**EXHIBIT 10.2**

 

**AMENDED AND RESTATED**

**EXECUTIVE EMPLOYMENT AGREEMENT**

 

THISAGREEMENT is made as of the 31st day of December 2008,among Riverview Financial Corporation (“Corporation”), with principal officesat 3rd and Market Streets Halifax, PA 17032,  Riverview National Bank (“Bank”) withprincipal offices at 101 Lincoln Street, Marysville, Pennsylvania, 17053, andKirk D. Fox 1575 Shippen Dam Road, Millersburg, Pennsylvania (hereinafterreferred to as “EXECUTIVE”).

 

WITNESSETH:

 

WHEREAS,Halifax National Bank (“Halifax”) is the wholly owned subsidiary of HNB Bancorp, Inc.(“HNB”);

 

WHEREAS,The First National Bank of Marysville (“Marysville”) is the wholly ownedsubsidiary of First Perry Bancorp, Inc. (“First Perry”);

 

WHEREAS,the Executive is Executive Vice President of Halifax;

 

WHEREAS,Executive entered into an Executive Employment Agreement with Halifax on December 1,2006, as amended on June 18, 2008;

 

WHEREAS,First Perry and HNB entered into an Agreement and Plan of Consolidation datedon or about June 18, 2008 (“Consolidation Agreement”) pursuant to whichFirst Perry and HNB shall consolidate into Corporation and Marysville andHalifax shall consolidate into the Bank (“Consolidation”);

 

WHEREAS,Executive shall become the President of the Bank;

 

WHEREAS,the parties desire to amend and restate Executive’s employment agreement as aresult of the Consolidation;

 

WHEREAS,this Amended and Restated Executive Employment Agreement shall become effectiveupon the Effective Date of the Consolidation as defined in the ConsolidationAgreement;

 

NOWTHEREFORE, in consideration of the mutual covenants set forth below andintending to be legally bound, the parties agree as follows:

 

I.  TERM OF EMPLOYMENT

 

1.                                       The Bank herebyemploys the Executive as President as set forth below, and Executive herebyaccepts this employment and agrees to render such services to the 

 

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Bankon the terms and conditions as set forth in this Agreement.  This Agreement shall be for a three (3) yearperiod (the “Employment Period”) beginning on the Effective Date of theConsolidation, and if not previously terminated pursuant to the terms of thisAgreement, shall end three years later (the “Initial Term”).  The employment Period shall be extendedautomatically for one (1) additional year on the anniversary date of thisAgreement (“Renewal Date”) and then on each anniversary of the Renewal Date ofthis Agreement thereafter, unless Bank or Executive gives contrary writtennotice to the other ninety (90) days prior to the anniversary date so that uponsuch anniversary of the Renewal Date if notice had not been previously given asprovided in this Section I.1, the Employment Period shall continue for athree (3) year period thereafter. References in the Agreement to “Employment Period” shall refer to theInitial Term of this Agreement and any extensions to the Initial Term.  It is the intention of the parties that thisAgreement be “Evergreen” unless (i) either party gives written notice tothe other party of his or its intention not to renew this Agreement as providedabove or (ii) this Agreement is terminated pursuant to Section VI ofthis Agreement.

 

2.                                       During the termof this Agreement the Executive shall perform such executive services for theBank as are consistent with his title and as are assigned to him by the Bank’sBoard of Directors.

 

3.                                       During the termof this Agreement, the Executive shall devote his best efforts, including suchportion of his time and effort to the affairs and business of the Bank as hehas customarily provided to this date.

 

4.                                       The services ofExecutive shall be rendered principally in Pennsylvania, but he shall do suchtraveling on behalf of the Bank as may be reasonably required.

 

II.  COMPETITIVE ACTIVITIES

 

Executiveagrees that during the term of his employment except with the express consentof the Board of Directors, he will not, directly or indirectly, engage orparticipate in, become a director of, or render advisory or other services for,or make any financial investment in any firm, corporation, business entity orbusiness enterprise competitive with the Bank; provided, however, thatExecutive shall not thereby be precluded or prohibited from owning passiveinvestments, including investments in the securities of other financialinstitutions, so long as such ownership does not require him to devotesubstantial time to management or control of the business or activities inwhich he has invested.

