Document:

rvb_8k1120ex103.htm

    Exhibit
      10.3

    
 

    AMENDED
      AND RESTATED

    EMPLOYMENT
      AGREEMENT

    

    

    THIS
      AGREEMENT entered into and effective this 20th day of November, 2007, by and
      between River Valley Financial Bank, a federal savings bank (the “Bank”), and
      John Muessel (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 ___________, 2002 (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 its Vice President/Trust Officer 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 Vice President/Trust Officer 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.           (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.  Upon the Employee’s attainment of age 55 during the term of
      this Agreement, the Bank agrees to pay 50% of the cost of family coverage under
      the Bank’s group insurance plan, and an additional 2.5% of the cost of family
      coverage each year thereafter until the Employee reaches age 65 or his earlier
      death or Disability (as defined in Section 9(b) hereof), at which point the
      Bank
      shall no longer pay the cost of such insurance coverage; provided, however,
      that
      such coverage need not be provided from and after a time that the Employee
      is
      terminated by the Bank for Just Cause as provided in Section 9(c).

    

    (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, 2008 (or such earlier date as is determined in
      accordance with Section 9).  Additionally, on 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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (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 forty 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
      twenty 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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (b)  Disability.

    

    (1)           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.

    

    (2)           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.

    

    (1)           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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (2)           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 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.

    

    (3)           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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (e)           Termination
      or Suspension Under Federal Law.

    

    (1)           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.

    

    (2)           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.

    

    (3)           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.

    

    (4)           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); provided, however, that if Employee attains age 55 while employed
      hereunder, he shall be entitled to the group insurance benefits until age 65
      provided for in Section 3(a) hereof as provided therein following such voluntary
      termination of employment.

    

    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.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    11.           Change
      in Control.

    

    (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.

    

    (i)  If
      on or
      before the Change in Control the Bank or its successor in interest offers to
      continue the employment of Employee as Vice President/Trust Officer 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 Vice President/Trust
      Officer (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 12 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 12 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 Vice President/Trust Officer
      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 Vice
      President/Trust Officer (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
      12
      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 12-month period or does not honor those requirements for at least
      12
      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 12 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 12-month period
      for Just Cause as defined in Section 9(c) or as a result of the Employee’s
      death, Disability or voluntary resignation.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (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.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    (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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    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.

    

    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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (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.

    

    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.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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.

    

    (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 twelve (12) 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
      twelve (12) 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), 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/
                John
                Muessel
	 	 	
                John
                  Muessel

              

      

    

    
 

    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

              
	 	 	 	 

      

      
 

       

       

       

      15rvb_8k1120ex104.htm

    Exhibit
      10.4

    
 

    AMENDED
      AND RESTATED

    DIRECTOR
      DEFERRED COMPENSATION MASTER AGREEMENT

     

    This
      Director Deferred Compensation Master Agreement (the “Agreement”), originally
      effective as of the 1st day of November, 1993, is hereby amended and restated
      effective January 1, 2005 and formalizes the understanding by and between
      RIVER VALLEY FINANCIAL BANK (formerly known as MADISON FIRST FEDERAL SAVINGS
      & LOAN ASSOCIATION) (the “Bank”), a federally chartered savings and loan,
      and certain eligible Directors, hereinafter referred to as “Director”, who shall
      be approved by the Bank to participate and who shall elect to become a party
      to
      this Amended and Restated Director Deferred Compensation Master Agreement by
      execution of a Director Deferred Compensation Joinder Agreement (“Joinder
      Agreement”) in a form provided by the Bank.

     

    WITNESSETH:

     

    WHEREAS,
      the Directors serve the Bank as members of the Board; and

     

    WHEREAS,
      the Bank recognizes the valuable services heretofore performed for it by such
      Directors and wishes to encourage continued service of each; and

     

    WHEREAS,
      the Bank values the efforts, abilities and accomplishments of such Directors
      and
      recognizes that the Directors’ services will substantially contribute to its
      continued growth and profits in the future; and

     

    WHEREAS,
      these Directors wish to defer a certain portion of their fees to be earned
      in
      the future; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      the Directors and the Bank desire to formalize the terms and conditions upon
      which the Bank shall pay such deferred compensation to the Directors or their
      designated beneficiaries; and

     

    WHEREAS,
      the Bank has been advised by legal counsel of the need to amend the Agreement
      effective January 1, 2005 to comply with the requirements of Section 409A
      of the Internal Revenue Code of 1986, as amended (the “Code”); and

     

    WHEREAS,
      the Bank has amended and restated this Director Deferred Compensation Master
      Agreement which controls all issues relating to the Deferred Compensation
      Benefit as described herein;

     

    NOW,
      THEREFORE, in consideration of the mutual promises herein contained,
      the parties hereto agree to the following terms and conditions:

     

    SECTION
      I

     

    DEFINITIONS

     

    When
      used
      herein, the following words and phrases shall have the meanings below unless
      the
      context clearly indicates otherwise:

     

    
      
        	
                1.1

              	
                “Bank”
                  means RIVER VALLEY FINANCIAL BANK (formerly known as MADISON FIRST
                  FEDERAL
                  SAVINGS & LOAN ASSOCIATION) and any successor
                  thereto.

              

      

       

      
        	
                1.2

              	
                “Beneficiary”
                  means the person or persons (and their heirs) designated as Beneficiary
                  in
                  the Director’s Joinder Agreement to whom the deceased Director’s benefits
                  are payable. If no Beneficiary is so designated, then the Director’s
                  Spouse, if living, will be deemed the Beneficiary. If the Director’s
                  Spouse is not living, then the Children of the Director will be
                  deemed the
                  Beneficiaries and will take on a per stirpes basis. If there are
                  no living
                  Children, then the Estate of the Director will be deemed the
                  Beneficiary.

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	
                1.3

              	
                “Benefit
                  Age” shall be the birthday on which the Director becomes eligible to
                  receive benefits under the Plan. Such birthday shall be designated
                  in the
                  Director’s Joinder Agreement.

              

      

       

      
        	
                1.4

              	
                “Benefit
                  Eligibility Date” shall be the date on which a Director is entitled to
                  receive his Deferred Compensation Benefit. It shall be the 1st
                  day of the
                  month coincident with or next following the month in which the
                  Director
                  attains the Benefit Age designated in his Joinder
                  Agreement.

