**EXHIBIT 10.8**

 

****2009 STOCKOPTION PLAN****

 

1.             **Purpose. **The purpose of the 2009 StockOption Plan (the “Plan”) is to advance the development, growth and financialcondition of Riverview Financial Corporation (the “Company”), by providingincentives through participation in the appreciation of the common stock of theCompany to secure, retain and motivate Company directors, officers and keyemployees who may be responsible for the operation and for management of theaffairs of the Company and to align such person’s interests with those of theCompany’s shareholders.

 

2.             **Term. ****The Plan will becomeeffective on January 7, 2009, provided that if incentive stock optionsshall be awarded, the Plan shall be subject to the approval of the Company’sshareholders at the Company’s meeting of shareholders (“Effective Date”). **Any andall incentive stock options and rights awarded under the Plan (the “Awards”)before it is approved by the Company’s shareholders shall be conditioned upon,and may not be exercised before, receipt of shareholder approval, and shalllapse upon failure to receive such approval. Unless previously terminated by the Board, the Plan shall terminate on,and no options shall be granted after, the tenth anniversary of the effectivedate of the Plan.

 

3.             **Stock. **Shares of the Company’scommon stock (the “Stock”) that may be issued or transferred under this Planshall not exceed, in the aggregate, 170,000 shares, as may be adjusted pursuantto Section 19 hereof.  Shares may beeither authorized and unissued shares, authorized shares, issued by andsubsequently reacquired by the Company as treasury stock or shares purchased inthe open market.  Under no circumstancesshall any fractional shares be awarded under the Plan.  Except as may be otherwise provided in thePlan, any Stock subject to an Award that, for any reason, lapses or terminatesprior to exercise, shall again become available for grant under the Plan.  While the Plan is in effect, the Companyshall reserve and keep available the number of shares of Stock needed tosatisfy the requirements of the Plan. The Company shall apply for any requisite governmental authority toissue shares of stock under the Plan. The Company’s failure to obtain any such governmental authority, deemednecessary by the Company’s legal counsel for the lawful issuance and sale ofStock under the Plan, shall relieve the Company of any duty, or liability, forthe failure to issue or sell the Stock.

 

4.             **Administration. **The ability to control andmanage the operation and administration of the Plan shall be vested in theBoard or in a committee of two or more members of the Board, selected by theBoard (the “Committee”).  The Committeeshall have the authority and discretion to interpret the Plan, to establish,amend and rescind any rules and regulations relating to the Plan, todetermine the terms and provisions of any agreements made pursuant to the Plan,and to make any and all determinations that may be necessary or advisable forthe administration of the Plan.  Anyinterpretations of the Plan by the Committee and any decisions made by theCommittee under the Plan are final 

 

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and binding upon all participants and any person claiming through aparticipant, unless otherwise determined by a majority of the disinterestedmembers of the Board.

 

The Committee shall be responsible and shall have full, absolute andfinal power of authority to determine what, to whom, when and under what factsand circumstances Awards shall be made, the form, number, terms, conditions andduration thereof, including but not limited to when exercisable, the number ofshares of Stock subject thereto, and the stock option exercise prices.  Notwithstanding the foregoing, however, theCommittee shall not set the exercise price of any stock option at any pricebelow the fair market price of the Stock on the date of grant.  The date of grant shall be for all purposesthe date on which the Board or Committee makes the determination granting suchOption.  The Board, in the exercise ofits discretion under Section 12, shall have approved the methodology ofestablishing the fair market value of the Stock, and the Committee or theBoard, at or prior to the time the grant is approved, shall also have approveda written description of the rationale and methodology by which the fair marketvalue is being determined.  The Committeeshall make all other determinations and decisions, take all actions and do allthings necessary or appropriate in and for the administration of the Plan.  No member of the Committee or of the Boardshall be liable for any decision, determination or action made or taken in goodfaith by such person under or with respect to the Plan or its administration.  The Committee may delegate ministerial dutiesto any other person or persons, however it may not delegate the grant of anAward.