 

III.  COMPENSATION

 

TheBank will compensate Executive for Executive’s services during the term of theAgreement at a minimum Annual Base Salary of $130,000 per year, payable at thesame times as salaries are payable to other executive employees. Bank may fromtime to time increase Executive’s Annual Base Salary, and any and all suchincreases shall be deemed to constitute amendments to this Section toreflect the increased amounts.

 

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IV.  PARTICIPATION IN RETIREMENTAND MEDICAL PLANS,

LIFE INSURANCE AND DISABILITY

 

1.                                       Executive shallbe entitled to participate in any employee benefit plan of the Bank relating topension, profit-sharing or other retirement benefits and health or medicalcoverage or reimbursement plans that the Bank may adopt for the benefit of itsemployees.

 

2.                                       In the eventthe Executive suffers from a Disability as defined in Section IV.3, heshall nevertheless continue to receive an amount equal to and no greater than100% of his annual base salary, less amounts payable under any disability planof the Bank, for the first three months of his disability.  Thereafter, he shall only be entitled to anyamount provided for in the Bank’s long-term disability policy in effect at thetime of the payments determined therein.

 

3.                                       For purposes ofthis Agreement, “Disability” means the Executive is unable to engage in anysubstantial gainful activity by reason of any medically determinable physicalor mental impairment that can be expected to result in death or can be expectedto last for a continuous period of not less than twelve (12) months.  The Executive will be deemed disabled if theSocial Security Administration has determined that he is disabled or if acarrier of any group disability insurance policy provided by the Bank or madeavailable by the Bank to its employees and covering the Executive determinesthat he is disabled provided that the policy’s definition of disabilitycomplies with the definition of disability under IRC Section 409A.

 

V.  ADDITIONAL COMPENSATION ANDBENEFITS

 

1.                                       During the termof the Agreement, Executive will be entitled to participate in and receive thebenefits of any stock option, profit sharing, or other plan, benefit orprivilege given to employees and executives of the Bank or its subsidiaries andaffiliates which may come into existence hereafter, to the extent commensuratewith his duties and responsibilities, as fixed by the Bank’s Board of Directorsor any committee of such Board or of the Bank selected for such purpose.  To the extent Executive is otherwise eligibleand qualifies, he shall participate in and receive such benefits orprivileges.  The Bank shall not make anychanges in such plans, benefits or privileges which would adversely affectExecutive’s rights or benefits, unless such change occurs pursuant to a programapplicable to all executive officers of the Bank and does not result in aproportionately greater adverse change in the rights or benefits to Executiveas compared with any other executive officer of the Bank.  Nothing paid to Executive under any plan orarrangement presently in effect or made available in the future shall be deemedto be in lieu of the salary payable to Executive pursuant to Section III.

 

2.                                       For servicesperformed by Executive under this Agreement, Bank has established a bonusprogram for Executive which is attached hereto as Exhibit A.  The 

 

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paymentof any such bonuses shall not reduce or otherwise affect any other obligationof Bank to Executive provided for in this Agreement.

 

VI.  TERMINATION

 

1.                                       In the eventExecutive’s employment is terminated, Executive’s right to compensation andother benefits under this agreement shall be as set forth hereinafter in this Section VI.  In the event the Executive is terminated in amanner which violates the provisions of this Agreement, as determined by acourt of competent jurisdiction, Bank shall reimburse Executive for allreasonable costs, including attorney’s fees in challenging suchtermination.  Such reimbursement shall bein addition to all rights to which the Executive is otherwise entitled underthis Agreement.