              

      

       

      
        	
                1.5

              	
                “Cause”
                  means personal dishonesty, willful misconduct, willful malfeasance,
                  breach
                  of fiduciary duty involving personal profit, intentional failure
                  to
                  perform stated duties, willful violation of any law, rule, regulation
                  (other than traffic violations or similar offenses), or final
                  cease-and-desist order, material breach of any provision of this
                  Agreement, or gross negligence in matters of material importance
                  to the
                  Bank.

              

      

       

      
        	
                1.6

              	
                “Children”
                  means the Director’s children, both natural and adopted, then living at
                  the time payments are due the Children under this
                  Agreement.

              

      

       

      
        	
                1.7

              	
                “Deferral
                  Period” means the period of months designated in the Director’s Joinder
                  Agreement during which the Director shall defer current Board fees.
                  The
                  Deferral Period shall commence on the date designated in the Director’s
                  Joinder Agreement.

              

      

       

      
        	
                1.8

              	
                “Deferred
                  Compensation Benefit” means the annuitized value of the Director’s
                  Elective Contribution Account, measured as of the Director’s Benefit Age,
                  payable in monthly installments throughout the Payout Period and
                  commencing on the Director’s Benefit Eligibility
                  Date.

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
                1.9

              	
                “Disability
                  Benefit” means the benefit annuity payable to the Director following a
                  determination in accordance with Subsection 4.2, that he is disabled
                  as provided in that Subsection.

              

      

       

      
        	
                1.10

              	
                “Effective
                  Date” of this Agreement shall be November 1, 1993.  The
                  Effective Date of the amendment and restatement of the Agreement
                  is
                  January 1, 2005.

              

      

       

      
        	
                1.11

              	
                “Elective
                  Contribution” shall refer to any bookkeeping entry required to record a
                  Director’s voluntary monthly pre-tax deferral which shall be made in
                  accordance with the Director’s Joinder
                  Agreement.

              

      

       

      
        	
                1.12

              	
                “Elective
                  Contribution Account” shall be represented by the bookkeeping entries
                  required to record a Director’s Elective Contributions plus accrued
                  interest, equal to the Interest Factor, earned to date on such
                  amounts.
                  However, neither the existence of such bookkeeping entries nor
                  the
                  Elective Contribution Account itself shall be deemed to create
                  either a
                  trust of any kind, or a fiduciary relationship between the Bank
                  and the
                  Director or any Beneficiary.

              

      

       

      
        	
                1.13

              	
                “Estate”
                  means the estate of the Director.

              

      

       

      
        	
                1.14

              	
                “Financial
                  Hardship” means a severe financial hardship to the Director resulting from
                  an illness or accident of the Director, the Director’s spouse, or a
                  dependent (as defined in Section 152(a) of the Code) of the Director,
                  loss of the Director’s property due to casualty, or other similar
                  extraordinary and unforeseeable circumstances arising as a result
                  of
                  events beyond the control of the
                  Director.

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	
                1.15

              	
                “Financial
                  Hardship Benefit” means a withdrawal or withdrawals of an amount or
                  amounts attributable to a Financial Hardship; provided, however
                  that,
                  consistent with regulations of the Internal Revenue Service, amounts
                  distributed with respect to a Financial Hardship may not exceed
                  the
                  amounts necessary to satisfy such emergency plus amounts necessary
                  to pay
                  taxes reasonably anticipated as a result of the distribution of
                  benefits
                  after taking into account the extent to which such Financial Hardship
                  is
                  or may be relieved through reimbursement or compensation by insurance
                  or
                  otherwise or by liquidation of the Director’s assets (to the extent the
                  liquidation of such assets would not itself cause a Financial
                  Hardship).

              

      

       

      
        	
                1.16

              	
                “Interest
                  Factor” means monthly compounding at Ten Percent (10%) per
                  annum.

              

      

       

      
        	
                1.17

              	
                “Payout
                  Period” means the time frame during which certain benefits payable
                  hereunder shall be distributed. Payments shall be made in equal
                  monthly
                  installments commencing on the first day of the month coincident
                  with or
                  next following the occurrence of the event which triggers distribution
                  and
                  continuing for a period of months, as designated in the Director’s Joinder
                  Agreement.

              

      

       

      
        	
                1.18

              	
                “Projected
                  Deferral” is an estimate, determined upon execution of a Joinder
                  Agreement, of the total amount to be deferred by the Director during
                  his
                  Deferral Period, and so designated in the Director’s Joinder
                  Agreement.

              

      

       

      
        	
                1.19

              	
                “Spouse”
                  means the individual to whom the Director is legally married at
                  the time
                  of the Director’s death.

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                1.20

              	
                “Survivor’s
                  Benefit” means an annuity stream payable to the Beneficiary in monthly
                  installments throughout the Payout Period, equal to the amount
                  designated
                  in the Joinder Agreement, and subject to Subsections 4.3 and 5.1
                  (or
                  5.2).

              

      

       

      
        	
                1.21

              	
                “Joinder
                  Agreement” shall mean an agreement in the form of Exhibit A hereto which
                  shall be completed and signed as of the Effective Date or, as to
                  Directors
                  who elect to participate in this Agreement after the Effective
                  Date, by
                  completing and signing such Joinder Agreement no later than the
                  December
                  31st preceding the January 1st as of which the deferral of fees
                  hereunder
                  shall be effective.  A director may change the amount of fees
                  deferred hereunder provided such change is made before the end
                  of the year
                  prior to the year in which the revised deferral is to be
                  effective.  Changes in the Payout Period and Benefit Age must be
                  in writing, at least twelve (12) months prior to the date of the
                  first
                  scheduled payment and shall not be effective earlier than twelve
                  (12)
                  months after the modification is made.  In addition, such
                  modification shall extend the deferral period for a period of at
                  least
                  five additional years from the date the distribution was scheduled
                  to
                  begin prior to such change.

              

      

       

      
        	
                1.22

              	
                “Change
                  in Control” shall mean

              

      

       

      
        	
                 

              	
                (a)

              	
                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 (b)).  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.

              

      

      

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        
          	
                   

                	
                  (b)

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

                

        

         

        
          	
                   

                	
                  (i)

                	
                  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.

                

        

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (ii)

                	
                  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.

                

        

         

        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 (a) of this
          section).

         

        
          	
                   

                	
                  (c)

                	
                  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 event occurs under this
                    subsection
                    (c) 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
                    -

                

        

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (i)

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

                

        

         

        
          	
                   

                	
                  (ii)

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

                

        

         

        
          	
                   

                	
                  (iii)

                	
                  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

                

        

         

        
          	
                   

                	
                  (iv)

                	
                  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
                    (c).

