      will not have been made by the Bank which should have been made
      (“Underpayment”), in each case, consistent with the calculations required to be
      made under Section 11(a)(1) hereof.  In the event that the Employee,
      based upon the assertion by the Internal Revenue Service against the Employee
      of
      a deficiency which the Employee believes has a high probability of success,
      determines that an Overpayment has been made, any such Overpayment paid or
      distributed by the Bank to or for the benefit of Employee shall be treated
      for
      all purposes as a loan ab initio which the Employee shall repay to the Bank
      together with interest at the applicable  federal rate provided for in
      Section 7872(f)(2)(B) of the Code; provided, however, that no such loan shall
      be
      deemed to have been made and no amount shall be payable by the Employee to
      the
      Bank if and to the extent such deemed loan and payment would not either reduce
      the amount on which the Employee is subject to tax under Section 1 and Section
      4999 of the Code or generate a refund of such taxes.  In the event
      that the Employee and the Bank determine, based upon controlling precedent
      or
      other substantial authority, that an Underpayment has occurred, any such
      Underpayment shall be promptly paid by the Bank to or for the benefit of the
      Employee together with interest at the applicable federal rate provided for
      in
      Section 7872(f)(2)(B) of the Code.

     

    
      
        
        

      

      
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    (4)  For
      purposes of this Agreement, a “Change in Control” shall mean any of the
      following:

     

    (i)  a
      change
      in the ownership of the Bank or its sole shareholder, River Valley Bancorp
      (the
“Holding Company”), which shall occur on the date that any one person, or more
      than one person acting as a group, acquires ownership of stock of the Bank
      or
      the Holding Company that, together with stock held by such person or group,
      constitutes more than fifty percent (50%) of the total fair market value or
      total voting power of the stock of the Bank or the Holding
      Company.  Such acquisition may occur as a result of a merger of the
      Holding Company or the Bank into another entity which pays consideration for
      the
      shares of capital stock of the merging Holding Company or
      Bank.  However, if any one person, or more than one person acting as a
      group, is considered to own more than fifty percent (50%) of the total fair
      market value or total voting power of the stock of the Bank or the Holding
      Company, the acquisition of additional stock by the same person or persons
      is
      not considered to cause a change in the ownership of the Bank or the Holding
      Company (or to cause a change in the effective control of the Bank or the
      Holding Company (within the meaning of subsection (ii)).  An increase
      in the percentage of stock owned by any one person, or persons acting as a
      group, as a result of a transaction in which the Bank or the Holding Company
      acquires its stock in exchange for property will be treated as an acquisition
      of
      stock for purposes of this subsection.  This subsection applies only
      when there is a transfer of stock of the Bank or the Holding Company (or
      issuance of stock of the Bank or the Holding Company) and stock in the Bank
      or
      the Holding Company remains outstanding after the transaction;

     

    (ii)  a
      change
      in the effective control of the Bank or the Holding Company, which shall occur
      only on either of the following dates:

     

    1)  the
      date
      any one person, or more than one person acting as a group acquires (or has
      acquired during the 12 month period ending on the date of the most recent
      acquisition by such person or persons) ownership of stock of the Bank or the
      Holding Company possessing thirty percent (30%) or more of the total voting
      power of the stock of the Bank or the Holding Company; or

     

    2)  the
      date
      a majority of members of the Holding Company’s board of directors is replaced
      during any 12 month period by directors whose appointment or election is not
      endorsed by a majority of the members of the Holding Company’s board of
      directors before the date of the appointment or election; provided, however,
      that this provision shall not apply if another corporation is a majority
      shareholder of the Holding Company.

     

    
      
        
        

      

      
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    If
      any
      one person, or more than one person acting as a group, is considered to
      effectively control the Bank or the Holding Company, the acquisition of
      additional control of the Bank or the Holding Company by the same person or
      persons is not considered to cause a change in the effective control of the
      Bank
      or the Holding Company (or to cause a change in the ownership of the Bank or
      the
      Holding Company within the meaning of subsection (i) of this
      section).