 

2.                                       (a)  If achange in control (hereinafter referred to as “CIC”) of the Bank shall occur,as defined in 2(b), and without Executive’s express written consent,thereafter, there shall be:

 

(i) an involuntary termination of Executive without Cause as defined in Section VI8;

 

(ii) an assignment to Executive of duties inconsistent with Executive’s positions,duties, responsibilities and status with the Bank immediately prior to a CIC;

 

(iii) a change in Executive’s reporting responsibilities, titles or offices in effectimmediately prior to a CIC of the Bank, including any removal of the Executivefrom, or any failure to reelect Executive to any of such positions, except inconnection with a termination for disability or retirement;

 

(iv) a reduction by the Bank in Executive’s annual salary in effect immediatelyprior to a CIC or as the same may be increased from time to time; or

 

(v) the failure of the Bank to continue in effect any bonus, benefit orcompensation plan, life insurance plan, health and accident plan or disabilityplan in which the Executive is participating at the time of a CIC of the Bank,or the taking of any action by Bank which would adversely affect Executive’sparticipation in or materially reduce Executive’s benefits under any of suchplans;

thenat the option of the Executive, Executive shall within ninety (90) days of theoccurrence of any of the foregoing events, provide notice to Bank of theexistence of the condition and provide Bank thirty (30) days in which to curesuch condition.  In the event that Bankdoes not cure the condition within thirty (30) days of such notice, Executive 

 

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mayresign from employment for Good Reason by delivering written notice (“Notice ofTermination”) to Bank.

 

(b) For purposes of this Agreement, the definition of a “Change in Control” (CIC)of the Bank shall mean:

 

(1)(a) a merger, consolidation or division involving Bank or itsparent company, (b) a sale, exchange, transfer or other disposition ofsubstantially all of the assets of Bank, or (c) a purchase by Bank ofsubstantially all of the assets of purchase or disposition a majority of themembers of the Board of Directors of the legal entity resulting from orexisting after any such transaction and of the Board of Directors of suchentity’s parent corporation, if any, are former members of the Board ofDirectors of Bank; or

 

(2)  any “person” (as such term is used in Sections 13(d) and14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), otherthan Bank or any “person” who on the date hereof is a director or officer ofBank is or becomes the “beneficial owner” (as defined in Rule 13d-3 underthe Exchange Act), directly or indirectly, of securities of Bank or its parentcompany representing thirty five (35%) percent or more of the combined votingpower of Bank’s or its parent company’s then outstanding securities; or

 

(3)  during any period of one (1) year during the term ofExecutive’s employment under this Agreement, individuals who at the beginningof such period constitute the Board of Directors of Bank cease for any reasonto constitute at least a majority thereof, unless the election of each directorwho was not a director at the beginning of such period has been approved inadvance by directors representing at least two-thirds of the directors then inoffice who were directors at the beginning of the period.

 

Notwithstanding b(1), (2), or (3) or any other provision above,the consolidation of First Perry Bancorp, Inc. and HNB Bancorp, Inc,pursuant to the Agreement and Plan of Consolidation dated on or about June 18,2008 between First Perry Bancorp, Inc. and HNB Bancorp, Inc. shallnot constitute a Change in Control under this Section or this Agreement.

 

3.                                       In the eventthat Executive delivers a Notice of Termination (as defined in Section VI2 of this Agreement) to Bank, Executive shall be entitled to receive thecompensation and benefits set forth below:

 

Ifa “Change in Control” (as defined in Section 2(b) of this Agreement)has also occurred, Bank shall pay Executive an amount equal to 3.0****times Executive’s Annual Compensation minus applicabletaxes and withholdings, payable in twenty-four (24) equal monthly installments.  For purposes of this paragraph, AnnualCompensation shall 

 

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bedefined as Executive’s Annual Base Salary plus the highest bonus receivedwithin the previous two years plus the amount which Bank pays for employeebenefits (including automobile allowance or the value of the use of a Bankautomobile) for Executive for a one year period.  In addition, for three-years after the dateof Executive’s termination, Bank shall provide Executive with continuedparticipation in all non­cash employee benefit plans, programs or arrangements(including, without limitation, pension and retirement plans and arrangements,stock option plans, life insurance and health and accident plans andarrangements, medical insurance plans, disability plans, and vacation plans) inwhich Executive was entitled to participate immediately prior to the date oftermination of his employment provided Executive is eligible to participate insuch plans.  In the event that Executiveis not eligible to participate, then Executive shall receive an amountnecessary to reimburse Executive for the cost incurred by him to obtainsubstantially similarly benefits.