 

5.             **Awards. **Awards may be made under thePlan in the form of:  (a) “QualifiedOptions” to purchase Stock, which are intended to qualify for certain taxtreatment as incentive stock options under Sections 421 and 422 of the InternalRevenue Code of 1986, as amended and the regulations and guidance promulgatedthereunder (“Code”) or (b) “Non-Qualified Options” to purchase Stock,which are not intended to qualify under Sections 421 through 424 of the Code(collectively “Stock Options”).  Morethan one Award may be granted to an eligible person, and the grant of any Awardshall not prohibit the grant of another Award, either to the same person orotherwise, or impose any obligation to exercise on the participant.  All Awards and the terms and conditionsthereof shall be set forth in written agreements, in such form and content asapproved by the Committee from time to time (either at a meeting or byunanimous written consent), and shall be subject to the provisions of this Planwhether or not contained in such agreements (“Award Agreement”).  Multiple Awards for a particular person maybe set forth in a single Award Agreement or in multiple Award Agreements, asdetermined by the Committee, but in all cases each agreement for one or moreAwards shall identify each of the Awards thereby represented as a QualifiedOption or Non-Qualified Option.

 

Execution of an Award Agreement shall constitute the participant’sirrevocable agreement to, and acceptance of, the terms and conditions of theAward set forth in such agreement and of the terms and conditions of the Planapplicable to such Award.  AwardAgreements may differ from time to time and from participant to participant.

 

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6.             **Eligibility. **Persons eligible to receiveAwards shall be the directors, key officers and other employees of the Company,as determined by the Committee.  Anindividual who owns more than ten percent (10%) of the total combined votingpower of all classes of outstanding Stock of the Company shall not be eligiblefor the grant of a Qualified Option, unless the option price is one hundred tenpercent (110%) of the fair market value of the stock subject to the option andthe option by its terms is not exercisable after the expiration of five (5) yearsfrom the date such option is granted.  Aperson’s eligibility to receive an Award shall not confer upon him or her anyright to receive an Award.  Except asotherwise provided, a person’s eligibility to receive, or actual receipt of anAward under the Plan shall not limit or affect his or her benefits under oreligibility to participate in any other incentive or benefit plan or program ofthe Company or any of its affiliates.

 

7.             **QualifiedOptions. **In addition toother applicable provisions of the Plan, all Qualified Options and Awardsthereof shall be under and subject to the following terms and conditions:

 

(a)           No Qualified Option shall be awarded more than ten (10) yearsafter the date the Plan is adopted by the Board or the date the Plan isapproved by the Company’s shareholders, whichever is earlier;

 

(b)           The time period during which any Qualified Option isexercisable, as determined by the Committee, shall not commence before theexpiration of six (6) months or continue beyond the expiration of ten (10) yearsafter the date the Qualified Option is awarded;

 

(c)           At the time a Qualified Option is awarded, the aggregatefair market value of the Stock subject thereto and of any Stock or othercapital stock with respect to which incentive stock options qualifying underSections 421 and 422 of the Code are exercisable for the first time by theparticipant during any calendar year under the Plan and any other plans of theCompany or its affiliates, shall not exceed $100,000.00;

 

(d)           No Qualified Option shall be awarded to any person if, atthe time of the Award, the person owns shares of the stock of the Companypossessing more than ten percent (10%) of the total combined voting power ofall classes of stock of the Company or its affiliates, unless, at the time theQualified Option is awarded, the exercise price of the Qualified Option is atleast one hundred and ten percent (110%) of the fair market value of the Stockon the date of grant and the option, by its terms, is not exercisable after theexpiration of five (5) years from the date it is awarded;

 

(e)           If a participant, who was awarded a Qualified Option,ceases to be employed by the Company for any reason other than his or herdeath, the Committee may permit, but is not obligated to permit, theparticipant thereafter to 

 

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exercise the option during its remaining termfor a period of not more than three (3) months after cessation ofemployment to the extent that the Qualified Option was then and remainsexercisable, unless such employment cessation was due to the participant’sdisability, as defined in Section 409A of the Code, in which case thethree (3) month period shall be twelve (12) months; if the participantdies while employed by the Company, the Committee may permit the participant’squalified personal representatives, or any persons who acquire the QualifiedOption pursuant to his or her Will or laws of descent and distribution, toexercise the Qualified Option during its remaining term for a period of notmore than twelve (12) months after the participant’s death to the extent thatthe Qualified Option was then and remains exercisable; the Committee may imposeterms and conditions upon and for the exercise of a Qualified Option after thecessation of the participant’s employment or his or her death;

 

(f)            The purchase price of Stock subject to any QualifiedOption shall not be less than the Stock’s fair market value at the time theQualified Option is awarded and shall not be less than the Stock’s par value;and

 

(g)           Qualified Options may not be sold, transferred or assignedby the participant, except as designated by the participant by Will and thelaws of descent and distribution, and such Option shall only be exercisableduring the participant’s lifetime by him or her.

