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CITIZENS & NORTHERN CORPORATION
1995 STOCK INCENTIVE PLAN (As Amended)
 
RESTRICTED STOCK AGREEMENT

RESTRICTED STOCK AGREEMENT dated as of the 4th day of January, 2011, by and
between Citizens & Northern Corporation (the "Corporation") and «name», 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, «Restricted_Shares» Restricted Shares of the
Corporation's common stock and hereby grants such Restricted Shares. It is
intended that the Restricted Shares qualify as an "Incentive Stock Option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").

 
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 free
thereof with such legend shall be issued to the Recipient.

 
4.
Release and Lapse of Restricted Shares.  One-third of the total shares will be
distributed on the anniversary date of this award based on the Recipient’s
satisfactory performance of his or her job and the Corporation’s attainment of
an earnings-based performance standard. For the first year of this award, the
performance standard will be based on achieving 100% or more of the Return on
Equity of a defined peer group of bank holding companies, herein defined
(adjusting for the difference between the Corporation’s and the peer group’s
equity to asset ratios), for the four consecutive calendar quarters ending with
the third quarter of each calendar year following the Award Date, until all
Restricted Shares awarded herewith are distributed.  If all the Restricted
Shares awarded by this agreement are not distributed within the ten (10) year
period following the date of this Agreement, they shall expire and revert back
to the Corporation.   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 of holding companies to be used for
this award is as follows:

 
 
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Bank Holding Company
 
Citizens & Northern Corporation
First Keystone Corporation
ACNB Corporation
First National Community Bancorp Inc.
American Bank Incorporated
Franklin Financial Services Corporation
AmeriServ Financial, Inc.
IBT Bancorp, Inc.
Bryn Mawr Bank Corporation
Leesport Financial Corp
CNB Financial Corporation
Orrstown Financial Services, Inc.
Chemung Financial Corporation
Penns Woods Bancorp, Inc.
Citizens Financial Services, Inc.
Penseco Financial Services Corporation
Comm Bancorp, Inc.
QNB Corp
Fidelity D & D Bancorp, Inc.
Republic First Bancorp, Inc.
First Chester County Corporation
Royal Bancshares of Pennsylvania, Inc.

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.

 
 
 

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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 Option Agreement may be amended or modified at any time by an
instrument in writing signed by the parties hereto, provided that no such
amendment or modification shall be made which would cause the Restricted Stock
to fail to continue to qualify as "incentive restricted stock."

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

By
   
Charles H. Updegraff, Jr., Chairman, 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.
   
Recipient – «name»

 
 
 

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