 

Inthe event the payment described herein, when added to all other amounts orbenefits provided to or on behalf of the Executive in connection with histermination of employment, would result in the imposition of an excise taxunder Section 4999 of the Code, Bank will pay to Executive an additionalcash payment (“Gross-up Payment”) in an amount such that the after-tax proceedsof such Gross-up Payment (including any income tax or Excise Tax on suchGross-up Payment) will be equal to the amount of the Excise Tax.

 

4.                                       If Executive’semployment with Bank is terminated by Bank for any reason other than Cause asdefined in Section VI 7, then Executive shall be entitled to an amountequal to 3.0****times Executive’s AnnualCompensation minus applicable taxes and withholdings payable in twenty-four(24) equal monthly installments. For purposes of this paragraph, AnnualCompensation shall be defined as Executive’s Annual Base Salary plus thehighest bonus received within the previous two years plus the amount which Bankpays for employee benefits (including automobile allowance) for Executive for aone year period.  In addition, forthree-years after the date of Executive’s termination, Bank shall provideExecutive with continued participation in all non­cash employee benefit plans,programs or arrangements (including, without limitation, pension and retirementplans and arrangements, stock option plans, life insurance and health andaccident plans and arrangements, medical insurance plans, disability plans, andvacation plans) in which Executive was entitled to participate immediatelyprior to the date of termination of his employment provided Executive iseligible to participate in such plans. In the event that Executive is not eligible to participate, thenExecutive shall receive an amount necessary to reimburse Executive for the costincurred by him to obtain substantially similarly benefits.

 

5.                                       Any terminationof Executive’s employment by the Bank or by the Executive shall be communicatedby written notice of termination to the other party by means of United Statescertified mail, return receipt requested, pursuant to Section VII 3 ofthis Agreement.  For purposes of thisAgreement, a “notice of termination” shall mean a dated notice which shall (i) indicatethe specific termination provision in the Agreement relied upon; (ii) setforth in reasonable detail the facts and circumstances claimed to 

 

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providea basis for termination of Executive’s employment under the provision soindicated; and (iii) specify a date of termination, which shall not be lessthan thirty nor more than ninety days after such notice of termination.

 

6.                                       Executive shallnot be required to mitigate the amount of any payment provided under thisAgreement by seeking employment or otherwise.

 

7.                                       Termination forCause. The Board of Directors of the Bank may terminate Executive’s employmentat any time for cause.  For purposes ofthis agreement “Cause” includes,

 

(i) the Executive’s willful failure to perform or to comply with any term orprovision of this Agreement;

 

(ii) the Executive’s willful failure to perform or to comply fully with any lawfuldirective of the Bank’s Board of Directors or of any duly constituted committeethereof after written notice and a failure to cure within thirty (30) days ofsuch notice;

 

(iii)                               Executive’sviolation of Bank’s EBO policy; or

 

(iv) Executive’s removal from office or permanently prohibited from participating inthe conduct of the Bank’s affairs by a final order issued by an appropriatefederal banking agency pursuant to Section 8(e) or 8(g) of theFederal Deposit Insurance Act or by the Comptroller of the Currency pursuant tonational law.

 

8.                                       In the eventthat Executive is terminated for “cause” as defined in Section VI 7, allobligations of Bank under this Agreement shall terminate.

 

9.                                       Notwithstandingany other provision, in the event that Executive is determined to be aspecified employee (“key employee”) as that term is defined in Section 409Aof the Code, no payment that is determined to be deferred compensation subjectto Section 409A of the Code shall be made until one day following sixmonths from the date of separation of service as that term is defined in Section 409Aof the Code.

 

VII.  MISCELLANEOUS

 

1.                                       Notwithstandingany other provision contained in this agreement, the payment or obligation topay monies or granting of any rights or privileges to Executive as provided inthis Agreement shall not be in lieu or derogation of the rights and privilegesthat Executive now has under any plan or benefit presently outstanding.