 

8.             **Non-QualifiedOptions. **In addition toother applicable provisions of the Plan, all Non-Qualified Options and Awardsthereof shall be under and subject to the following terms and conditions:

 

(a)           The time period during which any Non-Qualified Option isexercisable, as determined by the Committee shall not commence before theexpiration of six (6) months or continue beyond the expiration of ten (10) yearsafter the date the Non-Qualified Option is awarded;

 

(b)           If a participant, who was awarded a Non-Qualified Option,ceases to be eligible under the Plan, before lapse or full exercise of theoption, the Committee may permit, but is not obligated to permit, theparticipant to exercise the option during its remaining term, to the extentthat the option was then and remains exercisable, or for such time period andunder such terms and conditions as may be prescribed by the Committee;

 

(c)           The purchase price of a share of Stock subject to anyNon-Qualified Option shall not be less than the Stock’s fair market value atthe time the non-qualified option is awarded and shall not be less than theStock’s par value; and

 

(d)           Except as otherwise provided by the Committee,Non-Qualified Stock Options granted under the Plan are not transferable, exceptas determined 

 

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by the Committee or as designated by theparticipant by Will and the laws of descent and distribution.

 

9.             *Vesting. *StockOptions, or portions thereof, are exercisable at such time or times asdetermined by the Committee in its discretion at or after grant.  The Committee may provide that a vestingschedule shall be specified in an Award Agreement.  If the Committee provides that any StockOption becomes vested over a period of time or upon performance events, in fullor in installments, the Committee may waive or accelerate such vestingprovisions at any time.  Unless otherwisedetermined by the Committee in connection with the grant and set forth in theAward Agreement, all unvested Stock Options shall immediately vest upon thedeath or disability of the participant or upon a change in ownership or effectivecontrol of the Company or in the ownership of a substantial portion of theassets of the Company as defined in Code Section 409A.

 

10.           **Exercise. **Except as otherwise providedin the Plan, vested Awards may be exercised in whole or in part by givingwritten notice thereof to the Secretary of the Company, or his or her designee,identifying the Award to be exercised, the number of shares of Stock withrespect thereto, and other information pertinent to exercise of the Award.  The purchase price of the shares of Stockwith respect to which an Award is exercised shall be paid with the writtennotice of exercise, either in cash or in securities of the Company, (includingsecurities issuable hereunder), at its then current fair market value, or inany combination thereof, as the Committee shall determine or by another methodpermitted by law and affirmatively approved by the Committee; further providedhowever, that no such manner of exercise shall be permitted if such exercisewould violate Section 402 of the Sarbanes-Oxley Act of 2002.

 

**The Committee may withhold its approval forany method of payment for any reason, in its sole discretion, including but notlimited to concerns that the proposed method of payment will result in adversefinancial accounting treatment, adverse tax treatment for the Company or aparticipant or a violation of any law applicable to the Company from time totime, and related regulations and guidance.**

 

Stock acquired pursuant to the exercise of an Qualified Option may notbe tendered as payment unless the holding period requirements of Code Section 422have been satisfied, and Stock not acquired pursuant to the exercise of anQualified Option may not be tendered as payment unless it has been held,beneficially and of record, for at least six (6) months (or such longertime as may be required by applicable securities laws or accounting principlesto avoid adverse consequences to the Company or the participant).

 

Funds received by the Company from the exercise of any Award shall beused for its general corporate purposes.

 

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The number of shares of Stock subject to an Award shall be reduced bythe number of shares of Stock with respect to which the participant hasexercised rights under the Award.

