Exhibit 10.4


 





 


CITIZENS & NORTHERN CORPORATION


1995 STOCK INCENTIVE PLAN (As Amended)


 


RESTRICTED STOCK AGREEMENT –
EXECUTIVE OFFICER


 


RESTRICTED STOCK AGREEMENT dated as of the 2nd day of February,
2016, by and between Citizens & Northern Corporation (the "Corporation") and J. Bradley Scovill, an employee of the
Corporation or of a subsidiary (the "Recipient").


 


Pursuant to the Citizens & Northern Corporation 1995 Stock
Incentive Plan (the "Plan"), as amended, the Compensation Committee of the Board of Directors (the "Committee")
has determined that the Recipient is to be granted, on the terms and conditions set forth herein, 177 Restricted Shares
of the Corporation's common stock and hereby grants such Restricted Shares.


 


		1.	Number of Shares and Price. Restricted Stock shall consist of shares of Stock that will be acquired by and issued to
the Recipient at a designated time approved by the board of directors, for no purchase price, and under and subject to such transfer,
forfeiture and other restrictions, conditions or terms as shall be determined by the Committee, including but not limited to prohibitions
against transfer and substantial risks of forfeiture within the meaning of Section 83 of the Code.



 


		2.	Rights of Recipient. Except as otherwise provided in the Plan or the Restricted Stock Agreement, a Recipient of shares
of Restricted Stock shall have all the rights as does a holder of Stock, including without limitation the right to vote such shares
and receive dividends with respect thereto; however, during the time period of any restrictions, conditions or terms applicable
to such Restricted Stock, the shares thereof and the right to vote the same and receive dividends thereon shall not be sold, assigned,
transferred, exchanged, pledged, hypothecated, encumbered or otherwise disposed of except as permitted by the Plan or the Restricted
Stock Agreement. Cash dividends shall be paid out and shall not participate in Dividend Reinvestment. Stock dividends resulting
in whole shares shall be added to the shares held in the Restricted Account and shall be distributed to the Recipient with subsequent
distributions of any Award for which they accrued. Partial shares that result from any stock dividend shall be paid to the Recipient
in cash at the time of the payment of the stock dividend. If the Restricted Shares expire prior to the satisfaction of performance
standards set forth in section 4 or due to forfeiture as set forth in section 5, all shares accrued by virtue of stock dividends
shall be forfeited.



 


		3.	Holding of Restricted Shares.  Each certificate for shares of Restricted Stock shall be deposited with the Secretary
of the Corporation, or the office thereof, and shall bear a legend in substantially the following form and content:



 


This Certificate and the shares of Stock hereby
represented are subject to the provisions of the Corporation’s Stock Incentive Plan and a certain agreement entered into
between the owner and the Corporation pursuant to said Plan. The release of the Certificate and the shares of Stock hereby represented
from such provision shall occur only as provided by said Plan and Agreement, a copy of which are on file in the office of the Secretary
of the Corporation.


 


Upon the lapse or satisfaction of the restrictions,
conditions and terms applicable to such Restricted Stock, a certificate for the shares of Stock without such legend shall be issued
to the Recipient.


 


		4.	Release and Lapse of Restricted Shares. The release of restrictions or expiration of restricted shares awarded under
this agreement shall occur over a period of three years. On each anniversary date of this award, one-sixth of the total
shares will be distributed based on the Recipient’s satisfactory performance of his or her job. Additionally, on each anniversary
date of this award, one-sixth of the total shares will be distributed based on the Recipient’s satisfactory performance of
his or her job and the Corporation’s attainment of an earnings-based performance standard. The performance
standard will be based on the Corporation achieving Return on Average Equity (ROAE) with a percent ranking of at least 50% of the
ROAE achieved by a defined peer group of bank holding companies, herein defined, for the four consecutive calendar quarters ending
with the third quarter of each calendar year following the Award Date. All Restricted Shares not distributed due to the Recipient’s
unsatisfactory performance of his or her job or due to the Corporation failing to achieve an ROAE with a percent ranking of at
least 50% of that of the defined peer group shall expire and revert back to the Corporation as of the anniversary date on which
such determinations are made. No partial shares may be released, thus an amount equal to the next whole share amount will be released
subject to the specified performance criteria at each anniversary. The shares released may be in certificate form, or may be directed
to be held in a custodial account designated by the Recipient. The peer group consists of all publicly traded Commercial Banks
and Thrifts headquartered in New Jersey, New York, Ohio and Pennsylvania with total assets of $750 million to $3.5 billion as of
the end of the four consecutive calendar quarters ending with the third quarter of each calendar year following the Award Date.