                

        

         

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

         

        
          	
                   

                	
                  (d)

                	
                  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.

                

        

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

        
          	
                  1.23

                	
                  “Separation
                    from Service” means with respect to a Director who is not also an employee
                    of the Bank the good faith and complete termination of such Director’s
                    relationship with the Bank as a member of its board of
                    directors.  A Director who is also an employee of the Bank shall
                    incur a “Separation from Service” only if he both incurs a good faith and
                    complete termination of his relationship with the Bank as a member
                    of its
                    board of directors and has a “termination of employment;” provided,
                    however, that the Director shall not be required to have a “termination of
                    employment” if this Plan is not required to be aggregated with any other
                    nonqualified deferred compensation plan of the Bank in which
                    the Director
                    participates as an employee under Section 409A of the
                    Code.  For purposes of this section, a “termination of
                    employment” means the termination of the individual’s employment with the
                    Bank for reasons other than death or disability.  Whether a
                    “termination of employment” takes place as determined based on the facts
                    and circumstances surrounding the termination of the individual’s
                    employment.  A “termination of employment” will be considered to
                    have occurred if it is reasonably anticipated that:  (a) the
                    individual will not perform any services for the Bank after the
                    termination of employment, or (b) the individual will continue
                    to provide
                    services to the Bank at an annual rate that is less than fifty
                    percent
                    (50%) of the bona fide services rendered during the immediately
                    preceding
                    twelve months of employment.

                

        

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

        SECTION
          II

         

        DEFERRED
          COMPENSATION

         

        Commencing
          on the Effective Date, and continuing through the end of the Deferral Period,
          the Director and the Bank agree that the Director shall defer into his
          Elective
          Contribution Account up to one hundred (100%) percent of the monthly fees
          that
          the Director would otherwise be entitled to receive from the Bank for each
          month
          of the Deferral Period, with the total deferral during the term of the
          Deferral
          Period not to exceed the Director’s Projected Deferral.  The specific
          amount of the Director’s monthly Deferred Compensation shall be designated in
          the Director’s Joinder Agreement and shall apply only to compensation
          attributable to services not yet performed.

         

        Except
          as
          otherwise provided below, a Director may elect to defer a portion of his
          Director Fees to be earned in a year by making an irrevocable election
          to do so
          before January 1 of that year.  If a Director is not otherwise
          eligible to participate in another individual account non-qualified deferred
          compensation plan, and he or she first becomes eligible to participate
          in this
          Agreement after January 1, 2005, the Director may irrevocably elect to
          defer a portion of his Director Fees to be earned by the Director in the
          same
          year (and after making the election) as long as the election is made within
          30
          days following the date the individual first becomes eligible to
          participate.  Thereafter, the timing of future deferral elections is
          governed by the second sentence of this paragraph.

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        SECTION
          III

         

        ADJUSTMENT
          OF DEFERRAL AMOUNT

         

        Deferral
          of the specific amount of fees designated in the Director’s Joinder Agreement
          shall continue in effect pursuant to the terms of this Agreement unless
          and
          until the Director amends his Joinder Agreement by filing with the Bank
          and the
          Administrator a Notice of Adjustment of Deferral Amount (Exhibit 13, of
          the
          Joinder Agreement). If the Bank increases the amount of fees earned by
          the
          Director, the Director can include such additional amounts in his monthly
          deferral, provided approval from the Board of Directors is obtained, by
          filing a
          Notice of Adjustment of Deferral Amount. A Notice of Adjustment of Deferral
          Amount shall be effective if filed with the Bank and the Administrator,
          at least
          thirty (30) days prior to any January 1st during the Director’s Deferral Period.
          Such Notice of Adjustment of Deferral Amount shall be effective commencing
          with
          the January 1st following its filing and shall be applicable only to
          compensation attributable to services not yet performed by the
          Director.

         

        SECTION
          IV

         

        RETIREMENT
          BENEFIT

         

        
          	
                  4.1

                	
                  Retirement
                    Benefit. Subject to Subsections 4.3 and 5.1 (or 5.2) of this
                    Agreement, the Bank agrees to pay the Director the Deferred Compensation
                    Benefit commencing on the Director’s Benefit Eligibility Date. Such
                    payments will be made over the term of the Payout Period. In
                    the event of
                    the Director’s death after commencement of the Deferred Compensation
                    Benefit, but prior to completion of all such payments due and
                    owing
                    hereunder, the Bank shall pay to the Director’s Beneficiary a continuation
                    of the annuity for the remainder of the Payout
                    Period.

                

        

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        
          	
                  4.2

                	
                  Disability
                    Benefit.  Notwithstanding any other provision hereof, if
                    requested by the Director and approved by the Board, the Director
                    shall be
                    entitled to receive the Disability Benefit hereunder, in any
                    case in which
                    it is determined by a duly licensed physician selected by the
                    Association,
                    that the Director has a 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 (1) renders
                    Director unable to engage in any substantial gainful activity
                    or (2)
                    entitles Director to income replacement benefits for a period
                    of not less
                    than three months under an accident and health plan covering
                    employees of
                    the Association.  If the Director's service is terminated
                    pursuant to this paragraph and Board approval is obtained, the
                    Director
                    shall begin receiving the Disability Benefit annuity in lieu
                    of any
                    Deferred Compensation Benefit which is not available prior to
                    the
                    Director's Benefit Eligibility Date.  The annuity shall begin
                    not more than thirty (30) days following the above-mentioned
                    disability
                    determination.  The amount of the monthly benefit shall be the
                    annuitized value of the Director's Elective Contribution Account,
                    measured
                    upon such determination and payable over the Payout Period.  The
                    Interest Factor shall be used to annuitize the Elective Contribution
                    Account.  In the event the Director dies while receiving
                    payments pursuant to this Subsection, or after becoming eligible
                    for such
                    payments but before the actual commencement of such payments,
                    his
                    Beneficiary shall be entitled to receive those benefits provided
                    for in
                    Subsection 5.l(a) or 5.2(a) and the Disability Benefits provided
                    for in
                    this Subsection shall terminate upon the Director's
                    death.

