EXHIBIT 10.7

 

RIVERVIEW NATIONAL BANK

DIRECTOR DEFERRED FEE AGREEMENT

 

THIS AGREEMENT is made this 31st day of December, 2008, by RIVERVIEW NATIONAL
BANK, a national bank located in Marysville, Pennsylvania (the “Bank”), and
                                                  , (the “Director”).

 

INTRODUCTION

 

To encourage the Director to remain a member of the Bank’s Board of Directors,
the Bank is willing to provide to the Director a deferred fee opportunity. The
Bank will pay the benefits from its general assets.

 

AGREEMENT

 

The Director and the Bank agree as follows:

 

Article 1

Definitions

 

1.1           Definitions.  Whenever used in this Agreement, the following words
and phrases shall have the meanings specified:

 

1.1.1        “Change in Control” means a change in the ownership or effective
control of the Corporation or the Bank as described in
Section 409A(a)(2)(A)(v) of the Code.

 

Notwithstanding anything else to the contrary set forth in this Agreement, if
(i) an agreement is executed by the Corporation or the Bank providing for any of
the transactions or events constituting a Change in Control as defined herein,
and the agreement subsequently expires or is terminated without the transaction
or event being consummated, and (ii) Director’s service did not terminate during
the period after the agreement and prior to such expiration or termination, for
purposes of this agreement it shall be as though such agreement was never
executed and no Change in Control event shall be deemed to have occurred as a
result of the execution of such Agreement.

 

1.1.2        “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.

 

1.1.3        “Corporation” means Riverview Financial Corporation.

 

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1.1.4        “Disability” means the Director’s inability to perform
substantially all normal duties of a director, provided such disability complies
with the definition provided under Code Section  409A. As a condition to
receiving any benefits, the Bank may require the Director to submit to such
physical or mental evaluations and tests as the Board of Directors deems
appropriate.

 

1.1.5        “Election Form” means the Form attached as Exhibit A.

 

1.1.6        “Fees” means the total amount earned by the Director for serving on
the Bank’s Board.

 

1.1.7        “Normal Benefit Age” means the benefit distribution age specified
by the Director in Exhibit A.

 

1.1.8        “Plan Year” means each twelve (12) month period commencing with the
month deferrals commence under this Agreement.

 

1.1.9        “Termination of Service” means the Director’s ceasing to be a
member of the Bank’s Board of Directors for any reason other than death,
provided such termination of service complies with the definition of termination
of service under Code Section 409A.

 

Article 2

Deferral Election

 

2.1           Initial Election.  The Director shall make an initial deferral
election under this Agreement by filing with the Bank a signed Election
Form within thirty (30) days after the date of this Agreement. The Election
Form shall set forth the amount of Fees to be deferred, provided such deferral
opportunity shall be limited to Fees earned during the ten-year period ending
December 31, 2018 unless an extension is approved in writing by the Bank. The
Election Form shall be effective to defer only Fees earned after the date the
Election Form is received by the Bank.

 

2.2           Election Changes.  The Director may modify the amount of Fees to
be deferred annually by filing a new Election Form with the Bank. The modified
deferral shall not be effective until the calendar year following the year in
which the subsequent Election Form is received by the Bank. Any changes to the
form of benefit payment must be in accordance with Exhibit A.

 

Article 3

Deferral Account

 

3.1           Establishing and Crediting.  The Bank shall establish a Deferral
Account on its books for the Director, and shall credit to the Deferral Account
the following amounts:

 

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3.1.1        Deferrals.  The fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.

 

3.1.2        Interest.  Interest at an annual rate of 70% of R.O.E.  R.O.E. is
to be calculated by a daily quarterly average.

 

3.2           Statement of Accounts.  The Bank shall provide to the Director,
within one hundred twenty (120) days after each Plan Year, a statement setting
forth the Deferral Account balance.

 

3.3           Accounting Device Only.  The Deferral Account is solely a device
for measuring amounts to be paid under this Agreement. The Deferral Account is
not a trust fund of any kind. The Director is a general unsecured creditor of
the Bank for the payment of benefits. The benefits represent the mere Bank
promise to pay such benefits. The Director’s rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment by the Director’s creditors.

 

Article 4

Lifetime Benefits

 

4.1           Normal Benefit Age.  If the Director terminates service as a
Director on or after Normal Benefit Age, the Bank shall pay to the Director the
benefit described in this Section 4.1 in lieu of any other benefit under this
Agreement.

 

4.1.1        Amount of Benefit.  The benefit under this Section 4.1 is the
Deferral Account balance at the date specified in Exhibit A.