 

**11.          ****Special Limitations on Stock Option Awards****.  Unless an Award Agreement approved by theCommittee provides otherwise, Stock Options awarded under this Plan areintended to meet the requirements for exclusion from coverage under Code Section 409Aand applicable Treasury regulations and all Awards shall be construed andadministered accordingly.**

 

12.           **Right of FirstRefusal. **Each writtenagreement for an Award may contain a provision that requires as a condition toexercising a Qualified Option or a Non Qualified Option that the participantagree prior to selling, transferring or otherwise disposing of any shares ofStock obtained through the exercise of the Award to first offer the shares ofStock to the Company for purchase.  Theterms and conditions of such right of first refusal shall be determined by theCommittee in its sole and absolute discretion, provided that the purchase priceshall be at least equal to the Stock’s fair market value as determined underParagraph 14 below, and shall be subject to all applicable federal and statelaws, rules and regulations.

 

13.           **Withholding. **When a participant exercisesa stock option awarded under the Plan, the Company, in its discretion and asrequired by law, may require the participant to remit to the Company an amountsufficient to satisfy fully any federal, state and other jurisdictions’ incomeand other tax withholding requirements prior to the delivery of anycertificates for shares of Stock.  At theCommittee’s discretion, remittance may be made in cash, shares already held bythe participant or by the withholding by the Company of sufficient sharesissuable pursuant to the option to satisfy the participant’s withholdingobligation.

 

14.           *Fair Market Value*.

 

(a)           If the Stock is listed on an established stock exchange orexchanges, the fair market value per share of the Stock shall be the compositeclosing sale price for such a share on the relevant day.  If no sale of Stock has occurred on that day,the fair market value shall be determined by reference to such price for thenext preceding day on which a sale occurred.

 

(b)           In the event that the Stock is not traded on anestablished stock exchange, then the fair market value per share of Stock willbe the price established by the Committee in good faith and in compliance withall applicable federal regulations.

 

15.           **Amendment. **To the extent permitted byapplicable law, the Board may amend, suspend, or terminate the Plan at anytime.  The amendment or termination ofthis Plan shall not, without the consent of the participants, alter or impairany rights or obligations under any Award previously granted hereunder.

 

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From time to time, the Committee may rescind, revise and add to any ofthe terms, conditions and provisions of the Plan or of an Award as necessary,or appropriate to have the Plan and any Awards thereunder be or remainqualified and in compliance with all applicable laws, rules andregulations, and the Committee may delete, omit or waive any of the termsconditions or provisions that are no longer required by reason of changes ofapplicable laws, rules or regulations, including but not limited to, theprovisions of Sections 421 and 422 of the Code, Section 16 of theSecurities Exchange Act of 1934, as amended, (the “1934 Act”) and the rules andregulations promulgated by the Securities and Exchange Commission. Withoutlimiting the generality of the preceding sentence, each Qualified Option shallbe subject to such other and additional terms, conditions and provisions as theCommittee may deem necessary or appropriate in order to qualify as a incentivestock option under Section 422 of the Code.

 

16.           **ContinuedEmployment. **Nothing inthe Plan or any Award shall confer upon any participant or other persons anyright to continue in the employ of, or maintain any particular relationshipwith, the Company or its affiliates, or limit or affect any rights, powers orprivileges that the Company or its affiliates may have to supervise, disciplineand terminate the participant.  However,the Committee may require, as a condition of making and/or exercising anyAward, that a participant agree to, and in fact provide services, either as anemployee or in another capacity, to or for the Company for such time period asthe Committee may prescribe.  Theimmediately preceding sentence shall not apply to any Qualified Option, to theextent such application would result in disqualification of the option underSections 421 and 422 of the Code.

 

17.           **GeneralRestrictions. **If theCommittee or Board determines that it is necessary or desirable to: (a) list,register or qualify the Stock subject to the Award, or the Award itself, uponany securities exchange or under any federal or state securities or other laws,(b) obtain the approval of any governmental authority, or (c) enterinto an agreement with the participant with respect to disposition of any Stock(including, without limitation, an agreement that, at the time of theparticipant’s exercise of the Award, any Stock thereby acquired is and will beacquired solely for investment purposes and without any intention to sell ordistribute the Stock), then such Award shall not be consummated, in whole or inpart, unless the listing, registration, qualification, approval or agreement,as the case may be, shall have been appropriately effected or obtained to thesatisfaction of the Committee and legal counsel for the Company.