 

2.                                       This Agreementmay not be modified, changed, amended, extended, or altered except in writingsigned by the Executive or by his duly authorized representative, and by a dulyauthorized officer of the Bank.

 

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3.                                       All noticesgiven or required to be given shall be in writing, sent by United Statescertified mail, return receipt requested, postage prepaid, to Executive (or toExecutive’s spouse or estate upon Executive’s death) at Executive’s last knownaddress, and to the Bank at its principal office.  All such notices shall be effective whendeposited in the mail in the manner specified in this Section VII 3.  Either party by written notice may change ordesignate the place for receipt of all such notices.

 

4.                                       This Agreementamends and supersedes all previous employment agreements between HNB andHalifax and Executive.

 

VIII.  SUCCESSORS, ETC.

 

1.                                       This Agreementshall inure to the benefit of and be binding upon Executive, and, to the extentapplicable, his heirs, assigns, executors, and personal representatives and theBank, its successors, and assigns, including, without limitation, any person,partnership, or corporation which may acquire all or substantially all of theBank’s assets and business, or with or into which the Bank may be consolidatedor merged.  This provision shall apply inthe event of any subsequent merger, consolidation, or transfer.

 

2.                                       This Agreementis personal to each of the parties and neither party may assign or delegate anyof its rights or obligations under this Agreement without the prior writtenconsent of the other party.

 

IX.  APPLICABLE LAW

 

ThisAgreement shall be governed in all respects and be interpreted by and under thelaws of the Commonwealth of Pennsylvania, except to the extent that such lawmay be preempted by applicable federal law, in which event this Agreement shallbe governed and interpreted by and under federal law.  This Agreement shall also be interpreted asis minimally required to qualify any payment hereunder as not triggering anypenalty on the Executive or the Bank pursuant to Code Section 409A and theregulations promulgated thereunder.

 

X.  SEVERABILITY

 

Ifany provision in this Agreement is held by a court of competent jurisdiction tobe invalid, void, or unenforceable, the remaining provisions nevertheless shallcontinue in full force and effect.

 

XI.  ARBITRATION

 

Eachparty agrees that all disputes, disagreements and questions of interpretationconcerning this Agreement (except the question of Executive’s disability whichis governed in Section IV), are to be submitted for resolution, inMarysville, Pennsylvania, 

 

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tothe American Arbitration Association (the “Association”) in accordance with theAssociation’s National Rules for the Resolution of Employment Disputes orother applicable rules then in effect (“Rules”).  Bank or Executive may initiate an arbitrationproceeding at any time by giving notice to the other in accordance with theRules.  Bank and Executive may, as amatter of right, mutually agree on the appointment of a particular arbitratorfrom the Association’s pool.  Thearbitrator shall not be bound by the rules of evidence and procedure ofthe courts of the Commonwealth of Pennsylvania but shall be bound by thesubstantive law applicable to this Agreement. The decision of the arbitrator, absent fraud, duress, incompetence orgross and obvious error of fact, shall be final and binding upon the partiesand shall be enforceable in courts of proper jurisdiction.  Following written notice of a request forarbitration, Bank and Executive shall be entitled to an injunction restrainingall further proceedings in any pending or subsequently filed litigationconcerning this Agreement.

 

INWITNESS WHEREOF, the parties have duly executed this Agreement as of the dayand year first above written.

 
| Attest:                |   | Riverview  Bancorp, Inc. |
|------------------------|--------|-------------------------------|
|                   |   |                          |
| /s/  David A. Troutman |   | By:                           | /s/  David W. Hoover |
|                   |   |                          |
| Witness:               |   | Riverview  National Bank      |
|                   |   |                          |
| /s/  David A. Troutman |   | By:                           | /s/  Robert M. Garst |
|                   |   |                          |
| Witness:               |   | EXECUTIVE                     |
|                   |   |                          |
| /s/  Robert M. Garst   |   | /s/  Kirk D. Fox              |

 

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