 

4.1.2        Payment of Benefit.  The Bank shall pay the benefit to the Director
in the form specified in Exhibit A. If installment payments are elected, the
Bank shall continue to credit interest at an annual rate as defined in
Section 3.1.2 above, on the undistributed account balance during any applicable
installment period.

 

4.2           Early Termination Benefit.  If the Director terminates service as
a Director before the Normal Benefit Age for reasons other than death,
disability or following a Change in Control, the Bank shall pay to the Director
the benefit described in this Section 4.2 in lieu of any other benefit under
this Agreement.

 

4.2.1        Amount of Benefit.  The Benefit under this Section 4.2 is the
Deferral Account balance at the Director’s Termination of Service.

 

4.2.2        Payment of Benefit.  The Bank shall pay the benefit to the Director
in the form specified in Exhibit A. If installment payments are elected, the
Bank shall continue to credit interest at an annual rate as

 

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defined in Section 3.1.2 above, on the undistributed account balance during any
applicable installment period.

 

4.3           Disability Benefit.  Upon Termination of Service for disability
prior to the Normal Benefit Age, the Bank shall pay to the Director the benefit
described in this Section 4.3 in lieu of any other benefit under this Agreement.

 

4.3.1        Amount of Benefit.  The benefit under this Section 4.3 is the
Deferral Account balance at the date specified in Exhibit A. If applicable, the
Bank shall continue to credit interest to the Deferral Account balance at a rate
as defined in Section 3.1.2 above, during the period from Termination of Service
until payments commence.

 

4.3.2        Payment of Benefit.  The Bank shall pay the benefit to the Director
in the form specified in Exhibit A. If installment payments are elected, the
Bank shall continue to credit interest at an annual rate as defined in
Section 3.1.2 above, on the undistributed account balance during any applicable
installment period.

 

4.4           Change of Control Benefit.  If the Director is in the active
service of the Bank when the change occurs, the Bank shall pay to the Director
the benefit described in this Section 4.4 in lieu of any other benefit under
this Agreement.

 

4.4.1        Amount of Benefit.  The benefit under this Section 4.4 is the
Deferral Account balance at the date specified in Exhibit A. If applicable, the
Bank shall continue to credit interest to the Deferral Account balance at a rate
as defined in Section 3.1.2 above, during the period from Termination of Service
until payments commence.

 

4.4.2        Payment of Benefit.  The Bank shall pay the benefit to the Director
in the form specified in Exhibit A. If installment payments are elected, the
Bank shall continue to credit interest at an annual rate as defined in
Section 3.1.2 above, on the undistributed account balance during any applicable
installment period.

 

4.5           Hardship Distribution.  If an unforeseeable financial emergency
arising from the death of a family member, divorce, sickness, injury,
catastrophe or similar event outside the control of the Director occurs,
provided such emergency qualifies as an unforeseeable emergency under Code
Section 409A, the Director may petition the Board for early payout of his
Deferral Account. If the Board determines that the Director’s request
constitutes an unforeseeable financial emergency as provided under Code 409A,
the Bank shall distribute to the Director all or a portion of the Deferral
Account balance as determined by the Bank, but in no event shall the
distribution be greater than is necessary to relieve the financial hardship.

 

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Article 5

Death Benefits

 

5.1           Death Prior to Commencement of Benefit Payments.  If the Director
dies prior to commencement of benefit payments, the Bank shall pay to the
Director’s beneficiary the benefit described in this Section 5.1 in lieu of any
other benefit under this Agreement.

 

5.1.1        Amount of Benefit.  The benefit amount under Section 5.1 is the
Deferral Account balance.

 

5.1.2        Payment of Benefit.  The Bank shall pay the benefit to the
beneficiary in the form specified in Exhibit A, with payment made or commencing
on the first day of January following the Director’s death. If installment
payments are elected, the Bank shall continue to credit interest at an annual
rate as defined in Section 3.1.2 above, compounded monthly, on the undistributed
account balance during any applicable installment period.

 

5.2           Death During Benefit Period.  If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Bank shall pay the remaining benefits to the Director’s
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.

 

Article 6

Beneficiaries

 

6.1           Beneficiary Designations.  The Director shall designate a
beneficiary by filing a written designation with the Bank. The Director may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Director and
accepted by the Bank during the Director’s lifetime. The Director’s beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Director, or if the Director names a spouse as beneficiary and the marriage
is subsequently dissolved. If the Director dies without a valid beneficiary
designation, all payments shall be made to the Director’s estate.