     

    (iii)  a
      change
      in the ownership of a substantial portion of the Bank’s assets, which shall
      occur on the date that any one person, or more than one person acting as a
      group, acquires (or has acquired during the 12 month period ending on the date
      of the most recent acquisition by such person or persons) assets from the Bank
      that have a total gross fair market value equal to or more than forty percent
      (40%) of the total gross fair market value of all of the assets of the Bank
      immediately before such acquisition or acquisitions.  For this
      purpose, gross fair market value means the value of the assets of the Bank,
      or
      the value of the assets being disposed of, determined without regard to any
      liabilities associated with such assets.  No change in control occurs
      under this subsection (iii) when there is a transfer to an entity that is
      controlled by the shareholders of the Bank immediately after the
      transfer.  A transfer of assets by the Bank is not treated as a change
      in the ownership of such assets if the assets are transferred to –

     

    1)  a
      shareholder of the Bank (immediately before the asset transfer) in exchange
      for
      or with respect to its stock;

     

    2)  an
      entity, 50 percent or more of the total value or voting power of which is owned,
      directly or indirectly, by the Bank.

     

    3)  a
      person,
      or more than one person acting as a group, that owns, directly or indirectly,
      50
      percent or more of the total value or voting power of all the outstanding stock
      of the Bank; or

     

    4)  an
      entity, at least 50 percent of the total value or voting power of which is
      owned, directly or indirectly, by a person described in paragraph
      (iii).

     

    For
      purposes of this subsection (iii) and except as otherwise provided in paragraph
      1) above, a person’s status is determined immediately after the transfer of the
      assets.

     

    (iv)  For
      purposes of this section, persons will not be considered to be acting as a
      group
      solely because they purchase or own stock of the same corporation at the same
      time, or as a result of the same public offering.  Persons will be
      considered to be acting as a group if they are owners of a corporation that
      enters into a merger, consolidation, purchase or acquisition of stock, or
      similar business transaction with the Bank or the Holding Company; provided,
      however, that they will not be considered to be acting as a group if they are
      owners of an entity that merges into the Bank or the Holding Company where
      the
      Bank or the Holding Company is the surviving corporation.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    To
      the
      extent the Employee is a “specified employee” (as defined below), payments due
      to the Employee under this Agreement that represent payment of deferred
      compensation that is subject to Section 409A of the Code shall begin no sooner
      than six months after the Employee’s separation from service; provided, however,
      that any payments not made during the six month period described in this Section
      11(a)(4)(iv) shall be made in a single lump sum as soon as administratively
      practicable after the expiration of such six month period; provided, further,
      that the six month delay required under this Section 11(a)(4)(iv) shall not
      apply to the portion of any payment resulting from the Employee’s “involuntary
      separation from service” (as defined in Treasury Reg. Section 1.409A-1(n) and
      including a “separation from service for good reason,” as defined in Treasury
      Reg. Section 1.409A 1(n)(2)) that (i) is payable no later than the last day
      of
      the second year following the year in which the separation from service occurs,
      and (ii) does not exceed two times the lesser of (1) the Employee’s annualized
      compensation for the year prior to the year in which the separation from service
      occurs, or (2) the dollar limit described in Section 401(a)(17) of the
      Code.  It is expressly intended and understood that payments made
      under Section 11(a)(1) do not represent payments of deferred compensation
      subject to Section 409A of the Code and are not subject to the six month delay
      required by this Section 11(a)(4)(iv).

     

    To
      the
      extent any life, health, disability or other welfare benefit coverage provided
      to the Employee under this Agreement would be taxable to the Employee, the
      taxable amount of such coverage shall not exceed the applicable dollar amount
      under Section 402(g)(1)(B) of the Code determined as of the year in which the
      Employee’s separation from service occurs.  The intent of the
      foregoing sentence is to permit the Holding Company and the Bank to treat the
      provision of such benefits as a limited payment under Treasury Reg. Section
      1.409A-1(a)(9)(v)(D) so as to avoid application of the six month delay rule
      for
      specified employees.  For purposes of this Agreement, any reference to
      severance of employment or termination of employment shall mean a “separation
      from service” as defined in Treasury Reg. Section 1.409A-1(h).

     

    For
      purposes of this Agreement, the term “specified employee” shall have the meaning
      set forth in Treasury Reg. Section 1.409A-1(i) and shall include, without
      limitation, (1) an officer of the Bank or the Holding Company having annual
      compensation greater than $130,000 (as adjusted for inflation under the Code),
      (2) a five percent owner of the Bank or the Holding Company, or (3) a one
      percent owner of the Bank or the Holding Company having annual compensation
      of
      more than $150,000.  The determination of whether the Employee is a
“specified employee” shall be made by the Bank in good faith applying the
      applicable Treasury regulations.

