RIVER VALLEY BANCORP
                    RECOGNITION AND RETENTION PLAN AND TRUST


                                    ARTICLE I
                       ESTABLISHMENT OF THE PLAN AND TRUST

     1.01 River Valley Bancorp hereby  establishes the Recognition and Retention
Plan  (the  "Plan")  and Trust  (the  "Trust")  upon the  terms  and  conditions
hereinafter  stated in this  Recognition  and Retention Plan and Trust Agreement
(the "Agreement").

     1.02 The Trustee,  which  initially  shall be First Bankers Trust  Company,
hereby  accepts this Trust and agrees to hold the Trust  assets  existing on the
date of this Agreement and all additions and  accretions  thereto upon the terms
and conditions hereinafter stated.

                                   ARTICLE II
                               PURPOSE OF THE PLAN

     2.01 The purpose of the Plan is to retain directors and executive  officers
in key positions by providing  such persons with a  proprietary  interest in the
Holding Company (as hereinafter defined) as compensation for their contributions
to the Holding Company and to the Affiliates (as hereinafter  defined) and as an
incentive to make such  contributions  and to promote the Holding  Company's and
the Affiliates' growth and profitability in the future.

                                   ARTICLE III
                                   DEFINITIONS

     The  following  words and  phrases  when used in this Plan with an  initial
capital letter,  unless the context clearly indicates otherwise,  shall have the
meanings set forth below.  Wherever  appropriate,  the  masculine  pronoun shall
include the feminine pronoun and the singular shall include the plural.

     3.01 "Affiliate"  means the Thrift and Bank and such other  subsidiaries or
affiliates of the Holding Company which, with the consent of the Board, agree to
participate in this Plan.

     3.02  "Bank" shall mean Citizens National Bank of Madison.

     3.03 "Beneficiary" means the person or persons designated by a Recipient to
receive any  benefits  payable  under the Plan in the event of such  Recipient's
death.  Such person or persons shall be designated in writing on forms  provided
for this  purpose  by the  Committee  and may be  changed  from  time to time by
similar  written  notice  to  the  Committee.   In  the  absence  of  a  written
designation,  the Beneficiary shall be the Recipient's surviving spouse, if any,
or, if none, his estate.

     3.04 "Board"  means the Board of Directors of the Holding  Company or of an
Affiliate.

     3.05  "Committee"  means the Stock  Compensation  Committee of the Board of
Directors of the Holding Company. At all times during its administration of this
Plan,  the  Committee  shall  consist of two or more  directors  of the  Holding
Company,  each of whom shall be a "Non-Employee  Director" within the meaning of
the  definition  of that term  contained  in  Regulation  16b-3  ("Rule  16b-3")
promulgated  under the  Securities  Exchange Act of 1934,  as amended (the "1934
Act").

     3.06 "Common Stock" means shares of the common stock, without par value, of
the Holding Company.

     3.07  "Conversion"  shall mean the conversion of the Thrift from the mutual
to stock form of organization and the simultaneous  acquisition of the Thrift by
the Holding Company.

     3.08 "Director" means a member of the Board of Directors of an Affiliate or
the Holding Company.

     3.09 "Director  Emeritus" shall mean an honorary  non-voting  member of the
Board of Directors of an Affiliate or the Holding Company.

     3.10  "Disability"  means any physical or mental impairment which qualifies
an Employee for disability  benefits under the applicable  long-term  disability
plan maintained by an Affiliate.

     3.11  "Employee"  means any person,  including  officers,  who is currently
employed by the the Holding  Company or an Affiliate  and shall also include the
Secretary of the Thrift.

     3.12    "Holding Company" shall mean River Valley Bancorp.

     3.13  "Outside  Director"  means a member of the Board of  Directors of the
Holding Company, who is not also an Employee.

     3.14  "Plan  Shares"  means  shares of Common  Stock  held in the Trust and
issued or issuable to a Recipient pursuant to the Plan.

     3.15 "Plan Share Award" or "Award" means a right granted under this Plan to
earn Plan Shares.

     3.16 "Plan  Share  Reserve"  means the  shares of Common  Stock held by the
Trustee pursuant to Sections 5.03 and 5.04.

     3.17  "Recipient"  means an Employee or Director  who receives a Plan Share
Award under the Plan.

     3.18  "Retirement"  as to an Employee,  means a  termination  of employment
which constitutes a "retirement" under any applicable  qualified pension benefit
plan maintained by the Affiliate  which employs the Recipient,  or, if such plan
is not applicable,  which would constitute "retirement" under such plan were the
Recipient  covered by such plan and, as to a Director,  means a retirement  from
service on the Board after attaining age 70.