                

        

         

        
          	
                  4.3

                	
                  Financial
                    Hardship Benefit. In the event the Director incurs a Financial
                    Hardship, the Director may request a Financial Hardship Benefit.
                    Such
                    request shall be either approved or rejected by the Bank in the
                    exercise
                    of its sole discretion. The Director will be required to demonstrate
                    to
                    the satisfaction of the Bank that a Financial Hardship has occurred
                    and
                    that the Director is otherwise entitled to a Financial Hardship
                    Benefit in
                    accordance with Subsections 1.14 and 1.15. If a Financial Hardship
                    Benefit
                    is approved, it shall be paid in a lump sum within thirty (30)
                    days of the
                    event which triggers payment. The balance of the Director’s Elective
                    Contribution Account shall be reduced for any Financial Hardship
                    Benefit
                    distribution. Also, any subsequent Deferred Compensation Benefit
                    annuity,
                    Survivor’s Benefit annuity or Disability Benefit annuity shall be
                    actuarially adjusted to reflect such
                    distribution.

                

        

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        
          	
                  4.4

                	
                  Removal
                    For Cause. In the event the Director is removed for Cause at any time
                    prior to reaching his Benefit Age, he shall be entitled to receive
                    the
                    balance of his Elective Contribution Account, measured as of
                    the date of
                    removal. Such amount shall be paid in a lump sum within thirty
                    (30) days
                    of the Director’s date of removal. All other benefits provided for the
                    Director or his Beneficiary under this agreement shall be forfeited
                    and
                    the Agreement shall become null and
                    void.

                

        

         

        
          	
                  4.5

                	
                  Change
                    in Control.  If a Change in Control occurs prior to the
                    Director’s Benefit Eligibility Date and the Director incurs a Separation
                    from Service as of such Change in Control, Director shall be
                    paid his
                    Accrued Benefit hereunder in one lump sum on the effective date
                    of the
                    Change in Control.

                

        

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

        SECTION
          V

         

        DEATH
          BENEFITS

         

        (Note
          that Subsection 5.1 and 5.2 are alternative Subsections. Only one (1) of
          these
          Subsections shall be applicable to the Director. The Director’s Joinder
          Agreement shall identify which of the two (2) Subsections is applicable
          to the
          Director.)

         

        
          	
                  5.1

                	
                  Death
                    Benefit Prior to Commencement of Deferred Comnensation Benefit. In the
                    event of the Director’s death prior to commencement of the Deferred
                    Compensation Benefit, the Bank shall pay the Director’s Beneficiary a
                    monthly amount for the Payout Period, commencing within thirty
                    (30) days
                    of the Director’s death. The amount of such benefit payments shall be
                    determined as follows:

                

        

         

        
          	
                   

                	
                  (a)

                	
                  In
                    the event death occurs (i) while the Director is receiving the
                    Disability
                    Benefit provided for in Subsection 4.2, or (ii) after the Director
                    has
                    become eligible for such Disability Benefit payments but before
                    such
                    payments have commenced, the Director’s Beneficiary shall be entitled to
                    receive the Survivor’s Benefit for the Payout Period, reduced by the
                    number of months Disability Benefit payments were made to the
                    Director. In
                    the event death occurs after the Director has received the Disability
                    Benefit, provided for in Subsection 4,2, for the entire Payout
                    Period, the
                    Director’s Beneficiary shall not be entitled to the Survivor’s Benefit for
                    any length of time. However, the lump sum payment described in
                    the second
                    paragraph of this Subsection (a) shall still be applicable to
                    such
                    Beneficiary.

                

        

         

        If
          the
          total dollar amount of Disability Benefit payments received by the Director
          under Subsection 4.2 is less than the total dollar amount of payments that
          would
          have been received had the Survivor’s Benefit been paid in lieu of the
          Disability Benefit during the Director’s life, the Bank shall pay the Director’s
          Beneficiary a lump sum payment for the difference. This lump sum payment
          shall
          be made within thirty (30) days of the Director’s death.

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (b)

                	
                  In
                    the event death occurs while the Director is (i) in the service
                    of the
                    Bank, (ii) deferring fees pursuant to Section II and (iii) prior
                    for to any reduction or discontinuance, via an effective filing
                    of a
                    Notice of Adjustment of Deferral Amount, in the level of deferrals
                    reflected in the Director’s initial Joinder Agreement, for any period
                    during the Deferral Period, the Director’s Beneficiary shall be paid the
                    Survivor’s Benefit.

                

        

         

        
          	
                   

                	
                  (c)

                	
                  In
                    the event death occurs while the Director is (i) in the service
                    of the
                    Bank, (ii) deferring fees pursuant to Section II and (iii) after
                    any reduction or discontinuance, via an effective filing of a
                    Notice of
                    Adjustment of Deferral Amount, in the level of deferrals reflected
                    in the
                    Director’s initial Joinder Agreement, for any period during the Deferral
                    Period, the Director’s Beneficiary shall be paid a reduced Survivor’s
                    Benefit, such amount being determined by multiplying the monthly
                    payment
                    available as a Survivor’s Benefit by a fraction, the numerator of which is
                    equal to the total Board fees actually deferred by the Director
                    as of his
                    death and the denominator of which is equal to the amount of
                    Board fees
                    that would have been deferred as of his death, if no reduction
                    or
                    discontinuance in the level of deferrals had occurred at any
                    time
                    following execution of the Joinder Agreement and during the Deferral
                    Period.

                

        

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (d)

                	
                  In
                    the event the Director completes less than one hundred (100%)
                    percent of
                    his Projected Deferrals due to any voluntary or involuntary termination
                    other than removal for Cause, the Director’s Beneficiary shall be paid a
                    reduced Survivor’s Benefit, such amount being determined by multiplying
                    the monthly payment available as a Survivor’s Benefit by a fraction, the
                    numerator of which is equal to the total Board fees actually
                    deferred by
                    the Director and the denominator of which is equal to the Director’s
                    Projected Deferral.

                

        

         

        
          	
                   

                	
                  (e)

                	
                  In
                    the event the Director completes one hundred (100%) percent of
                    his
                    Projected Deferrals ,prior to any voluntary or. involuntary termination
                    other than removal for Cause and provided no payments have been
                    made
                    pursuant to Subsection 4.2, the Director’s Beneficiary shall be paid the
                    full Survivor’s Benefit.

