SEC Contract Filing

Filing Date: 2023-03-16

Document Content:
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>cznc-20221231xex10d5.htm
<DESCRIPTION>EX-10.5
<TEXT>
<!--Enhanced HTML document created with Toppan Merrill Bridge 9.14.0.96--><!--Created on: 3/15/2023 10:52:21 PM (UTC)--><!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"><html><head><meta charset="UTF-8"><title></title></head><body><div style="margin-top:30pt;"></div><div style="max-width:100%;padding-left:5.88%;padding-right:8.24%;position:relative;"><div style="clear:both;max-width:100%;position:relative;"><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.28;text-align:right;margin:0pt 9.35pt 13.1pt 0pt;"><b style="font-family:'Times New Roman','Times','serif';font-size:12pt;font-weight:bold;">EXHIBIT 10.5</b></p><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.28;text-align:center;margin:0pt 9.35pt 13.1pt 0pt;"><img src="cznc-20221231xex10d5001.jpg" alt="Graphic" style="display:inline-block;height:47.95pt;left:0%;padding-bottom:0.05pt;position:relative;top:0pt;width:410.9pt;"></p><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.28;text-align:center;margin:0pt 0pt 30pt 1.45pt;"><u style="font-family:'Times New Roman','Times','serif';font-size:14pt;font-style:italic;font-weight:bold;text-decoration-color:#000000;text-decoration-line:underline;text-decoration-style:solid;">2023 Annual Performance Incentive Award Plan &#8212; Mortgage Lenders</u></p><p style="font-family:'Times New Roman','Times','serif';font-size:14pt;line-height:1.28;margin:0pt 0pt 0pt 0.25pt;"><i style="font-style:italic;text-decoration-color:#000000;text-decoration-line:underline;text-decoration-style:solid;">Section l:</i> Purpose of the Plan</p><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.28;margin:0pt;"><font style="margin-bottom:8pt;visibility:hidden;">&#8203;</font></p><p style="font-family:'Times New Roman','Times','serif';font-size:12pt;line-height:1.28;text-indent:17.75pt;margin:0pt 0pt 0pt 0.25pt;">The purpose of the Performance Incentive Award Plan (&quot;the Plan&quot;) is to provide variable compensation to Citizens &amp; Northern employees who are actively engaged in interviewing residential real estate applicants, processing the applications and closing the loans. The Plan is designed to reward mortgage lending employees who attain and sustain consistently high levels of performance by meeting and exceeding defined goals and to provide a component of the compensation package essential to retaining and attracting quality employees in mortgage lending positions. Incentive awards are not directly tied to Company/mortgage business profits nor the terms of the closed-end mortgage transaction or a proxy for a transaction term. The expense of the plan is incorporated into the Company&#39;s operating budget. The objective is to align the interests of these employees with the interests of the Company in obtaining superior performance results while being in compliance with the SAFE Act and 12 CFR Part 1026.36 (Regulation Z).</p><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.28;margin:0pt;"><font style="margin-bottom:8pt;visibility:hidden;">&#8203;</font></p><p style="font-family:'Times New Roman','Times','serif';font-size:15pt;line-height:1.28;margin:0pt 0pt 3.09pt 0.25pt;"><i style="font-style:italic;text-decoration-color:#000000;text-decoration-line:underline;text-decoration-style:solid;">Section 2</i>: General Description</p><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.28;margin:0pt;"><font style="margin-bottom:8pt;visibility:hidden;">&#8203;</font></p><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.22;text-indent:17pt;margin:0pt 10.8pt 12.85pt 0pt;"><font style="font-family:'Times New Roman','Times','serif';font-size:12pt;">There are two components of the Plan: (l) </font><b style="font-family:'Times New Roman','Times','serif';font-size:12pt;font-weight:bold;">unit/functional performance</b><font style="font-family:'Times New Roman','Times','serif';font-size:12pt;">; and (2) </font><b style="font-family:'Times New Roman','Times','serif';font-size:12pt;font-weight:bold;">individual performance</b><font style="font-family:'Times New Roman','Times','serif';font-size:12pt;">. The </font><b style="font-family:'Times New Roman','Times','serif';font-size:12pt;font-weight:bold;">individual performance</b><font style="font-family:'Times New Roman','Times','serif';font-size:12pt;"> component will be subject to an evaluation of the participants&#39; overall contributions to the &quot;team&quot;. To earn the individual component, the participant must attain at least the threshold performance level. </font><b style="font-family:'Times New Roman','Times','serif';font-size:12pt;font-weight:bold;">The unit/functional component</b><font style="font-family:'Times New Roman','Times','serif';font-size:12pt;"> is based on the attainment of pre-established goals by the applicable branch or mortgage lending business unit. To receive the </font><b style="font-family:'Times New Roman','Times','serif';font-size:12pt;font-weight:bold;">unit/functional bonus</b><font style="font-family:'Times New Roman','Times','serif';font-size:12pt;"> payout, the participant must achieve at least the threshold level.</font></p><p style="font-family:'Calibri','Helvetica','sans-serif';font-size:11pt;line-height:1.22;text-indent:17pt;margin:0pt 10.8pt 12.85pt 0pt;"><font style="font-family:'Times New Roman','Times','serif';font-size:12pt;">In addition to goals based on production, the Plan requires management to consider non-financial goals designed to improve operational and risk management effectiveness, as appropriate for each participant&#39;s position. The Plan permits future inclusion of additional positions during a Plan year, if the n