 

18.           **Rights. **Except as otherwise providedin the Plan, participants shall have no rights as a holder of the Stock unlessand until one or more certificates for the shares of Stock are issued anddelivered to the participant. To the extent the shares of Stock areuncertificated, references in the Plan to certificates shall be deemed toinclude references to any book-entry evidencing such shares.

 

19.           **Adjustments. **In the event that the sharesof common stock of the Company, as presently constituted, shall be changed intoor exchanged for a different number or kind of shares of common stock or othersecurities of the Company or of 

 

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another Company (whether by reason of merger, consolidation,recapitalization, reclassification, split-up, combination of shares orotherwise) or if the number of such shares of common stock shall be increasedthrough the payment of a stock dividend, stock split or similar transaction,then, there shall be substituted for or added to each share of common stock ofthe Company that was theretofore appropriated, or which thereafter may becomesubject to an option under the Plan, the number and kind of shares of commonstock or other securities into which each outstanding share of the common stockof the Company shall be so changed or for which each such share shall beexchanged or to which each such shares shall be entitled, as the case may be.Each outstanding Award shall be appropriately amended as to price and otherterms, as may be necessary to reflect the foregoing events.

 

If there shall be any other change in the number or kind of theoutstanding shares of the common stock of the Company, or of any common stockor other securities in which such common stock shall have been changed, or forwhich it shall have been exchanged, and if a majority of the disinterestedmembers of the Committee shall, in its sole discretion, determine that suchchange equitably requires an adjustment in any Award that was theretoforegranted or that may thereafter be granted under the Plan, then such adjustmentshall be made in accordance with such determination.

 

The grant of an Award under the Plan shall not affect in any way theright or power of the Company to make adjustments, reclassifications,reorganizations or changes of its capital or business structure, to merge, toconsolidate, to dissolve, to liquidate or to sell or transfer all or any part ofits business or assets.

 

Fractional shares resulting from any adjustment in Awards pursuant tothis Section 19 may be settled as a majority of the members of the Boardor of the Committee, as the case may be, shall determine.

 

To the extent that the foregoing adjustments relate to common stock orsecurities of the Company, such adjustments shall be made by a majority of themembers of the Board or of the Committee, as the case may be, whosedetermination in that respect shall be final, binding and conclusive. TheCompany shall give notice of any adjustment to each holder of an Award that isso adjusted.

 

Notwithstanding the foregoing, the foregoing adjustments shall be madein compliance with:  (i) Sections422 and 424 of the Code with respect to incentive stock options (ii) TreasuryDepartment Regulation Section 1.424-1 (and any successor) with respect tonon-statutory, non-incentive stock options applied as if the non-statutory,non-incentive stock options were incentive stock options; and (iii) Section 409A of the Code, to the extent necessary to avoid its application or avoidadverse tax consequences thereunder.

 

20.           **Forfeiture. **Notwithstanding anything tothe contrary in this Plan, if the Committee finds, after full consideration ofthe facts presented on behalf of the Company and the involved participant, thathe or she has been engaged in fraud, embezzlement, 

 

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theft, commission of a felony, or dishonesty in the course of his orher employment by the Company and such action has damaged the Company, as thecase may be, or that the participant has disclosed trade secrets orconfidential information of the Company or its affiliates (“Cause”), theparticipant shall forfeit all rights under and to all unexercised Awards, andunder and to all exercised Awards under which the Company has not yet deliveredpayment or certificates for shares of Stock (as the case may be), all of whichAwards and rights shall be automatically canceled. The decision of the Committeeas to the cause of the participant’s discharge from employment with the Companyand the damage thereby suffered shall be final for purposes of the Plan, butshall not affect the finality of the participant’s discharge by the Company forany other purposes.  The precedingprovisions of this paragraph shall not apply to any Qualified Option to theextent such application would result in disqualification of the option as anincentive stock option under Sections 421 and 422 of the Code.