                

        

         

        
          	
                  5.2

                	
                  Death
                    Benefit Prior to Commencement of Deferred Compensation Benefit.
                    In the
                    event of the Director’s death prior to commencement of the Deferred
                    Compensation Benefit, the Bank shall pay the Director’s Beneficiary a
                    monthly amount determined as
                    follows:

                

        

         

        
          	
                   

                	
                  (a)

                	
                  In
                    the event death occurs (i) while the Director is receiving the
                    Disability
                    Benefit provided for in Subsection 4.2, or (ii) after the Director
                    has
                    become eligible for such Disability Benefit payments but before
                    such
                    payments have commenced, ‘the Director’s Beneficiary shall be entitled to
                    receive a continuation of the Disability Benefit payments for
                    the Payout
                    Period, reduced by the number of months Disability Benefit payments
                    were
                    made to the Director. In the event death occurs after the Director
                    has
                    received the Disability Benefit, provided for in Subsection 4.2,
                    for the
                    entire Payout-Period, the Director’s Beneficiary shall not be
                    entitled to the Survivor’s Benefit for any length of time. However, the
                    lump sum payment described in the second paragraph of this Subsection
                    (a)
                    shall still be applicable to such
                    Beneficiary.

                

        

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

         

        If
          the
          total dollar amount of Disability Benefit payments received, collectively,
          by
          the Director under Subsection 4.2 and by the Director’s Beneficiary under this
          Subsection is less than the total dollar amount of payments that would
          have been
          received had the Survivor’s Benefit been paid in lieu of the Disability Benefit
          to such Director and to such Beneficiary, collectively, the Bank shall
          pay the
          Director’s Beneficiary a lump sum payment for the difference. This lump sum
          payment shall be made within thirty (30) days of the subsequent death of
          any other Director electing to participate in this agreement.

         

        
          	
                   

                	
                  (b)

                	
                  In
                    the event death occurs while the Director is (i) in the service
                    of the
                    Bank, (ii) deferring fees pursuant to Section II and (iii) prior
                    for to any reduction or discontinuance, via an effective filing
                    of a
                    Notice of Adjustment of Deferral Amount, in the level of deferrals
                    reflected in the Director’s initial Joinder Agreement, for any period
                    during the Deferral Period, the Director’s Beneficiary shall be paid the
                    Survivor’s Benefit. Such Survivor’s Benefit shall be paid for the Payout
                    Period and shall commence within thirty (30) days of the subsequent
                    death of any other Director electing to participate in this
                    Agreement.

                

        

         

        
          	
                   

                	
                  (c)

                	
                  In
                    the event death occurs while the Director is (i) in the service
                    of the
                    Bank, (ii) deferring fees pursuant to Section II and (iii) after
                    any reduction or discontinuance, via an effective filing of a
                    Notice of
                    Adjustment of Deferral Amount, in the level of deferrals reflected
                    in the
                    Director’s initial Joinder Agreement, for any period during the Deferral
                    Period, the Director’s Beneficiary shall be paid a reduced Survivor’s
                    Benefit, such amount being determined by multiplying the monthly
                    payment
                    available as a Survivor’s Benefit by a fraction, the numerator of which is
                    equal to the, total Board fees actually deferred by the Director
                    as of his
                    death and the denominator of which is equal to the amount of
                    Board fees
                    that would have been deferred as of his death, if no reduction
                    or
                    discontinuance in the level of deferrals had occurred at any
                    time
                    following execution of the Joinder Agreement and during the Deferral
                    Period. Such reduced Survivor’s Benefit shall be paid for the Payout
                    Period and shall commence within thirty (30) days of the subsequent
                    death
                    of any other Director electing to participate in this
                    Agreement.

                

        

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (d)

                	
                  In
                    the event the Director completes less than one hundred (100%)
                    percent of
                    his Projected Deferrals due to any voluntary or involuntary termination
                    other than removal for Cause, the Director’s Beneficiary shall be paid a
                    reduced Survivor’s Benefit, such amount being determined by multiplying
                    the monthly payment available as a Survivor’s Benefit by a fraction, the
                    numerator of which is equal to the total Board fees actually
                    deferred by
                    the Director and the denominator of which is equal to the Director’s
                    Projected Deferral. Such reduced Survivor’s Benefit shall be paid for the
                    Payout Period and shall commence within thirty (30) days of the
                    subsequent
                    death of any other Director electing to participate in this
                    Agreement.

                

        

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (e)

                	
                  In
                    the event the Director completes one hundred (100%) percent of
                    his
                    Projected Deferrals prior to any voluntary or involuntary termination
                    other than removal for Cause and provided no payments have been
                    made
                    pursuant to Subsection 4.2, the Director’s Beneficiary shall be paid the
                    full Survivor’s Benefit. Such Survivor’s Benefit shall be paid for the
                    Payout Period and shall commence within thirty (30) days of the
                    subsequent death of any other Director electing to participate
                    in
                    this Agreement.

                

        

         

        
          	
                  5.3

                	
                  Additional
                    Death Benefit - Burial Expense. In addition to the above-described
                    death benefits, within thirty (30) days of the Director’s death, the
                    Director’s Beneficiary shall be entitled to receive a one-time lump hum
                    death benefit in the amount of Ten Thousand ($10,000.00)
                    Dollars.

                

        

         

        SECTION
          VI

         

        BENEFICIARY
          DESIGNATION

         

        The
          Director shall make an initial designation of primary and secondary
          Beneficiaries upon execution of his Joinder Agreement and shall have the
          right
          to change such designation, at any subsequent time, by submitting to the
          Administrator in substantially the form attached as Exhibit A to the Joinder
          Agreement, a written designation of primary and secondary Beneficiaries.
          Any
          Beneficiary designation made subsequent to execution of the Joinder Agreement
          shall become effective only when receipt thereof is acknowledged in writing
          by
          the Administrator.

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

         

        SECTION
          VII

         

        DIRECTOR’S
          RIGHT TO ASSETS

         

        The
          rights of the Director, any Beneficiary, or any other person claiming through
          the Director under this Agreement, shall be solely those of an unsecured
          general
          creditor of the Bank. The Director, the Beneficiary, or any other person
          claiming through the Director, shall only have the right to receive from
          the
          Bank those payments so specified under this Agreement. The Director agrees
          that
          he, his Beneficiary, or any other person claiming through him shall have
          no
          rights or interests whatsoever in any asset of the Bank, including any
          insurance
          policies or contracts which the Bank may possess or obtain to informally
          fund
          this Agreement. Any asset used or acquired by the Bank in connection with
          the
          liabilities it has assumed under this Agreement, unless expressly provided
          herein, shall not be deemed to be held under any trust for the benefit
          of the
          Director or his Beneficiaries, nor shall any asset be considered security
          for
          the performance of the obligations of the Bank. Any such asset shall be
          and
          remain, a general, unpledged, and unrestricted asset of the Bank.