     3.19  "Subsidiary  Director"  shall  mean  a  non-employee  director  of an
Affiliate who is not an Outside Director.

     3.20  "Thrift"   shall  mean  Madison   First  Federal   Savings  and  Loan
Association.

     3.21 "Trustee"  means that  person(s) or entity  nominated by the Committee
and approved by the Board pursuant to Sections 4.01 and 4.02 to hold legal title
to the Plan assets for the purposes set forth herein.

                                   ARTICLE IV
                           ADMINISTRATION OF THE PLAN

     4.01 Role of the Committee.  The Plan shall be administered and interpreted
by the Committee, which shall have all of the powers allocated to it in this and
other Sections of the Plan. The interpretation and construction by the Committee
of any provisions of the Plan or of any Plan Share Award granted hereunder shall
be final and binding.  The Committee  shall act by vote or written  consent of a
majority of its members.  Subject to the express  provisions and  limitations of
the Plan, the Committee may adopt such rules,  regulations  and procedures as it
deems  appropriate  for the conduct of its affairs.  If permitted by  applicable
law,  the  Committee,  with the  consent of  Recipients  may change the  vesting
schedule  for  Awards  after  the date of grant  thereof.  The  Committee  shall
recommend  to the Board one or more  persons  or  entities  to act as Trustee in
accordance  with the  provisions of this Plan and Trust and the terms of Article
VIII hereof.

     4.02 Role of the Board.  The members of the Committee and the Trustee shall
be  appointed  or approved  by, and will serve at the  pleasure of, the Board of
Directors of the Holding Company.  The Board of Directors of the Holding Company
may in its discretion  from time to time remove members from, or add members to,
the Committee, and may remove, replace or add Trustees.

     4.03 Limitation on Liability.  Neither a Director nor the Committee nor the
Trustee shall be liable for any determination made in good faith with respect to
the Plan or any Plan Shares or Plan Share Awards granted under it. If a Director
or the  Committee or any Trustee is a party or is  threatened to be made a party
to any  threatened,  pending or completed  action,  suit or proceeding,  whether
civil, criminal,  administrative or investigative, by reason of anything done or
not done by him in such capacity  under or with respect to the Plan, the Holding
Company shall  indemnify  such person  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by him in connection  with such action,  suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in the best interests
of the Holding  Company and its  Affiliates  and,  with  respect to any criminal
action or proceeding,  if he had no reasonable  cause to believe his conduct was
unlawful.  The  indemnification of officers and directors of the Thrift pursuant
to this Section 4.03 shall be subject to 12 C.F.R ss. 545.121.

                                    ARTICLE V

                        CONTRIBUTION; PLAN SHARE RESERVE

     5.01 Amount and Timing of Contributions.  The Affiliates shall be permitted
to  contribute  to the Trust an amount  sufficient  to  purchase up to 4% of the
shares of Common  Stock  issued by the Holding  Company in  connection  with the
Conversion.  Such  amounts  shall be paid to the  Trustee no later than the date
required to purchase  shares of Common Stock for Awards made under this Plan. No
contributions by Employees or Directors shall be permitted.

     5.02 Initial  Investment.  Any amounts held by the Trust until such amounts
are invested in accordance  with Section 5.03,  shall be invested by the Trustee
in such  interest-bearing  account or accounts at the  Affiliates as the Trustee
shall determine to be appropriate.

     5.03 Investment of Trust Assets; Creation of Plan Share Reserve. As soon as
practicable  following  the first  shareholder  meeting of the  Holding  Company
following  the  Conversion,  which shall be held no earlier  than six (6) months
following the Conversion ("First  Shareholder  Meeting Date"), the Trustee shall
invest all of the Trust's  assets  exclusively in the number of shares of Common
Stock designated by the Holding Company and the Affilitates as subject to Awards
made under this Plan, which may be purchased  directly from the Holding Company,
on the open market, or from any other source; provided,  however, that the Trust
shall not invest in an amount of Common Stock greater than 4.0% of the shares of
the Common Stock sold in the Conversion,  which shall constitute the "Plan Share
Reserve" and provided,  further that if the Trustee is required to purchase such
shares on the open  market or from the  Holding  Company for an amount per share
greater  than the price per share at which  shares were  trading on the date the
contributions  therefor were made to the Trust,  the Holding  Company shall have
the discretion to reduce the number of shares to be awarded and  purchased.  The
Trust may hold cash in  interest-bearing  accounts pending  investment in Common
Stock for  periods  of not more than one year after  deposit.  The  Trustee,  in
accordance with applicable rules and regulations and Section 5.01 hereof,  shall
purchase  shares  of  Common  Stock in the open  market  and/or  shall  purchase
authorized  but  unissued  shares of the Common  Stock from the Holding  Company
sufficient to acquire the requisite  percentage of shares. Any earnings received
or  distributions  paid with  respect  to Common  Stock  held in the Plan  Share
Reserve shall be held in an interest-bearing  account.  Any earnings received or
distributions  paid with respect to Common  Stock  subject to a Plan Share Award
shall  be  held in an  interest-bearing  account  on  behalf  of the  individual
Recipient.

