EXHIBIT 10.2
RESTRICTED STOCK AGREEMENT
OPTION AGREEMENT dated as of the 3rd day of January 2007, 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 Salary and Pension Committee of the Board of Directors
of the Corporation (the “Committee”) has determined that the Recipient is to be
granted, on the terms and conditions set forth herein, 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, 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 Award, a Recipient of share 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 Award     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. Each year for three (3) from the date of this
Agreement, and the Recipient’s satisfactory performance of his or her job,
one-third of the beginning Restricted Shares awarded under this Agreement shall
be released to the Recipient free of restrictions at a fair market value as
determined by the Code. No partial shares may be released, thus an amount equal
to the next whole share amount will be released 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.     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

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    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.   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.     8.   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.     9.   Governing Law. This Restricted Stock
Agreement shall be governed by and construed according to the laws of the State
of Pennsylvania.     10.   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.     11.   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           Craig G. Litchfield, 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         

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