         

        SECTION
          VIII

         

        RESTRICTIONS
          UPON FUNDING

         

        The
          Bank
          shall have no obligation to set aside, earmark or entrust any fund or money
          with
          which to pay its obligations under this Agreement. The Director, his
          Beneficiaries or any successor in interest to him shall be and remain simply
          a
          general unsecured creditor of the Bank in the same manner as any other
          creditor
          having a general claim for matured and unpaid compensation. The Bank reserves
          the absolute right in its sole discretion to either purchase assets to
          meet its
          obligations undertaken by this Agreement or to refrain from the same and
          to
          determine the extent, nature, and method of such asset purchases. Should
          the
          Bank decide to purchase assets such as life insurance, mutual funds, disability
          policies or annuities, the Bank reserves the absolute right, in its sole
          discretion, to terminate such assets at any time, in whole or in part.
          At no
          time shall the Director be deemed to have any lien, right, title or interest
          in
          or to any specific investment or to any assets of the Bank. If the Bank
          elects
          to invest in a life insurance, disability or annuity policy upon the life
          of the
          Director, then the Director shall assist the Bank by freely submitting
          to a
          physical examination and by supplying such additional information necessary
          to
          obtain such insurance or annuities.

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

        SECTION
          IX

         

        ALIENABILITY
          AND ASSIGNMENT PROHIBITION

         

        Neither
          the Director nor any Beneficiary under this Agreement shall have any power
          or
          right to transfer, assign, anticipate, hypothecate, mortgage, commute,
          modify or
          otherwise encumber in advance any of the benefits payable hereunder, nor
          shall
          any of said benefits be subject to seizure for the payment of any debts,
          judgments, alimony or separate maintenance owed by the Director or his
          Beneficiary, nor be transferable by operation of law in the event of bankruptcy,
          insolvency or otherwise. In the event the Director or any Beneficiary attempts
          assignment, communication, hypothecation, transfer or disposal of the benefits
          hereunder, the Bank’s liabilities shall forthwith cease and
          terminate.

         

        SECTION
          X

         

        ACT
          PROVISIONS

         

        
          	
                  10.1

                	
                  Named
                    Fiduciary and Administrator. Financial Institution Consulting
                    Corporation, a Tennessee Corporation (“FICC”) shall be the Named Fiduciary
                    and Administrator (the “Administrator”) of this Agreement. As
                    Administrator, FICC shall be responsible for the management,
                    control and
                    administration of the Agreement as established herein. The Administrator
                    may delegate to others certain aspects of the management and
                    operational
                    responsibilities of the Agreement, including the employment of
                    advisors
                    and the delegation of ministerial duties to qualified
                    individuals.

                

        

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

         

        
          	
                  10.2

                	
                  Claims
                    Procedure and Arbitration. In the event that benefits under this
                    Agreement are not paid to the Director (or to his Beneficiary
                    in the case
                    of the Director’s death) and such claimants feel they are entitled to
                    receive such benefits, then a written claim must be made to the
                    Administrator within sixty (60) days from the date payments are
                    refused.
                    The Bank and its Board shall review the written claim and, if
                    the claim is
                    denied, in whole or in part, they shall provide in writing, within
                    ninety
                    (90) days of receipt of such claim, their specific reasons for
                    such
                    denial, reference to the provisions of this Agreement or the
                    Joinder
                    Agreement upon which the denial is based, and any additional
                    material or
                    information necessary to perfect the claim. Such writing by the
                    Bank and
                    its Board shall further indicate the additional steps which must
                    be
                    undertaken by claimants if an additional review of the claim
                    denial is
                    desired.

                

        

         

        If
          claimants desire a second review, they shall notify the Administrator in
          writing
          within sixty (60) days of the first claim denial. Claimants may review
          this
          Agreement, the Joinder Agreement or any documents relating thereto and
          submit
          any issues and comments, in writing, they may feel appropriate. In its
          sole
          discretion, the Administrator shall then review the second claim and provide
          a
          written decision within sixty (60) days of receipt of such claim. This
          decision
          shall state the specific reasons for the decision and shall include reference
          to
          specific provisions of this Agreement or the Joinder Agreement upon which
          the
          decision is based.

         

        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

        

         

        If
          claimants continue to dispute the benefit denial based upon completed
          performance of this Agreement and the Joinder Agreement or the meaning
          and
          effect of the terms and conditions thereof, then claimants may submit the
          dispute to a Board of Arbitration for final arbitration. Said Board shall
          consist of one member selected by the claimant, one member selected by
          the Bank,
          and the third member selected by the first two members. The Board shall
          operate
          under any generally recognized set of arbitration rules. The parties hereto
          agree that they, their heirs, personal representatives, successors and
          assigns
          shall be bound by the decision of such Board with respect to any controversy
          properly submitted to it for determination.

         

        SECTION
          XI

         

        MISCELLANEOUS

         

        
          	
                  11.1

                	
                  No
                    Effect on Directorship Rights. Nothing contained herein will confer
                    upon the Director the right to be retained in the service of
                    the Bank nor
                    limit the right of the Bank to discharge or otherwise deal with
                    the
                    Director without regard to the existence of the Agreement. Pursuant
                    to 12
                    C.F.R. § 563.39(b), the following conditions shall apply to this
                    Agreement:

                

        

         

        
          	
                   

                	
                  (1)

                	
                  The
                    Bank’s Board of Directors may remove the Director at any time, but
                    any
                    removal by the Bank’s Board of Directors other than removal for Cause
                    shall not prejudice the Director’s vested right to compensation or other
                    benefits under the contract. As provided in Section 4.4, the
                    Director
                    shall be paid the balance of his Elective Contribution Account
                    in a lump
                    sum within thirty (30) days of his removal in the event he is
                    removed for
                    Cause. He shall have no right to receive additional compensation
                    or other
                    benefits for any period after removal for
                    Cause.

                

        

         

        
          
            
            

          

          
            24

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (2)

                	
                  If
                    the Director is suspended and/or temporarily prohibited from
                    participating
                    in the conduct of the Bank’s affairs by a notice served under Section
                    8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
                    1818(e)(3) and (g)(1)) the Bank’s obligations under the contract shall be
                    suspended (except vested rights) as of the date of termination
                    of service
                    unless stayed by appropriate proceedings. If the charges in the
                    notice are
                    dismissed, the Bank may in its discretion (i) pay the Director
                    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.