     5.04  Effect of  Allocations,  Returns  and  Forfeitures  Upon  Plan  Share
Reserves.  Upon the allocation of Plan Share Awards under Sections 6.02 and 6.03
after  acquisition  by the  Trustee  of  such  shares,  or the  decision  of the
Committee to return Plan Shares to the Holding  Company,  the Plan Share Reserve
shall be reduced by the number of Plan  Shares so  allocated  or  returned.  Any
shares  subject to an Award which may not be earned  because of a forfeiture  by
the  Recipient  pursuant to Section  7.01 shall be returned  (added) to the Plan
Share Reserve.

                                   ARTICLE VI

                            ELIGIBILITY; ALLOCATIONS

     6.01  Eligibility.  Employees  and  Subsidiary  Directors  are  eligible to
receive  Plan Share  Awards  provided in Section  6.02.  Outside  Directors  are
eligible to receive Plan Share Awards provided for in Section 6.03.

     6.02  Allocations.  The Committee may determine  which of the Employees and
Subsidiary Directors referenced in Section 6.01 above will be granted Plan Share
Awards and the number of Plan  Shares  covered by each Award,  including  grants
effective upon the First Shareholder Meeting Date, provided,  however,  that the
number of Plan  Shares  covered by such Awards may not exceed the number of Plan
Shares in the Plan Share Reserve  immediately prior to the grant of such Awards,
and  provided  further,  that in no event  shall any  Awards be made  which will
violate the Articles of Incorporation,  Articles of Association, Charter, Bylaws
or Plan of Conversion of the Holding Company or the Affiliates or any applicable
federal or state law or regulation  and provided  further that Awards may not be
granted  at any time in  which  the  Affiliates  fail to meet  their  applicable
minimum  capital  requirements.  In the event Plan Shares are  forfeited for any
reason and unless the Committee decides to return the Plan Shares to the Holding
Company,  the Committee may, from time to time, determine which of the Employees
or  Subsidiary  Directors  referenced  in  Section  6.01  above  will be granted
additional  Plan Share  Awards to be awarded  from  forfeited  Plan  Shares.  In
selecting those Employees or Subsidiary Directors to whom Plan Share Awards will
be granted and the number of Plan Shares  covered by such Awards,  the Committee
shall consider the position and  responsibilities  of the eligible Employees and
Subsidiary Directors,  the length and value of their services to the Affiliates,
the compensation paid to such Employees and Subsidiary Directors,  and any other
factors the Committee may deem relevant.

     6.03 Allocations - Outside Directors. The following Outside Directors shall
be awarded a Plan Share Award on the First Shareholder Meeting Date, assuming he
or she is still serving as an Outside Director on such date, equal to the number
of whole  shares  rounded  down to the nearest  whole  number  constituting  the
following  percentage  of the  number of shares  of Common  Stock  issued in the
Conversion (the "Fixed Award");  provided,  however,  that the Affiliates  shall
have the  discretion  to reduce such  percentages  if the Trustee is required to
purchase shares on the open market or from the Holding Company for an amount per
share  greater  than  the  price  per  share  at  which  shares  are sold in the
Conversion:

                                                 Percentage of Shares
       Outside Director                          Issued in Conversion
       --------------------------------------------------------------
      Fred W. Koehler                                    .20%
      Michael J. Hensley                                 .20%
      Cecil L. Dorten                                    .20%
      Earl W. Johann                                     .20%
      Jonnie L. Davis                                    .15%

     6.04 Form of Allocation.  As promptly as practicable  after a determination
is made  pursuant to Section 6.02 or 6.03 that a Plan Share Award is to be made,
the  Committee  shall notify the Recipient in writing of the grant of the Award,
the number of Plan  Shares  covered  by the Award,  and the terms upon which the
Plan Shares subject to the Award may be earned.  The stock certificates for Plan
Share Awards shall be registered in the name of the Recipient until forfeited or
transferred  by the  Recipient  after such Award has been earned.  The Committee
shall maintain records as to all grants of Plan Share Awards under the Plan.

