Document:

ex_122911.htm

Exhibit 10.3

 

	
			

				
			August 24, 2018

			 

			Rodney Clemente

			1717 Doolittle Drive

			San Leandro, CA 94577

			 

			Re:     Executive Employment Agreement

			 

			Dear Rodney:

			 

			On behalf of Energy Recovery Inc. (“ERI”) or (“Company”), I am pleased to offer you additional protection in the event you are terminated for convenience (as defined below) as part of your continued executive employment with ERI, subject to the following terms and conditions.

			 

			Employment Status. Your employment with the Company remains “at will,” meaning that either you or the Company will be entitled to terminate your employment at any time and for any reason, with or without cause or prior notice. Any contrary representations which may have been made to you are superseded by this letter. In addition, although your job duties, title, compensation, benefits, as well as the Company’s personnel policies and procedures, may change in the future in the Company’s discretion, the “at will” nature of your employment may not be changed except by written agreement signed by you and the Chief Executive Officer or Chairman of the Board.

			 

			Termination for Convenience. Notwithstanding your at will employment, in the event that you are terminated without Cause as defined in the Company’s Change in Control Severance Plan, as amended (the “CIC Plan”), you will be entitled to all payments required by applicable law, including all earned and unpaid salary, all earned but unpaid and un-deferred bonus attributable to the year that ends immediately before the year in which the termination occurs, and other benefits under applicable benefit plans to which you were entitled upon such termination of employment in accordance with the terms of such benefit plans.

			 

			You shall also be entitled to receive the greater (in terms of total value) of any severance benefits provided in any then-existing and applicable Company severance plan (including the CIC Plan) in accordance with the terms of such plans, or the following additional benefits (“Additional Benefits”):

			 

			(A)  a severance amount equal to six (6) months’ salary based on your annual base salary in effect as of the date of the employment termination. For the sake of clarity, it is the intent of the parties herein that, in the event of a Termination for Convenience (as defined herein), you will receive no less than the amount of severance in this Paragraph (A).

			 

			 

			 

			 

			 

			 

			1717 Doolittle Drive                                       T +1 510.483.7370

			San Leandro                                                                    F +1 510.483.7371

			California 94577                                                            info@energyrecovery.com

			United States                                                                  energyrecovery.com

			

 

 

 

 

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			Notwithstanding anything else herein, Paragraph (A) above will not apply and, thus, the Additional Benefits will not become due and payable, unless you first execute a general release in a form reasonably satisfactory to the Company that provides, among other terms, a release and waiver of all known and unknown claims that you may then have against the Company or persons or companies affiliated with the Company. Such release must be signed and returned within the time set by Company, or as required by applicable law, and remain unrevoked for any revocation period required by applicable law.

			 

			Compliance This Agreement is intended to be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder (“Section 409A”) to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4) or otherwise. To the extent Section 409A is applicable to this Agreement, it is intended that this Agreement comply with the deferral, payout and other limitations, restrictions and requirements imposed under Section 409A. Notwithstanding any other provision of this Agreement to the contrary, this Agreement will be interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary, with respect to any payments under this Agreement to which Section 409A applies, all references in this Agreement to the termination of the Employee’s employment or service are intended to mean the Employee’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i). In addition, if the Employee is a “specified employee,” within the meaning of Section 409A, then to the extent necessary to avoid subjecting the Employee to the imposition of any additional tax under Section 409A, amounts that would otherwise be payable under this Agreement during the six-month period immediately following the Employee’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i), shall not be paid to the Employee during such period, but will instead be accumulated and paid to the Employee (or, in the event of the Employee’s death, the Employee’s estate) in a lump sum on the first business day after the earlier of (i) the date that is six months following the Employee’s separation from service or (ii) the Employee’s death.

			 

			Withholdings The Company may deduct from any payment or, if requested by the Company, the Employee must pay to the Company, all taxes and other withholdings required to be withheld by federal, state or local governments in connection with any payments made under than this Agreement, no later than the date on which such withholding is required under applicable law.

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			1717 Doolittle Drive                                       T +1 510.483.7370

			San Leandro                                                                    F +1 510.483.7371

			California 94577                                                            info@energyrecovery.com

			United States                                                                  energyrecovery.com

			

 

 

 

 

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			Please accept this agreement by signing your name below. Then return this letter to me by email or fax by August 31, 2018. If your acceptance is not received by this date, we shall assume that you have declined the terms of this agreement and the offer shall be null and void.

			 

			 

			/s/ Chris Gannon

			 

			Chris Gannon

			President and Chief Executive Officer

			 

			 

			Signed Acceptance: /s/ Rodney Clemente

			 

			Date: August 24, 2018

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			 

			1717 Doolittle Drive                                       T +1 510.483.7370

			San Leandro                                                                    F +1 510.483.7371

			California 94577                                                            info@energyrecovery.com

			United States                                                                  energyrecovery.comEXHIBIT 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

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