 

6.2           Facility of Payment.  If a benefit is payable to a minor, to a
person declared incompetent, or to a person incapable of handling the
disposition of his or her property, the Bank may pay such benefit to the
guardian, legal representative or person having the care or custody of such
minor, incompetent person or incapable person. The Bank may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the
Bank from all liability with respect to such benefit.

 

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Article 7

General Limitations

 

Notwithstanding any provision of this Agreement to the contrary, the Bank shall
not pay any benefit under this Agreement that is attributable to the interest
earned on such contributions:

 

7.1           Termination for Cause.  If the Bank terminates the Director’s
service for:

 

7.2.1        Gross negligence or gross neglect of duties;

 

7.2.2        Commission of a felony or of a gross misdemeanor involving moral
turpitude; or

 

7.2.3        Fraud, disloyalty, dishonesty or willful violation of any law or
significant Bank policy committed in connection with the Director’s service and
resulting in an adverse effect on the Bank.

 

7.2           Removal.  If the Director is subject to a final removal or
prohibition order issued by an appropriate federal banking agency pursuant to
Section 8(e) of the Federal Deposit Insurance Act.

 

7.3           Suicide.  If the Director commits suicide within two years after
the date of this Agreement, or if the Director has made any material
misstatement of fact on any application for life insurance purchased by the
Bank.

 

Article 8

Claims and Review Procedures

 

8.1           Claims Procedure.  The Bank shall notify any person or entity that
makes a claim against the Agreement (the “Claimant”) in writing, within ninety
(90) days of Claimant’s written application for benefits, of Claimant’s
eligibility or ineligibility for benefits under the Agreement. If the Bank
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (l) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the Claimant
to perfect Claimant’s claim, and a description of why it is needed, and (4) an
explanation of the Agreement’s claims review procedure and other appropriate
information as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Bank determines that there are special circumstances requiring
additional time to make a decision, the Bank shall notify the Claimant of the
special circumstances and the date by

 

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which a decision is expected to be made, and may extend the time for up to an
additional ninety-day period.

 

8.2           Review Procedure.  If the Claimant is determined by the Bank not
to be eligible for benefits, or if the claimant believes that claimant is
entitled to greater or different benefits, the Claimant shall have the
opportunity to have such claim reviewed by the Bank by filing a petition for
review with the Bank within sixty (60) days after receipt of the notice issued
by the Bank. Said petition shall state the specific reasons which the Claimant
believes entitle Claimant to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Bank of the petition, the Bank shall
afford the claimant (and counsel, if any) an opportunity to present Claimant’s
position to the Bank orally or in writing, and the Claimant (and counsel) shall
have the right to review the pertinent documents. The Bank shall notify the
Claimant of its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated to be
understood by the Claimant and the specific provisions of the Agreement on which
the decision is based. If, because of the need for a hearing, the sixty-day
period is not sufficient, the decision may be deferred for up to another
sixty-day period at the election of the Bank, but notice of this deferral shall
be given to the Claimant.

 

Article 9

Amendments and Termination

 

This Agreement may be amended or terminated only by a written agreement signed
by the Bank and the Director, except as specified in Article 7.

 

Article 10

Miscellaneous

 

10.1         Binding Effect.  This Agreement shall bind the Director and the
Bank, and their beneficiaries, survivors, executors, successors, administrators
and transferees.

 

10.2         No Guarantee of Service.  This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Bank, nor does it interfere with the shareholders’ rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director’s right to terminate service at any time.

 

10.3         Non-Transferability.  Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

 

10.4         Tax Withholding. The Bank shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.

 

10.5         Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the Commonwealth of Pennsylvania, except to the extent
preempted by the laws of the United States of America. This Agreement shall also
be

 

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interpreted as is minimally required to qualify any payment hereunder as not
triggering any penalty on the Director pursuant to Code Section 409A and the
regulations promulgated thereunder.

 

10.6         Unfunded Arrangement.  The Director and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Bank to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment by creditors. Any insurance on the Director’s life is a general
asset of the Bank to which the Director and beneficiary have no preferred or
secured claim.

 

10.7         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 the 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. In the event the beneficiary has a liability hereunder, the beneficiary
may petition the Bank for a lump sum payment in an amount not to exceed the
beneficiary’s liability hereunder.

 

10.8         Entire Agreement.  This Agreement constitutes the entire agreement
between the Bank and the Director as to the subject matter hereof. No rights are
granted to the Director by virtue of this Agreement other than those
specifically set forth herein.