     6.05 Allocations Not Required.  Notwithstanding anything to the contrary in
Sections 6.01 and 6.02, no Employee or Subsidiary  Director shall have any right
or entitlement to receive a Plan Share Award hereunder, such Awards being at the
total  discretion  of the  Committee,  nor shall  the  Employees  or  Subsidiary
Directors as a group have such a right. No Outside Director shall have any right
or entitlement to reserve a Plan Share Award  hereunder,  except as provided for
in Section 6.03 hereof.  The Committee  may, with the approval of the Board (or,
if so directed by the Board,  shall)  return all Common  Stock in the Plan Share
Reserve not yet allocated to the Holding  Company at any time, and cease issuing
Plan Share Awards.

     6.06. Distribution Election Before Plan Shares Are Earned.  Notwithstanding
anything  contained in the Plan to the  contrary,  an Employee or a Director who
has  received an  allocation  of Plan Shares in  accordance  with Article VI may
request in writing that the Committee  authorize the  distribution to him or her
of all or a portion of the Plan Shares awarded before the date on which the Plan
Shares become earned in accordance  with Article VII. The decision as to whether
to  distribute  to any Employee or Director who requests  distribution  shall be
made by the Committee,  in its sole  discretion.  In addition,  the distribution
shall be subject to the following parameters:

                  (a)  The  Committee  shall  be  required  to  make a  separate
         determination  for each request received by an Employee or Director for
         distribution.

                  (b) Any Plan Shares awarded shall be required to have a legend
         on the Plan  Shares  confirming  that the Plan  Shares  are  subject to
         restriction  and transfer in accordance with the terms set forth in the
         Plan.  This  legend  may not be  removed  until  the date that the Plan
         Shares become earned in accordance with Article VII.

               (c) The Plan Shares  distributed shall be voted by the Trustee in
          accordance  with  Section 7.04 until the date that the Plan Shares are
          earned.

                  (d) Any cash dividends or other cash  distributions  paid with
         respect to the Plan  Shares  before  the date that the Plan  Shares are
         earned  shall be paid to the  Trustee  to be held for the  Employee  or
         Director,  whichever is applicable, until the date that the Plan Shares
         are earned.

                  (e) At the  date on which  the Plan  Shares  are  earned,  the
         Trustee  may   withhold   from  any  cash   dividends   or  other  cash
         distributions  held on behalf of such  Employee or Director  the amount
         needed to cover any applicable withholding and employment taxes arising
         at the time that the Plan Shares are earned. If the amount of such cash
         dividends or distributions is insufficient, the Trustee may require the
         Employee or  Director  to pay to the Trustee the amount  required to be
         withheld as a condition of removing the legend on the Plan Shares.


                                   ARTICLE VII
             EARNING AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS

     7.01  Earning Plan Shares; Forfeitures.

          (a)  General Rules. Plan Shares subject to an Award shall be earned by
               a Recipient at the rate of twenty  percent (20%) of the aggregate
               number  of  Shares  covered  by the Award at the end of each full
               twelve months of consecutive  service with the Holding Company or
               the Affiliate  after the date of grant of the Award.  If the term
               of  service  of a  Recipient  terminates  as  an  Employee,  as a
               Director,   and  as  a  Director  Emeritus  prior  to  the  fifth
               anniversary (or such later date as the Committee shall determine)
               of the  date of  grant  of an Award  for any  reason  (except  as
               specifically  provided in Subsection (b) below or in Section 4.01
               hereof), the Recipient shall forfeit the right to earn any Shares
               subject to the Award which have not theretofore been earned.

               In  determining  the  number of Plan  Shares  which  are  earned,
               fractional  shares  shall be rounded  down to the  nearest  whole
               number,  provided that such fractional shares shall be aggregated
               and earned, on the fifth anniversary of the date of grant.