                

        

         

        
          	
                   

                	
                  (3)

                	
                  If
                    the Director is removed and/or permanently prohibited from participating
                    in the conduct of the Bank’s affairs by an order issued under Section
                    8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C.
                    1818(e)(4) or (g)(1)), all non-vested obligations of the Bank
                    under the
                    contract shall terminate as of the effective date of the order,
                    but vested
                    rights of the Director shall not be
                    affected.

                

        

         

        
          	
                   

                	
                  (4)

                	
                  If
                    the Bank is in default (as defined in Section 3(x)(1) of the
                    Federal
                    Deposit Insurance Act), all non-vested obligations under the
                    contract
                    shall terminate as of the date of
                    default.

                

        

         

        
          	
                   

                	
                  (5)

                	
                  All
                    non-vested obligations under the contract shall be terminated,
                    except to
                    the extent determined that continuation of the contract is necessary
                    for
                    the continued operation of the
                    Bank:

                

        

         

        
          	
                   

                	
                  (i)

                	
                  by
                    the Director or his designee at the time the Federal Deposit
                    Insurance
                    Corporation or the Resolution Trust Corporation enters into an
                    agreement
                    to provide assistance to or on behalf of the Bank under the authority
                    contained in § 13(c) of the Federal Deposit Insurance Act;
                    or

                

        

         

        
          
            
            

          

          
            25

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (ii)

                	
                  by
                    the Director or his designee, at the time the Director or his
                    designee
                    approves a supervisory merger to resolve problems related to
                    operation of
                    the Bank or when the Bank is determined by the Director to be
                    in an unsafe
                    or unsound condition.

                

        

         

        Any
          rights of the parties that have already vested, (i.e., the balance of his
          Elective Contribution Account), however, shall not be affected by such
          action.

         

        
          	
                  11.2

                	
                  State
                    Law. The Agreement is established under, and will be construed
                    according to, the laws of the State of
                    Indiana.

                

        

         

        
          	
                  11.3

                	
                  Severability.
                    In the event that any of the provisions of this Agreement or
                    portion
                    thereof, are held to be inoperative or invalid by any court of
                    competent
                    jurisdiction, then: (1) insofar as is reasonable, effect will
                    be given to
                    the intent manifested in the provisions held invalid or inoperative,
                    and
                    (2) the validity and enforceability of the remaining provisions
                    will not
                    be affected thereby.

                

        

         

        
          	
                  11.4

                	
                  Incapacity
                    of Recipient. In the event the Director is declared incompetent and a
                    conservator or other person legally charged with the care of
                    his person or
                    Estate is appointed, any benefits under the Agreement to which
                    such,
                    Director is entitled shall be paid to such conservator or other
                    person
                    legally charged with the care of his person or Estate. Except
                    as provided
                    above in this paragraph, when the Bank’s Board of Directors, in its sole
                    discretion, determines that the Director is unable to manage
                    his financial
                    affairs, the Board may direct the Bank to make distributions
                    to any person
                    for the benefit of the Director.

                

        

         

        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

         

        
          	
                  11.5

                	
                  Recovery
                    of Estate Taxes. If the Director’s gross estate for federal estate tax
                    purposes includes any amount determined by reference to and on
                    account of
                    this Agreement, and if the Beneficiary is other than the Director’s
                    estate, then the Director’s estate shall be entitled to recover from the
                    Beneficiary receiving such benefit under the terms of the Agreement,
                    an
                    amount by which the total estate tax due by Director’s estate, exceeds the
                    total estate tax which would have been payable if the value of
                    such
                    benefit had not been included in the Director’s gross
                    estate.  If there is more than one person receiving such
                    benefit, the right of recovery shall be against each such
                    person.  To the extent permitted under Section 409A of the
                    Code, in the event the Beneficiary has a liability hereunder,
                    the
                    Beneficiary may petition the Association for a lump sum payment
                    in an
                    amount not to exceed the Beneficiary’s liability
                    hereunder.

                

        

         

        
          	
                  11.6

                	
                  Unclaimed
                    Benefit. The Director shall keep the Bank informed of his current
                    address and the current address of his Beneficiaries. If the
                    location of
                    the Director is not made known to the Bank within three (3) years
                    after
                    the date on which any payment of the Deferred Compensation Benefit
                    may be
                    made, payment may be made as though the Director had died at
                    the end of
                    the three (3) year period. If, within one (1) additional year
                    after such
                    three (3) year period has elapsed, or, within three (3) years
                    after the
                    actual death of the Director, whichever occurs first, the Bank
                    is unable
                    to locate any Beneficiary of the Director, the Bank may fully
                    discharge
                    its obligation by payment to the
                    Estate.

                

        

         

        
          
            
            

          

          
            27

            
              

            

          

          
            
            

          

        

         

        
          	
                  11.7

                	
                  Limitations
                    on Liability. Notwithstanding any of the preceding provisions of the
                    Agreement, neither the Bank, nor any individual acting as an
                    employee or
                    agent of the Bank, or as a member of the Board of Directors shall
                    be
                    liable to the Director or any other person for any claim, loss,
                    liability
                    or expense incurred in connection with the
                    Agreement.

                

        

         

        
          	
                  11.8

                	
                  Gender.
                    Whenever in this Agreement words are used in the masculine or
                    neuter
                    gender, they shall be read and construed as in the, masculine,
                    feminine or
                    neuter gender, whenever they should so
                    apply.

                

        

         

        
          	
                  11.9

                	
                  Affect
                    on Other Corporate Benefit Agreements. Nothing contained in this
                    Agreement shall affect the right of the Director to participate
                    in or be
                    covered by any qualified or non qualified pension, profit sharing,
                    group,
                    bonus or other supplemental compensation or fringe benefit agreement
                    constituting a part of the Bank’s existing or future compensation
                    structure.

                

        

         

        
          	
                  11.10

                	
                  Suicide.
                    Notwithstanding anything to the contrary in this Agreement, the
                    benefits
                    otherwise provided herein shall not be payable if the Director’s death
                    results from suicide, whether sane or insane, within twenty-six
                    (26)
                    months after the execution of this Agreement. If the Director
                    dies during
                    this twenty-six (26) month period due to suicide, the balance
                    of his
                    Elective Contribution Account will be paid to the Director’s Beneficiary
                    in a single payment. Payment is to be made within thirty (30)
                    days after
                    the Director’s death is declared a suicide by competent legal authority.
                    Credit shall be given to the Bank for payments made prior to
                    determination
                    of suicide.

