EXHIBIT 10.1

 

AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

 

This Amendment No. 2 to Employment Agreement (the "Amendment") is made this 24th
day of August, 2018, by and among Citizens & Northern Corporation, a
Pennsylvania business corporation (the "Corporation"), Citizens & Northern Bank
(the "Bank"), a Pennsylvania chartered bank, and J. Bradley Scovill, an adult
individual ("Executive").

 

WHEREAS, the Corporation, the Bank and Executive entered into an Employment
Agreement, effective as of March 2, 2015 (the "Employment Agreement"); and

 

WHEREAS, the Corporation, the Bank and Executive entered into Amendment No. 1 to
the Employment Agreement, effective as of June 26, 2017, to extend the end date
of the Employment Period by one (1) year from March 1, 2018 until March 1, 2019;
and

 

WHEREAS, in recognition of the valued services provided by Executive to the
Corporation and the Bank, the Corporation and the Bank desire to further amend
the Employment Agreement to modify and extend the Employment Period in Section
3(a) by providing for a three (3) year evergreen term and by modifying the cash
payment amount in Sections 7 and 8 to include the value of stock based
incentives awarded to Executive, as an incentive for Executive to continue to
provide such valued services in the future.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, for good and valuable consideration, and intending to be legally
bound hereby, the Corporation, the Bank and Executive agree as follows:

 

1.       Section 3(a) of the Employment Agreement is hereby amended by deleting
the existing Section 3(a) in its entirety and adding a new Section 3(a) which
shall read in its entirety as follows:

 

3.   Term of Agreement.

 

(a)       Employment Period. This Agreement shall be for a three (3) year period
(the “Employment Period”) beginning on the date of this Amendment No. 2, and if
not previously terminated pursuant to the terms of this Agreement, the
Employment Period shall end three (3) years later; provided, however, that the
Employment Period shall be automatically renewed one year later on the first
anniversary date of the commencement of the Employment Period (the “Renewal
Date”) for a period ending three (3) years from the Renewal Date unless either
party shall give written notice of non-renewal to the other party at least
ninety (90) days prior to the Renewal Date, in which event this Agreement shall
terminate at the end of the Employment Period. If this Agreement is renewed on
the Renewal Date, it will be automatically renewed on the first anniversary date
of the Renewal Date and each subsequent year (the “Annual Renewal Date”) for a
period ending three (3) years from each Annual Renewal Date, unless either party
gives written notice of non-renewal to the other party at least ninety (90) days
prior to the Annual Renewal Date, in which case this Agreement will continue in
effect for a term ending two (2) years from the Annual Renewal Date immediately
following such notice.

 

 

 

 

2.       Section 7(a)(i) of the Employment Agreement is hereby amended by
deleting existing Section 7(a)(i) in its entirety and adding a new Section
7(a)(i) which shall read in its entirety as follows:

 

Section 7.      Rights in the Event of a Termination of Employment Pursuant to a
Change in Control.

 

(a)       Right to Compensation. In the event of a Termination Pursuant to a
Change in Control, Executive shall be entitled to receive the compensation and
benefits set forth below:

 

(i)       Executive shall be paid, within twenty (20) days following
termination, a lump sum cash payment equal to two point ninety-nine (2.99) times
the sum of (1) the highest Annual Base Salary as defined in Section 4(a) during
the immediately preceding three calendar years, (2) the highest cash bonus and
other cash incentive compensation earned by him with respect to one of the three
calendar years immediately preceding the year of termination and (3) the highest
value of stock options and other stock based incentives awarded to the Executive
with respect to one of the three calendar years immediately preceding the year
of termination, which value shall be based upon the grant-date fair value of the
award determined in accordance with SFAS 123(R) or any amendments or supplements
thereto (“Share-Based Payments”). The amount shall be subject to federal, state,
and local tax withholdings.

 

3.       Section 8(a) of the Employment Agreement is hereby amended by deleting
the existing Section 8(a) in its entirety and adding a new Section 8(a) which
shall read in its entirety as follows:

 

Section 8. Rights in Event of Termination of Employment Absent Change in
Control.

 

(a)       If Executive’s employment is involuntarily terminated by the
Corporation or the Bank without Cause or is terminated by Executive for Good
Reason pursuant to Section 3(c) (other than a Termination Pursuant to a Change
in Control), then Bank shall pay (or cause to be paid) to Executive, within
twenty (20) days following termination, a lump sum cash payment equal to one (1)
times the sum of (1) the highest Annual Base Salary as defined in Section 4(a)
during the immediately preceding three calendar years, (2) the highest cash
bonus and other cash incentive compensation earned by him with respect to one of
the three calendar years immediately preceding the year of termination and (3)
the highest value of stock options and other stock based incentives awarded to
the Executive with respect to one of the three calendar years immediately
preceding the year of termination, which value shall be based upon the
grant-date fair value of the award determined in accordance with SFAS 123(R) or
any amendments or supplements thereto (“Share-Based Payments”). The amount shall
be subject to federal, state and local tax withholdings. In addition, for a
period of one (1) year from the date of termination of employment, Executive
shall be permitted to continue participation in, and the Bank shall maintain the
same level of contribution for, Executive’s participation in the Bank’s life,
disability, medical/health insurance and other health and welfare benefits in
effect with respect to Executive during the one (1) year prior to his
termination of employment, or, if Bank cannot provide such benefits because
Executive is no longer an employee, a dollar amount equal to the cost of
Executive obtaining such benefits (or substantially similar benefits). In
addition, if permitted pursuant to the terms of the plan, Executive shall
receive additional retirement benefits to which he would have been entitled had
his employment continued through the then remaining term of the Agreement.

 

 

 

 

4.       In all other respects, the Employment Agreement, as amended above, is
hereby ratified and confirmed by the Corporation, the Bank and Executive. All
other provisions of the Employment Agreement shall remain in full force and
effect as amended hereby.

 

IN WITNESS WHEREOF, the parties, each intending to be legally bound, have
executed this Amendment as of the date, month and year first above written.

 

 

ATTEST: CITIZENS & NORTHERN CORPORATION         /s/ Kimberly N. Battin By: /s/
Leo F. Lambert      Kimberly N. Battin, Secretary      Leo F. Lambert, Chairman
        ATTEST: CITIZENS & NORTHERN BANK         /s/ Kimberly N. Battin By: /s/
Leo F. Lambert      Kimberly N. Battin, Secretary      Leo F. Lambert, Chairman
        WITNESS: EXECUTIVE         /s/ Kimberly N. Battin By: /s/ J. Bradley
Scovill      Kimberly N. Battin      J. Bradley Scovill