          (b)  Exception  for   Terminations   due  to  Death  and   Disability.
               Notwithstanding  the general rule  contained  in Section  7.01(a)
               above,  all Plan  Shares  subject to a Plan Share Award held by a
               Recipient  whose term of service as an Employee and as a Director
               or Director  Emeritus with the Holding Company and the Affiliates
               terminates  due to death or Disability  shall be deemed earned as
               of the  Recipient's  last day of service with the Holding Company
               and the  Affiliates as a result of such death or  Disability.  If
               the  recipient's  service as an  Employee  and as a  Director  or
               Director Emeritus terminates due to Disability within one year of
               the effective  date of the  Conversion,  the Shares earned by the
               Receipent  may not be  disposed  of by the  Recipient  during the
               one-year period following the Conversion,  and stock  certificate
               legends to that  effect  may be placed on the stock  certificates
               for any such shares.

          (c)  Revocation for Misconduct.  Notwithstanding  anything hereinafter
               to the contrary,  the Board may by resolution immediately revoke,
               rescind and terminate any Plan Share Award,  or portion  thereof,
               previously  awarded  under this Plan,  to the extent  Plan Shares
               have not been delivered  thereunder to the Recipient,  whether or
               not yet earned, in the case of an Employee who is discharged from
               the employ of the Holding  Company or an Affiliate  for cause (as
               hereinafter  defined),  or who is discovered after termination of
               employment  to have engaged in conduct that would have  justified
               termination  for cause or,  in the case of an  Outside  Director,
               Director Emeritus,  or Subsidiary  Director,  who is removed from
               the Board of Directors of the Holding Company or an Affiliate for
               cause  (as  hereinafter  defined),  or  who is  discovered  after
               termination of service as an Outside Director, Director Emeritus,
               or  Subsidiary  Director to have  engaged in conduct  which would
               have justified removal for cause.  "Cause" is defined as personal
               dishonesty,  willful  misconduct,  any breach of  fiduciary  duty
               involving personal profit,  intentional failure to perform stated
               duties,  or the willful  violation of any law,  rule,  regulation
               (other than  traffic  violations  or similar  offenses)  or order
               which  results in a loss to the Holding  Company or any Affiliate
               or in a final cease and desist order.

     7.02 Accrual of Dividends.  Whenever Plan Shares are paid to a Recipient or
Beneficiary  under Section 7.03,  such  Recipient or  Beneficiary  shall also be
entitled to receive,  with  respect to each Plan Share paid,  an amount equal to
any cash dividends or cash  distributions and a number of shares of Common Stock
equal to any stock  dividends,  and any other asset  distributions  declared and
paid with  respect to a share of Common  Stock  between the date the Plan Shares
are being  distributed  and the date the Plan Shares were  granted.  There shall
also be distributed an appropriate amount of net earnings,  if any, of the Trust
with respect to any cash dividends or cash  distributions so paid out. Until the
Plan Shares are vested and  distributed  to any such  Recipient or  Beneficiary,
such  dividends,  distributions  and net  earnings  thereon,  if any,  shall  be
retained by the Trust.

     7.03  Distribution of Plan Shares.

          (a)  Timing of  Distributions:  General  Rule.  Except as  provided in
               Subsection  (b) below,  Plan Shares shall be  distributed  to the
               Recipient  or his  Beneficiary,  as the case  may be,  as soon as
               practicable after they have been earned.

          (b)  Timing:   Exception   for   10%   Stockholders.   Notwithstanding
               Subsection (a) above, no Plan Shares may be distributed  prior to
               the date which is five (5) years from the  effective  date of the
               Conversion  to the extent the  Recipient or  Beneficiary,  as the
               case may be, would after  receipt of such shares own in excess of
               ten (10) percent of the issued and  outstanding  shares of Common
               Stock.  Any Plan Shares  remaining unpaid solely by reason of the
               operation of this  Subsection  (b) shall be paid to the Recipient
               or his  Beneficiary  on the date which is five (5) years from the
               effective date of the Conversion.

          (c)  Form of Distribution.  All Plan Shares,  together with any shares
               representing stock dividends, shall be distributed in the form of
               Common  Stock.  One share of Common Stock shall be given for each
               Plan Share earned and payable.  Payments representing accumulated
               cash  dividends  and cash or other  distributions  (and  earnings
               thereon)  shall be made in cash or in the  form of such  non-cash
               distributions.

         (d)  Withholding.   The  Trustee  may  withhold  from  any  payment  or
              distribution  made under this Plan  sufficient  amounts of cash or
              shares of Common  Stock to cover any  applicable  withholding  and
              employment   taxes,   and  if  the  amount  of  such   payment  is
              insufficient, the Trustee may require the Recipient or Beneficiary
              to pay to the  Trustee  the amount  required  to be  withheld as a
              condition  of  delivering  the  Plan  Shares.   Alternatively,   a
              Recipient may pay to the Trustee that amount of cash  necessary to
              be  withheld  in taxes in lieu of any  withholding  of payments or
              distribution  under the Plan.  The  Trustee  shall pay over to the
              Holding  Company,  or the Affiliate which employs or employed such
              Recipient  any such amount  withheld from or paid by the Recipient
              or Beneficiary.