                

        

         

        
          
            
            

          

          
            28

            
              

            

          

          
            
            

          

        

         

        
          	
                  11.11

                	
                  Headings.
                    Headings and sub-headings in this Agreement are inserted for
                    reference and
                    convenience only and shall not be deemed a part of this
                    Agreement.

                

        

         

        
          	
                  11.12

                	
                  Reference
                    to Controlled Group.  With respect to any benefit payable as
                    a result of termination of or separation from employment, termination
                    of
                    or separation from employment shall be determined by reference
                    to the
                    Association and all members of any controlled group (determined
                    under
                    Section 414(b) of the Code) or trades or businesses under common
                    control
                    (determined under Section 414(c) of the Code) that includes the
                    Association.

                

        

         

        
          	
                  11.13

                	
                  Restrictions
                    on Payment to Key Employees.  To the extent the Director is
                    a “key employee” (as defined in Section 416(i) of the Code determined
                    without regard to paragraph (5) thereof) of a corporation whose
                    stock is
                    publicly traded on an established securities market or otherwise,
                    within
                    the meaning of Section 409A(a)(2)(B)(i) of the Code, no distribution
                    of
                    benefits that are made upon a Separation from Service and that
                    represent
                    payment of deferred compensation that is subject to 409A of the
                    Code may
                    commence before the date which is six months after the Director’s date of
                    Separation from Service (or, if earlier, the date of the Director’s
                    death); provided, however, that the six (6) month delay required
                    under
                    this Section 11.13 shall not apply to the portion of any payment
                    resulting from the Director’s “involuntary separation from service” (as
                    defined in Treas. Reg. § 1.409A-1(n) and including a “separation from
                    service for good reason,” as defined in Treas. Reg. § 1.409A-1(n)(2)) that
                    (a) is payable no later than the last day of the second year
                    following the
                    year in which the Separation from Service occurs, and (b) does
                    not exceed
                    two times the lesser of (i) the Director’s annualized compensation for the
                    year prior to the year in which the Separation from Service occurs,
                    or
                    (ii) the dollar limit described in Section 401(a)(17) of the
                    Code.  In the event this Section 11.13 is applicable to a
                    Director, any distribution which would otherwise be paid to the
                    Director
                    within the first six months following the Separation from Service
                    shall be
                    accumulated and paid to the Director in a lump sum on the first
                    day of the
                    seventh month following the Separation from Service.  All
                    subsequent distributions shall be paid in the manner specified
                    in this
                    Plan.

                

        

         

        
          
            
            

          

          
            29

            
              

            

          

          
            
            

          

        

         

        SECTION
          XII

         

        AMENDMENT/REVOCATION

         

        This
          Agreement shall not be amended, modified or revoked at any time, in whole
          or
          part, without the mutual written consent of the Director and the Bank,
          and such
          mutual consent shall be required even if the Director is no longer serving
          the
          Bank as a member of the Board.  Notwithstanding anything to the
          contrary in this Section XII, the present value of each Director’s benefit
          shall be distributed immediately in a lump sum if this Agreement terminates
          in
          the following circumstances:

         

        
          	
                   

                	
                  (a)

                	
                  Within
                    thirty (30) days before or twelve (12) months after a change
                    in the
                    ownership or effective control of the Bank, or in the ownership
                    of a
                    substantial portion of the assets of the Bank as described in
                    Section
                    409A(2)(A)(v) of the Code, provided that termination of this
                    Agreement was
                    effected through an irrevocable action taken by the Bank and
                    provided
                    further that all distributions are made no later than twelve
                    (12) months
                    following such termination of the Agreement and that all the
                    Bank's
                    arrangements which are substantially similar to the Agreement
                    are
                    terminated so all Directors and any participants in the similar
                    arrangements are required to receive all amounts of compensation
                    deferred
                    under the terminated arrangements within twelve (12) months of
                    the
                    termination of the arrangements;

                

        

         

        
          
            
            

          

          
            30

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  (b)

                	
                  Upon
                    the Bank’s dissolution or with the approval of a bankruptcy court provided
                    that the amounts deferred under the Agreement are included in
                    each
                    Director's gross income in the latest of (i) the calendar year
                    in which
                    the Agreement terminates; (ii) the calendar year in which the
                    amount is no
                    longer subject to a substantial risk of forfeiture; or (iii)
                    the first
                    calendar year in which the distribution is administratively practical;
                    or

                

        

         

        
          	
                   

                	
                  (c)

                	
                  Upon
                    the Bank’s termination of this and all other account balance plans (as
                    referenced in Section 409A of the Code or the regulations thereunder),
                    provided that all distributions are made no earlier than twelve
                    (12)
                    months and no later than twenty-four (24) months following such
                    termination, provided further that the termination of this Agreement
                    does
                    not occur proximate to the downturn in the financial health of
                    the Bank
                    and provided further that the Bank does not adopt any new account
                    balance
                    plans for a minimum of three (3) years following the date of
                    such
                    termination.

                

        

         

        For
          purposes of this Article XII, “present value” shall be calculated in accordance
          with Section 280G(d)(4) of the Code.

         

        SECTION
          XIII

         

        EXECUTION

        

          
            	
                    13.1

                  	
                    This
                      Agreement sets forth the entire understanding of the parties
                      hereto with
                      respect to the transactions contemplated hereby, and any previous
                      agreements or understandings

                  

          

           

          
            
              
              

            

            
              31

              
                

              

            

            
              
              

            

          

           

          

            
              	
                       

                    	
                      between
                        the parties hereto regarding the subject matter hereof are
                        merged into and
                        superseded by this Agreement.

                    

            

             

          

          
            	
                    13.2

                  	
                    This
                      Agreement shall be executed in triplicate, each copy of which,
                      when so
                      executed and delivered, shall be an original, but all three
                      copies shall
                      together constitute one and the same
                      instrument.

                  

          

           

        

      

    

    IN
      WITNESS WHEREOF, the Bank has caused this Agreement to be amended and restated
      this 20th day of November, 2007.

     

    
       

      
        	 	 	
                RIVER
                  VALLEY FINANCIAL BANK

              
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	/s/
                Matthew P. Forrester
	 	 	 	 
	 	 	President,
                CEO
	 	 	
                (Title)

              

      

       

       

       

      
32

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]