 

10.9         Reorganization. The Bank shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Bank.

 

10.10       Administration. The Bank shall have powers which are necessary to
administer this Agreement, including but not limited to:

 

10.10.1    Interpreting the provisions of this Agreement;

 

10.10.2    Establishing and revising the method of accounting for the Agreement.

 

10.10.3    Maintaining a record of benefit payments; and

 

10.10.4    Establishing rules and prescribing any forms necessary or desirable
to administer the Agreement.

 

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10.11       Named Fiduciary.  The Bank shall be the named fiduciary and plan
administrator under this Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the service of advisors and the delegation of ministerial duties to
qualified individuals.

 

IN WITNESS WHEREOF, the Director and a duly authorized Bank officer have signed
this Agreement.

 

 

 

BANK:

ATTEST:

 

RIVERVIEW NATIONAL BANK

 

 

 

 

 

By

 

 

 

 

 

 

Title

 

 

 

 

 

 

Date

 

 

 

By execution hereof, Riverview Financial Corporation, consents to and agrees to
be bound by the terms and conditions of this Agreement.

 

 

ATTEST:

 

CORPORATION:

 

 

RIVERVIEW FINANCIAL CORPORATION

 

 

 

 

 

By

 

 

 

 

 

 

Title

 

 

 

 

 

 

Date

 

 

 

 

 

 

 

WITNESS:

 

DIRECTOR:

 

 

 

 

 

 

 

 

 

 

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EXHIBIT A

 

RIVERVIEW NATIONAL BANK

DIRECTOR DEFERRED FEE AGREEMENT

 

Election Form

 

Deferral Election (Initial and Complete One):

 

o

 

I elect to defer         % of my fees for          months, increasing or
decreasing to         % commencing in                                      .

 

 

(mo./yr.)

 

 

 

o

 

I elect to defer $                per month for          months, increasing or
decreasing to $                   per month commencing in
                                                         .

 

 

 

(mo./yr.)

 

Benefit Age:

 

I elect a Normal Benefit Age of             .

 

Timing of Payout:

 

If I terminate service after Normal Benefit Age, I elect to have my benefits
distributed commencing within 30 days of (Initial One).

 

o

 

Normal Benefit Age

 

 

 

o

 

Termination of Service

 

If I terminate service before Normal Benefit Age due to Disability, I elect to
have my benefits distributed commencing within 30 days of (Initial One):

 

o

 

Normal Benefit Age

 

 

 

o

 

Termination of Service

 

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If a Change in Control occurs prior to Normal Benefit Age, I elect to have my
benefits distributed commencing within 30 days of (Initial One):

 

o

 

Normal Benefit Age

 

 

 

o

 

Termination of Service

 

 

 

o

 

The date the Change in Control occurs

 

Form of Payment:

 

I elect to have my benefits paid in the following form (initial (a) or (b) for
each category):

 

Section

 

Triggering

 

 

 

Annuitized over

Reference

 

Event

 

Lump Sum

 

120 Months

 

 

 

 

 

 

 

4.1.2

 

Normal Benefit Age

 

(a)      

 

(b)      

 

 

 

 

 

 

 

4.2.2

 

Early Termination

 

(a)      

 

(b)      

 

 

 

 

 

 

 

4.3.2

 

Disability

 

(a)      

 

(b)      

 

 

 

 

 

 

 

4.4.2

 

Change in Control

 

(a)      

 

(b)      

 

 

 

 

 

 

 

5.1.2

 

Death

 

(a)      

 

(b)      

 

I understand that I may change the form of benefit elected provided such change
is made at least 12 months prior to the date the payment becomes due.

 

Signature:

 

 

 

 

 

Date:

 

 

 

Accepted by the Bank this          day of                               ,
20    .

 

RIVERVIEW NATIONAL BANK

 

By:

 

 

 

 

 

Title:

 

 

 

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RIVERVIEW NATIONAL BANK

 

DIRECTOR DEFERRED FEE AGREEMENT

 

Beneficiary Designation

 

I designate the following as beneficiary of benefits under the Director Deferred
Fee Agreement payable following my death:

 

Primary Beneficiary:

 

Name:

 

 

Relationship:

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent Beneficiary:  (to receive the benefits if there is no surviving
Primary Beneficiary or should the Primary Beneficiary die before receiving all
benefit payments under Article 5)

 

Name:

 

 

Relationship:

 

 

 

 

 

Address:

 

 

 

 

 

 

 

Note:      To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.

 

I understand that I may change these beneficiary designations by filing a new
written designation with the Bank. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.

 

Signature:

 

 

 

 

 

 

 

Date:

 

 

 

 

Accepted by the Bank this              day of
                                            , 20    .

 

By:

 

 

 

 

 

 

 

Title:

 

 

 

 

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