         (e)  Cessation of Payment.  The Trustee shall cease payment of benefits
              to Recipients or, if applicable,  their Beneficiaries in the event
              of the Bank's or Thrift's insolvency.  The Bank or Thrift shall be
              considered  insolvent  for  purposes  of this  RRP if the  Bank or
              Thrift  is  unable  to pay its  debts as they  become  due or if a
              receiver is appointed for the Bank or Thrift under applicable law.
              If payments cease by reason of this  subsection,  payments will be
              resumed,  with  appropriate  make-up  payments,  once  the Bank or
              Thrift  ceases to be insolvent but only to the extent the payments
              were  not  made  directly  by  the  Bank,   the  Thrift  or  their
              Affiliates.

     7.04 Voting of Plan  Shares.  All shares of Common  Stock held by the Trust
shall be voted by the  Trustee,  taking into  account the best  interests of the
Plan Share Award recipients.

                                  ARTICLE VIII
                                      TRUST

     8.01 Trust. The Trustee shall receive,  hold,  administer,  invest and make
distributions and disbursements from the Trust in accordance with the provisions
of the  Plan  and  Trust  and the  applicable  directions,  rules,  regulations,
procedures and policies established by the Committee pursuant to the Plan.

     8.02  Management  of Trust.  It is the intent of this Plan and Trust  that,
subject  to the  provisions  of this  Plan,  the  Trustee  shall  have  complete
authority and discretion with respect to the management,  control and investment
of the Trust, and that the Trustee shall invest all assets of the Trust,  except
those attributable to cash dividends paid with respect to Plan Shares, in Common
Stock to the  fullest  extent  practicable,  and except to the  extent  that the
Trustee  determines  that the holding of monies in cash or cash  equivalents  is
necessary to meet the obligation of the Trust.  Neither the Holding  Company nor
any Affiliate  shall  exercise any direct or indirect  control or influence over
the time when, or the prices at which, the Trustee may purchase such shares, the
number of shares  to be  purchased,  the  manner in which the  shares  are to be
purchased, or the broker (if any) through whom the purchases may be executed. In
performing  its duties,  the  Trustee  shall have the power to do all things and
execute such  instruments  as may be deemed  necessary or proper,  including the
following powers:

         (a)  To invest up to one hundred  percent (100%) of all Trust assets in
              Common Stock  without  regard to any law now or hereafter in force
              limiting  investments  for  Trustees  or  other  fiduciaries.  The
              investment  authorized herein and in paragraph (b) constitutes the
              only investment of the Trust, and in making such  investment,  the
              Trustee is  authorized  to purchase  Common Stock from the Holding
              Company or an Affiliate or from any other source,  and such Common
              Stock so purchased may be outstanding,  newly issued,  or treasury
              shares.

         (b)  To invest any Trust assets not  otherwise  invested in  accordance
              with (a)  above in such  deposit  accounts,  and  certificates  of
              deposit  (including  those issued by an Affiliate),  securities of
              any  open-end  or  closed-end  management  investment  company  or
              investment trust  registered  under the Investment  Company Act of
              1940,  whether or not the Trustee or any  affiliate of the Trustee
              is being  compensated  for  providing  services to the  investment
              company or trust as investment  advisor or otherwise,  obligations
              of the United  States  government  or its  agencies  or such other
              investments as shall be considered the equivalent of cash.

         (c) To sell,  exchange or otherwise dispose of any property at any time
held or acquired by the Trust.

         (d)  To cause stocks, bonds or other securities to be registered in the
              name of a nominee,  without the addition of words  indicating that
              such security is an asset of the Trust (but accurate records shall
              be  maintained  showing  that  such  security  is an  asset of the
              Trust).

         (e)  To hold cash  without  interest  in such  amounts as may be in the
              opinion of the Trustee  reasonable for the proper operation of the
              Plan and Trust and to hold cash pending investment.

         (f) To employ brokers, agents, custodians, consultants and accountants.

     (g) To hire counsel to render advice with respect to their  rights,  duties
and obligations  hereunder,  and such other legal services or  representation as
they may deem desirable.