     

    Notwithstanding
      the foregoing, but only to the extent required under federal banking law, the
      amount payable under Subsection(a)(1) of this Section 11 shall be reduced to
      the
      extent that on the date of the Employee’s termination of employment, the amount
      payable under Subsection(a)(1) of this Section 11 exceeds the limitation on
      severance benefits that is set forth in Regulatory Bulletin 27a of the Office
      of
      Thrift Supervision, as in effect on the Effective Date.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

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

     

    (c)  Trust.

     

    (1)  Within
      five business days before a Change in Control as defined in Section 11(a)(4)
      of
      this Agreement which was not approved in advance by a resolution of a majority
      of the Continuing Directors of the Bank, the Bank shall (i) deposit, or cause
      to
      be deposited, in a grantor trust (the “Trust”), designed to conform with Revenue
      Procedure 93-64 (or any successor) and having a trustee independent of the
      Bank,
      an amount equal to 2.99 times the Employee’s “base amount” as defined in Section
      280G(b)(3) of the Code, and (ii) provide the trustee of the Trust with a written
      direction to hold said amount and any investment return thereon in a segregated
      account for the benefit of the Employee, and to follow the procedures set forth
      in the next paragraph as to the payment of such amounts from the
      Trust.

     

    (2)  During
      the thirty-six (36) consecutive month period following the date on which the
      Bank makes the deposit referred to in the preceding paragraph, the Employee
      may
      provide the trustee of the Trust with a written notice requesting that the
      trustee pay to the Employee an amount designated in the notice as being payable
      pursuant to Section 11(a).  Within three business days after receiving
      said notice, the trustee of the Trust shall send a copy of the notice to the
      Bank via overnight and registered mail, return receipt requested.  On
      the tenth (10th) business day after mailing said notice to the association,
      the
      trustee of the Trust shall pay the Employee the amount designated therein in
      immediately available funds, unless prior thereto the Bank provides the trustee
      with a written notice directing the trustee to withhold such
      payment.  In the latter event, the trustee shall submit the dispute to
      non-appealable binding arbitration for a determination of the amount payable
      to
      the Employee pursuant to Section 11(a) hereof, and the party responsible for
      the
      payment of the costs of such arbitration (which may include any reasonable
      legal
      fees and expenses incurred by the Employee) shall be determined by the
      arbitrator.  The trustee shall choose the arbitrator to settle the
      dispute, and such arbitrator shall be bound by the rules of the American
      Arbitration Association in making his or her determination.  The
      parties and the trustee shall be bound by the results of the arbitration and,
      within 3 days of the determination by the arbitrator, the trustee shall pay
      from
      the Trust the amounts required to be paid to the Employee and/or the Bank,
      and
      in no event shall the trustee be liable to either party for making the payments
      as determined by the arbitrator.

     

    (3)  Upon
      the
      earlier of (i) any payment from the Trust to the Employee, or (ii) the date
      thirty-six (36) months after the date on which the Bank makes the deposit
      referred to in the first paragraph of this subsection (d)(1), the trustee of
      the
      Trust shall pay to the Bank the entire balance remaining in the segregated
      account maintained for the benefit of the Employee.  The Employee
      shall thereafter have no further interest in the Trust pursuant to this
      Agreement.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (d)  In
      the
      event that any dispute arises between the Employee and the Bank as to the terms
      or interpretation of this Agreement, including this Section 11, whether
      instituted by formal legal proceedings or otherwise, including any action that
      the Employee takes to enforce the terms of this Section 11 or to defend against
      any action taken by the Bank, the Employee shall be reimbursed for all costs
      and
      expenses, including reasonable attorneys’ fees, arising from such dispute,
      proceedings or actions, provided that the Employee shall obtain a final judgment
      by a court of competent jurisdiction in favor of the Employee.  Such
      reimbursement shall be paid within ten (10) days of Employee’s furnishing to the
      Bank written evidence, which may be in the form, among other things, of a
      canceled check or receipt, of any costs or expenses incurred by the
      Employee.

