GRANGE NATIONAL BANK
                              AMENDED AND RESTATED
            SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT


         This Agreement is entered into this January 17, 2003, by and between
GRANGE NATIONAL BANK, a nationally-chartered commercial bank located in
Laceyville, Pennsylvania (the "Company"), and THOMAS A. MCCULLOUGH (the
"Executive").

         On January 1, 1996, the Company and the Executive entered into an
Executive Supplemental Income Agreement (the "Prior Agreement"). Pursuant to its
powers to amend the Prior Agreement, the Company hereby amends and restates the
Prior Agreement in its entirety.

         The purpose of this Agreement is to provide specified benefits to the
Executive, a member of a select group of management or highly compensated
employees who contribute materially to the continued growth, development and
future business success of the Company. This Agreement shall be unfunded for tax
purposes and for purposes of Title I of ERISA.


                                             ARTICLE 1
                                            DEFINITIONS

         The following words and phrases shall have the following meanings,
unless the context requires otherwise:

1.1      "ACCRUAL BALANCE" means the liability accrued on the books of the
         Company for the Company's obligation for the Normal Retirement Benefit,
         using generally accepted accounting principles.

1.2      "BENEFICIARY" means each designated person, or the estate of the
         Executive, entitled to benefits, if any, upon the death of the
         Executive determined pursuant to Article 3.

1.3      "BENEFICIARY DESIGNATION FORM" means the form established from time to
         time by the Plan Administrator that the Executive completes, signs and
         returns to the Plan Administrator to designate one or more
         Beneficiaries.

1.4      "BOARD"  means the Board of  Directors  of the  Company as from time to
         time constituted.

1.5      "CHANGE OF CONTROL" means

         (a) A change in the ownership of the capital stock of the Company or
         the Corporation, whereby another corporation, person, or group acting
         in concert



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         (hereinafter this Agreement shall collectively refer to any combination
         of these three [another corporation, person, or group acting in
         concert] as a "Person") as described in Section 14(d)(2) of the
         Securities Exchange Act of 1934, as amended (the "Exchange Act"),
         acquires, directly or indirectly, beneficial ownership (within the
         meaning of Rule 13d-3 promulgated under the Exchange Act) of a number
         of shares of capital stock of the Company or the Corporation which
         constitutes fifty percent (50%) or more of the combined voting power of
         the Company's or the Corporation's then outstanding capital stock then
         entitled to vote generally in the election of directors; or

         (b) The persons who were members of the Board of Directors of the
         Company or the Corporation's immediately prior to a tender offer,
         exchange offer, contested election or any combination of the foregoing,
         cease to constitute a majority of the Board of Directors; or

         (c) The adoption by the Board of Directors of the Company or the
         Corporation of a merger, consolidation or reorganization plan involving
         the Company or the Corporation in which the Company or the Corporation
         is not the surviving entity, or a sale of all or substantially all of
         the assets of the Company or the Corporation. For purposes of this
         Agreement, a sale of all or substantially all of the assets of the
         Company or the Corporation shall be deemed to occur if any Person
         acquires (or during the 12-month period ending on the date of the most
         recent acquisition by such Person, has acquired) gross assets of the
         Company or the Corporation that have an aggregate fair market value
         equal to fifty percent (50%) or more of the fair market value of all of
         the respective gross assets of the Company or the Corporation
         immediately prior to such acquisition or acquisitions; or

         (d) A tender offer or exchange offer is made by any Person which
         results in such Person beneficially owning (within the meaning of Rule
         13d-3 promulgated under the Exchange Act) either fifty percent (50%) or
         more of the Company's or the Corporation's outstanding shares of Common
         Stock or shares of capital stock having fifty percent (50%) or more the
         combined voting power of the Company's or the Corporation's then
         outstanding capital stock (other than an offer made by the Company or
         the Corporation), and sufficient shares are acquired under the offer to
         cause such person to own fifty percent (50%) or more of the voting
         power; or

         (e) Any other transactions or series of related transactions occurring
         which have substantially the same effect as the transactions specified
         in any of the preceding clauses of this Section 1.5.

         Notwithstanding the above, certain transfers are permitted within
         Section 318 of the Code and such transfers shall not be deemed a Change
         of Control under this Section 1.5.

1.6      "CODE" means the Internal Revenue Code of 1986, as amended.