     (h) To hold funds and securities representing the amounts to be distributed
to a Recipient or his or her Beneficiary as a consequence of a dispute as to the
disposition  thereof,  whether in a  segregated  account or held in common  with
other assets of the Trust.

     Notwithstanding  anything  herein  contained to the  contrary,  the Trustee
shall not be required to make any  inventory,  appraisal or settlement or report
to any  court,  or to secure  any order of court for the  exercise  of any power
herein contained, or give bond.

     8.03 Records and Accounts. The Trustee shall maintain accurate and detailed
records and accounts of all transactions of the Trust,  which shall be available
at all reasonable  times for inspection by any legally entitled person or entity
to the extent required by applicable law, or any other person  determined by the
Committee.

     8.04 Earnings. All earnings,  gains and losses with respect to Trust assets
shall be allocated,  in accordance  with a reasonable  procedure  adopted by the
Committee,  to bookkeeping  accounts for Recipients or to the general account of
the Trust,  depending on the nature and allocation of the assets generating such
earnings,  gains and losses.  In  particular,  any earnings on cash dividends or
distributions received with respect to shares of Common Stock shall be allocated
to accounts for Recipients,  if such shares are the subject of outstanding  Plan
Share  Awards,  or otherwise  to the Plan Share  Reserve.  Recipients  (or their
Beneficiaries)  shall not be  entitled  to any such  allocations  until the Plan
Share Awards to which they relate are vested and distributed to those Recipients
(or their Beneficiaries).

     8.05  Expenses.  All costs  and  expenses  incurred  in the  operation  and
administration of this Plan,  including those incurred by the Trustee,  shall be
borne by the Affiliates or the Holding Company.

     8.06 Indemnification.  The Holding Company shall indemnify, defend and hold
the Trustee harmless against all claims, expenses and liabilities arising out of
or related to the  exercise of the  Trustee's  powers and the  discharge  of its
duties  hereunder,  unless  the same shall be due to its  negligence  or willful
misconduct.

                                   ARTICLE IX
                                  MISCELLANEOUS

     9.01 Adjustments for Capital  Changes.  The aggregate number of Plan Shares
available  for  issuance  pursuant to the Plan Share  Awards  (which,  as of the
effective date of this Plan,  shall not exceed,  4% of the shares of the Holding
Company's  Common Stock issued in the  Conversion),  and the number of shares to
which any Plan Share Award  relates  shall be  proportionately  adjusted for any
increase or decrease in the total number of  outstanding  shares of Common Stock
issued  subsequent to the effective  date of the Plan  resulting  from any stock
dividend   or  split,   recapitalization,   merger,   consolidation,   spin-off,
reorganization,  combination  or exchange of shares,  or other  similar  capital
adjustment,  or other  increase  or decrease  in such  shares  effected  without
receipt or payment of consideration, by the Committee.

     9.02 Amendment and  Termination  of Plan. The Board may, by resolution,  at
any time amend or  terminate  the Plan.  The power to amend or  terminate  shall
include the power to direct the Trustee to return to the Holding  Company all or
any part of the assets of the Trust,  including  shares of Common  Stock held in
the Plan  Share  Reserve,  as well as shares of  Common  Stock and other  assets
subject to Plan Share  Awards  but not yet  earned by the  Employees  or Outside
Directors or  Subsidiary  Directors  to whom they are  allocated.  However,  the
termination  of  the  Trust  shall  not  affect  a  Recipient's   right  to  the
distribution  of Common  Stock  relating to Plan Share  Awards  already  earned,
including  earnings  thereon,  in accordance with the terms of this Plan and the
grant by the Committee.

     9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall not
be  transferable  by a  Recipient  other than by will or the laws of descent and
distribution or pursuant to a qualified  domestic  relations order as defined by
the  Internal  Revenue  Code of 1986,  as  amended,  or Title I of the  Employee
Retirement Income Security Act, or the rules thereunder, and during the lifetime
of the  Recipient,  Plan Shares may only be earned by and paid to the  Recipient
who was  notified in writing of the Award by the  Committee  pursuant to Section
6.04.  The  assets of the RRP,  prior to the  distribution  of Plan  Shares to a
Recipient or his or her Beneficiary, shall be subject to the claims of creditors
of the Bank and/or the Thrift.  Unless Plan Shares are distributed in accordance
with  Section  6.06 or  7.03  to a  Recipient  or his or her  Beneficiary,  such
Recipient or, if applicable, Beneficiary shall not have any right in or claim to
any specific assets of the RRP or Trust and shall only be an unsecured  creditor
of the Bank and/or the Thrift,  nor shall any  Affiliate be subject to any claim
for benefits hereunder.