 




     


     

    

 


The Committee reserves the right to change the composition
of the peer group, as well as the method of evaluating the Corporation’s earnings performance as compared to the peer group,
based on mergers or acquisitions involving members of the peer group, changes in size of the Corporation or members of the peer
group, or other factors deemed appropriate by the Committee.


 


		5.	Terms of Forfeiture. If a Recipient’s employment with the Corporation, or a subsidiary, ceases for any reason
prior to the lapse of the restrictions, conditions or terms applicable to his or her Restricted Stock, all of the Recipient’s
Restricted Stock still subject to unexpired restrictions, conditions or terms shall be forfeited absolutely by the Recipient to
the Corporation without payment or delivery of any consideration or other thing of value by the Corporation or its affiliates,
and thereupon and thereafter neither the Recipient nor his or her heirs, personal or legal representatives, successors, assigns,
beneficiaries, or any claimants under the Recipient’s Last Will or laws of descent and distribution, shall have any rights
or claims to or interests in the forfeited Restricted Stock or any certificates representing shares thereof, or claims against
the Corporation or its affiliates with respect thereto. Except in the case of disability, employment ceases with the Corporation,
or its Subsidiary, on the day the Recipient’s employment is terminated with or without cause, or on their date of death.
In the event of disability, the Recipient’s employment is considered terminated on the date for which the Recipient receives
the final payment of the Corporation’s, or Subsidiary’s, short-term disability.



 


		6.	Non-Transferability of Restricted Stock. The Restricted Stock and this Restricted Stock Agreement shall not
be transferable.



 


		7.	Change in Control. If any of the change in control events described in Section 11 of the Plan occur, all shares of Restricted
Stock shall fully vest and all restrictions on the shares of Restricted Stock shall lapse as follows: In the case of an event specified
in clause (a) of the second sentence of the third paragraph of Section 11, the lapse of all restrictions on the shares of Restricted
Stock shall occur immediately prior to the consummation of the described transaction and, in the case of an event specified in
clause (b) or (c) of said sentence, the full vesting and lapse of restrictions shall occur upon occurrence of the described event.



 


		8.	Notices. Any notice required or permitted under this Restricted Stock Agreement shall be deemed given when delivered
personally, or when deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Recipient either
at his or her address herein above set forth or such other address as he or she may designate in writing to the Corporation.



 


		9.	Failure to Enforce Not a Waiver. The failure of the Corporation to enforce at any time any provision of this Restricted
Stock Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.



 


		10.	Governing Law. This Restricted Stock Agreement shall be governed by and construed according to the laws of the State
of Pennsylvania.



 


		11.	Incorporation of Plan. The Plan is hereby incorporated by reference and made a part hereof, and the Restricted Stock
and this Restricted Stock Agreement are subject to all terms and conditions of the Plan.



 


		12.	Amendments. This Restricted Stock Agreement may be amended or modified at any time by an instrument in writing signed
by the parties hereto.



 


IN WITNESS WHEREOF, the parties have executed this Restricted
Stock Agreement on the day and year first above written.


 


	 	By	 
	 	 	/s/ J. Bradley Scovill
	 	 	J. Bradley Scovill - President & CEO
	 	 	 
	 	The undersigned hereby accepts and agrees to all the terms and provisions of the foregoing Restricted Stock Agreement and to all the terms and provisions of the Citizens & Northern Corporation 1995 Stock Incentive Plan herein incorporated by reference.
	 	 	 
	 	 	/s/ J. Bradley Scovill
	 	 	Recipient – J. Bradley Scovill