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1.7      "COMPENSATION" means the annual compensation, including bonuses,
         commissions, overtime, relocation expenses, incentive payments,
         non-monetary awards, and including automobile allowances paid to the
         Executive for employment services rendered to the Company, before
         reduction for compensation deferred pursuant to all qualified,
         non-qualified and Code ss. 125 plans of the Company.

1.8      "CORPORATION" means Grange National Banc Corp., a Pennsylvania
         corporation.

1.9      "DISABILITY" means a condition whereby the Executive, because of a
         physical or mental sickness, accident or injury, is or will be unable
         to perform the duties of the Executive's customary position of
         employment with the Company or any other employer. The Board, in its
         sole discretion, shall determine whether the Executive is disabled and
         may require the Executive to submit to a physical examination in order
         to determine disability.

1.10     "DISABILITY BENEFIT" means the benefit as set forth in Section 2.4.

1.12     "EARLY RETIREMENT BENEFIT" means the benefit as set forth in Section
         2.3.

1.13     "EFFECTIVE DATE"  means 1/1/96.

1.14     "FINAL COMPENSATION" means the average of the Executive's Compensation
         for his or last five calendar years of employment (including the
         annualized compensation for the calendar year in which the event that
         entitled the Executive to a distribution of benefits under this
         Agreement occurred).

1.15     "NORMAL RETIREMENT AGE" means the Executive's sixty-second (62ND)
         birthday.

1.16     "NORMAL RETIREMENT BENEFIT" means the benefit as set forth in Section
         2.2.

1.17     "NORMAL RETIREMENT DATE" means the later of the Normal Retirement Age
         or Termination of Employment.

1.18     "PENSION BENEFIT" means the balance in the Executive's 401 (k) (as of
         the date any benefits are being determined) attributed to all Company
         contributions, plus the return on those contributions, amortized over a
         two hundred forty (240) month period with interest calculated on the
         unpaid balance at an annual rate of eight percent (8%), compounded
         monthly.

1.19     "PLAN ADMINISTRATOR" means the plan administrator described in Article
         5.

1.20     "PLAN YEAR" means the twelve (12) month period from January 1 to
         December 31.

1.21     "TERMINATION FOR CAUSE" means termination of the Executive's employment
         for: (a) gross negligence or gross neglect of duties; (b) commission of
         a felony or of a gross misdemeanor involving moral turpitude; or (c)
         actions inimical to the



<PAGE>


         interests of the Company, including but not limited to fraud,
         disloyalty, dishonesty or willful violation of any law or significant
         Company policy committed in connection with the Executive's employment
         and resulting in a material adverse effect on the Company.

 1.22    "TERMINATION OF EMPLOYMENT" means the date on which the Executive (i)
         retires, resigns or ceases to be an employee; (ii) dies while in the
         active employ of the Company; or (iii) departs from the service of the
         Company for any reason; provided, that the Executive will not be deemed
         to have terminated the Executive's employment solely by reason of a
         leave of absence duly approved by the Company.

 1.23    "YEARS OF SERVICE" means the twelve consecutive month period beginning
         on the Executive's date of hire and any twelve (12) month anniversary
         thereof, during the entirety of which time the Executive is an employee
         of the Company. The Plan Administrator in its discretion may also grant
         additional Years of Service in such circumstances where it deems such
         additional service appropriate.


                                    ARTICLE 2
                          RETIREMENT AND DEATH BENEFITS

2.1      AGREEMENT BENEFITS. The Executive's benefits under this Agreement shall
         be limited to those described in this Article 2, and shall be subject
         to any conditions and limitations set forth in Article 4 and contained
         elsewhere in this Agreement.
2.2      NORMAL RETIREMENT BENEFIT. Upon the Normal Retirement Date, the Company
         shall pay to the Executive an annual Normal Retirement Benefit equal to
         eighty- five percent (85%) of the Executive's Final Compensation
         reduced by the (a) Pension Benefit, and (b) fifty percent (50%) of the
         Social Security benefit that would be receivable by the Executive
         calculated as if the Executive's Normal Retirement Age were also his
         normal retirement age or age at which unreduced Social Security
         benefits were available under the Social Security law (regardless of
         whether any Social Security benefits are actually payable currently on
         the Executive's Normal Retirement Date). The Company shall pay the
         Normal Retirement Benefit to the Executive in twelve (12) equal monthly
         installments commencing as of the first day of the month following the
         Executive's Normal Retirement Date and payable during the Executive's
         lifetime on or around the first day of each successive month thereafter
         until the Executive has received one hundred eighty (180) installments.
         Upon making all of such installments, the Company's obligation to
         provide such payments will cease. No further benefit under this
         Agreement is to be provided.
2.3      EARLY RETIREMENT BENEFIT. Upon the Executive's Termination of
         Employment before the Normal Retirement Date, the Company shall pay to
         the Executive an annual Early Retirement Benefit, determined by
         amortizing the Accrual Balance over one hundred eighty (180) equal
         monthly installments at an annual rate of