     9.04  Employment  Rights.  Neither  the Plan nor any grant of a Plan  Share
Award  or Plan  Shares  hereunder  nor any  action  taken  by the  Trustee,  the
Committee or the Board in connection with the Plan shall create any right on the
part of any  Employee  to  continue  in the  employ  of, or of any  Director  to
continue in the service of, the Holding Company or any Affiliate thereof.

     9.05 Voting and  Dividend  Rights.  No  Recipient  shall have any voting or
dividend  rights or other rights of a stockholder  in respect of any Plan Shares
covered by a Plan Share Award, except as expressly provided in Sections 7.02 and
7.04 above, prior to the time said Plan Shares are actually distributed to him.

     9.06  Governing  Laws.  The Plan and Trust shall be governed by the laws of
the State of Indiana,  except to the extent  governed by federal law,  including
regulations of the Office of Thrift Supervision.  In particular,  grants of Plan
Share  Awards  under the Plan shall  comply with the  requirements  of 12 C.F.R.
ss.563b.3(g)(4)(vi) as long as those requirements are in effect. That regulation
currently  requires that no  individual  shall receive more than 25% of the Plan
Share Awards available for grant under the Plan and Outside  Directors shall not
receive  Plan  Share  Awards  for  more  than  5%  individually,  or  30% in the
aggregate, of the Plan Share Awards available for grant under the Plan.

     9.07  Effective  Date.  This Plan shall be  effective as of the date of its
approval by the shareholders of the Holding Company.

     9.08 Term of Plan.  This Plan shall  remain in effect  until the earlier of
(1) 21 years from its effective  date, (2)  termination by the Board, or (3) the
distribution  of all  assets of the  Trust.  Termination  of the Plan  shall not
affect any Plan Share Awards  previously  granted,  and such Awards shall remain
valid and in effect  until  they have been  earned and paid,  or by their  terms
expire or are forfeited.

     9.09 Tax Status of Trust. It is intended that the trust established  hereby
be treated as a grantor trust of the Holding  Company and the  Affiliates  under
the provisions of Section 671, et seq., of the Internal Revenue Code of 1986, as
amended.

     9.10.  Compensation.  The Trustee  shall be  entitled  to receive  fair and
reasonable  compensation for its services hereunder, as agreed to by the Trustee
and the Holding  Company,  and shall also be entitled to be  reimbursed  for all
reasonable  out-of-pocket  expenses,  including,  but not by way of  limitation,
legal,  actuarial and accounting expenses and all costs and expenses incurred in
prosecuting  or  defending  any action  concerning  the Plan or the Trust or the
rights or  responsibilities  of any person hereunder,  brought by or against the
Trustee. Such reasonable  compensation and expenses shall be paid by the Holding
Company or the Affiliates.

     9.11.  Resignation of Trustee. The Trustee may resign at any time by giving
sixty (60) calendar days' prior written notice to the Holding  Company,  and the
Trustee may be removed,  with or without cause,  by the Holding Company on sixty
(60)  calendar  days' prior  written  notice to the Trustee.  Such prior written
notice  may be  waived  by the  party  entitled  to  receive  it.  Upon any such
resignation  or removal  becoming  effective,  the Trustee  shall  render to the
Holding  Company a written  account  of its  administration  of the Plan and the
Trust  for the  period  since  the  last  written  accounting  and  shall do all
necessary  acts to transfer the assets of the Trust to the successor  Trustee or
Trustees.

     IN WITNESS  WHEREOF,  the Holding  Company and the Bank and the Thrift have
caused this Plan and Trust  Agreement  to be  executed by their duly  authorized
officers as of the ___ day of ____________, 1996.


                              River Valley Bancorp



                                       By
                                          James E. Fritz, President
                                          and Chief Executive Officer




                                      Madison First Federal Savings
                                          and Loan Association



                                       By
                                          James E. Fritz, President
                                          and Chief Executive Officer




                                      Citizens National Bank of Madison



                                       By
                                          Robert D. Hoban, President

     IN WITNESS WHEREOF, I, Carmen Walch, Trust Officer,  execute this agreement
for and on behalf of the Trustee, accepting and binding the Trustee to undertake
and perform the obligations  and duties of the Trustee  hereunder and consenting
to the foregoing Plan and Trust Agreement.



                                        First Bankers Trust Company



                                       By
                                            Carmen Walch
                                            Trust Officer