     

    Should
      the Employee fail to obtain a final judgment in favor of the Employee and a
      final judgment is entered in favor of the Bank, then the Bank shall be
      reimbursed for all costs and expenses, including reasonable Attorneys’ fees
      arising from such dispute, proceedings or actions.  Such reimbursement
      shall be paid within ten (10) days of the Bank furnishing to the Employee
      written evidence, which may be in the form, among other things, of a canceled
      check or receipt, of any costs or expenses incurred by the Bank.

     

    12.  Stock
      Options.  The
      Bank will permit Employee or his personal representative(s) or heirs, during
      a
      period of three months following Employee’s termination of employment by the
      Bank for the reasons set forth in Subsections 9(d) or 11(a), if such termination
      follows a Change of Control, to require the Bank, upon written request, to
      purchase all outstanding stock options previously granted to Employee under
      any
      stock option plan then in effect to the extent the options are vested at a
      cash
      purchase price equal to the amount by which the aggregate “fair market value” of
      the shares subject to such options exceeds the aggregate option price for such
      shares.  For purposes of this Agreement, the term “fair market value”
shall mean the higher of (1) the average of the highest asked prices for shares
      in the over-the-counter market as reported on the NASDAQ system or other
      exchange if the shares are traded on such system for the 30 business days
      preceding such termination, or (2) the average per share price actually paid
      for
      the most highly priced 1% of the shares acquired in connection with the Change
      of Control by any person or group acquiring such control.

     

    13.  Federal
      Income Tax Withholding.  The
      Bank may withhold all federal and state income or other taxes from any benefit
      payable under this Agreement as shall be required pursuant to any law or
      government regulation or ruling.

     

    14.  Successors
      and Assigns.

     

    (a)  Bank.  This
      Agreement shall not be assignable by the Bank, provided that this Agreement
      shall inure to the benefit of and be binding upon any corporate or other
      successor of the Bank which shall acquire, directly or indirectly, by merger,
      consolidation, purchase or otherwise, all or substantially all of the assets
      or
      stock of the Bank.

     

    (b)  Employee.  Since
      the Bank is contracting for the unique and personal skills of the Employee,
      the
      Employee shall be precluded from assigning or delegating his rights or duties
      hereunder without first obtaining the written consent of the Bank; provided,
      however, that nothing in this paragraph shall preclude (i) the Employee from
      designating a beneficiary to receive any benefit payable hereunder upon his
      death, or (ii) the executors, administrators, or other legal representatives
      of
      the Employee or his estate from assigning any rights hereunder to the person
      or
      persons entitled thereunto.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (c)  Attachment.  Except
      as required by law, no right to receive payments under this Agreement shall
      be
      subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
      charge, pledge, or hypothecation or to exclusion, attachment, levy or similar
      process or assignment by operation of law, and any attempt, voluntary or
      involuntary, to effect any such action shall be null, void and of no
      effect.

     

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

     

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

     

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

     

    18.  Entire
      Agreement.  This
      Agreement, together with any understanding or modifications thereof as agreed
      to
      in writing by the parties, shall constitute the entire agreement between the
      parties hereto and supersedes any other agreement between the parties hereto
      relating to the employment of the Employee

     


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


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

     

    
      


      
        	
                ATTEST:

              	 	
                RIVER
                  VALLEY FINANCIAL BANK

              
	 	 	 	 
	 	 	 	 
	/s/
                Lonnie D. Collins	 	
                By:

              	/s/
                Matthew P. Forrester
	
                Lonnie
                  D. Collins, Secretary

              	 	 	
                Matthew
                  P. Forrester, President

              
	 	 	 	 
	 	 	 	 
	 	 	 	/s/
                Anthony
                D. Brandon
	 	 	 	
                Anthony
                  D. Brandon

              
	 	 	 	 	 


      

    

     

    The
      undersigned, River Valley Bancorp, sole shareholder of Bank, agrees that if
      it
      shall be determined for any reason that any obligation on the part of Bank
      to
      continue to make any payments due under this Agreement to Employee is
      unenforceable for any reason, River Valley Bancorp agrees to honor the terms
      of
      this Agreement and continue to make any such payments due hereunder to Employee
      or to satisfy any such obligation pursuant to the terms of this Agreement,
      as
      though it were the Bank hereunder.

     

    
      


      
        	 	 	
                RIVER
                  VALLEY BANCORP

              
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	/s/
                Matthew P. Forrester
	 	 	 	
                Matthew
                  P. Forrester, President

              
	 	 	 	 


      

       

       

       

       

      
15