 

21.           **Indemnification. **In and with respect to theadministration of the Plan, the Company shall indemnify each member of theCommittee and/or of the Board, each of whom shall be entitled, without furtheraction on his or her part, to indemnification from the Company for all damages,losses, judgments, settlement amounts, punitive damages, excise taxes, fines,penalties, costs and expenses (including without limitation attorneys’ fees anddisbursements) incurred by the member in connection with any threatened,pending or completed action, suit or other proceedings of any nature, whethercivil, administrative, investigative or criminal, whether formal or informal,and whether by or in the right or name of the Company, any class of itssecurity holders, or otherwise, in which the member may be or may have beeninvolved, as a party or otherwise, by reason of his or her being or having beena member of the Committee and/or of the Board, whether or not he or shecontinues to be a member of the Committee or of the Board. The provisions,protection and benefits of this Section shall apply and exist to thefullest extent permitted by applicable law to and for the benefit of allpresent and future members of the Committee and/or of the Board and theirrespective heirs, personal and legal representatives, successors and assigns,in addition to all other rights that they may have as a matter of law, bycontract, or otherwise, except (a) to the extent there is entitlement toinsurance proceeds under insurance coverages provided by the Company on accountof the same matter or proceeding for which indemnification hereunder isclaimed, or (b) to the extent there is entitlement to indemnification fromthe Company, other than under this Section, on account of the same matter orproceeding for which indemnification hereunder is claimed.

 

22.           **Taxes. **The issuance of shares ofcommon stock under the Plan shall be subject to any applicable taxes or otherlaws or regulations of the United States of America and any state or localauthority having jurisdiction there over.

 

**23.          ****Rule 16b-3 Compliance****.  The Plan is intended to comply with allapplicable conditions of Rule 16b-3 of the Exchange Act, as such rule maybe amended from time to time (“Rule 16b-3”).  All transactions involving any participantsubject to Section 16(a) of the Exchange Act shall be subject to theconditions set forth in Rule 16b-3,**

 

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**regardless of whether such conditions are expressly set forth in thisPlan.  Any provision of this Plan that iscontrary to Rule 16b-3 does not apply to such participants.**

 

**24.          ****Successors****.  All obligations of the Company with respectto Awards granted under this Plan are binding on any successor to the Company,whether as a result of a direct or indirect purchase, merger, consolidation orotherwise of all or substantially all of the business and/or assets of theCompany.**

 

**25.          ****Severability****.  In the event any provision of this Plan, orthe application thereof to any person or circumstances, is held illegal orinvalid for any reason, the illegality or invalidity shall not affect theremaining parts of this Plan, or other applications, and this Plan is to beconstrued and enforced as if the illegal or invalid provision had not beenincluded.**

 

**26.          ****Governing Law****.  To the extent not preempted by Federal law,this Plan and all Award Agreements pursuant thereto are construed in accordancewith and governed by the laws of the Commonwealth of Pennsylvania.  This Plan is not intended to be governed bythe Employee Retirement Income Security Act and shall be so construed andadministered.**

 

**27.          ****Legal Requirements****.  No Awards shall be granted and the Companyshall have no obligation to make any payment under the Plan, whether in Shares,cash, or a combination thereof, unless such payment is, without further actionby the Committee, in compliance with all applicable Federal and state laws andregulations, including, without limitation, the Code and Federal and statesecurities laws.**

 

28.           **Miscellaneous.**

 

(a)           Any reference contained in this Plan to particular sectionor provision of law, rule or regulation, including but not limited to theCode and the 1934 Act, shall include any subsequently enacted or promulgatedsection or provision of law, rule or regulation, as the case may be.  With respect to persons subject to Section 16of the 1934 Act, transactions under this Plan are intended to comply with allapplicable conditions of Section 16 and the rules and regulationspromulgated thereunder, or any successor rules and regulations that may bepromulgated by the Securities and Exchange Commission, and to the extent anyprovision of this Plan or action by the Committee fails to so comply, it shallbe deemed null and void, to the extent permitted by applicable law and deemedadvisable by the Committee.

 

(b)           Where used in this Plan, the plural shall include thesingular, and unless the context otherwise clearly requires, the singular shallinclude the plural; and the term “affiliates” shall mean each and everysubsidiary and any parent of the Company.

 

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(c)           The captions of the numbered Sections contained in thisPlan are for convenience only, and shall not limit or affect the meaning,interpretation or construction of any of the provisions of the Plan.

 

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