<PAGE>


         interest equal to the Prime Rate as published in the WALL STREET
         JOURNAL. on the last business day immediately preceding the Executive's
         Termination of Employment. The Company shall pay the Early Retirement
         Benefit to the Executive commencing as of the first day of the month
         following the Executive's Termination of Employment and payable during
         the Executive's lifetime on or around the first day of each successive
         month thereafter until the Executive has received one hundred eighty
         (180) installments. Upon making all of such installments, the Company's
         obligation to provide such payments will cease. No further benefit
         under this Agreement is to be provided.
2.4      DISABILITY BENEFIT. Upon Termination of Employment due to Disability
         prior to Normal Retirement Age, the Company shall pay to the Executive
         an annual Disability Benefit, determined by amortizing the Accrual
         Balance over one hundred eighty (180) equal monthly installments at an
         annual rate of interest equal to the Prime Rate as published in THE
         WALL STREET JOURNAL on the last business day immediately preceding the
         Executive's Termination of Employment. The Company shall pay the
         Disability Benefit to the Executive commencing as of the first day of
         the month. following the Executive's Termination of Employment and
         payable during the Executive's lifetime on or around the first day of
         each successive month thereafter until the Executive has received one
         hundred eighty (180) installments. Upon making all of such
         installments, the Company's obligation to provide such payments will
         cease. No further benefit under this Agreement is to be provided.
2.5      CHANGE OF CONTROL BENEFIT. Following a Change of Control, upon the
         Executive's Termination of Employment for reasons other than death,
         Disability or attaining Normal Retirement Age, the Company shall pay to
         the Executive an annual Change of Control Benefit equal to eighty-five
         percent (85%) of the Executive's Final Compensation reduced by the (a)
         Pension Benefit, and (b) fifty percent (50%) of the Social Security
         benefit that would be receivable by the Executive calculated as if the
         Executive's age at Termination of Employment were also his normal
         retirement age or age at which unreduced Social Security benefits were
         available under the Social Security law (regardless of whether any
         Social Security benefits are actually payable currently on the
         Executive's Normal Retirement Date). The Company shall pay the Change
         of Control Benefit to the Executive in twelve (12) equal monthly
         installments commencing as of the first day of the month following the
         Executive's Termination of Employment and payable during the
         Executive's lifetime on or around the first day of each successive
         month thereafter until the Executive has received one hundred eighty
         (180) installments. Upon making all of such installments, the Company's
         obligation to provide such payments will cease. No further benefit
         under this Agreement is to be provided.
 2.6     PRE-RETIREMENT DEATH BENEFIT . If the Executive dies while in the
         active employ by the Company, the Company shall pay to the Beneficiary
         the following benefits:

                                             Year 1:100% of Compensation



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                                Years 2-5:       75% of Compensation
                                Years 6-15:      50% of Compensation

         The Company shall pay the Pre-Retirement Death Benefit to the
         Beneficiary in twelve (12) monthly installments commencing as of the
         first day of the month following the Executive's death and on or around
         the first day of each successive month thereafter until the Executive's
         beneficiary has received one hundred eighty (180) installments. Upon
         making all of such installments, the Company's obligation to provide
         such payments will cease. No further benefit under this Agreement is to
         be provided.
 2.7     POST-COMMENCEMENT DEATH BENEFIT. If the Executive dies after any
         benefit payments have commenced under this Article but before receiving
         all such payments, the Company shall pay to the Beneficiary the
         remaining benefits at the same time, for such duration and in the same
         amounts they would have been paid to the Executive had the Executive
         survived.
 2.8     POST-RETIREMENT, COMMENCEMENT DEATH BENEFIT. If the Executive is
         entitled to a benefit under this Article, but dies prior to the
         commencement of said benefit payments, the Company shall pay the same
         benefit payments to the Beneficiary that the Executive was entitled to
         prior to death except that the benefit payments shall commence on the
         first day of the month following the date of the Executive's death.
2.9      WITHHOLDING AND PAYROLL TAXES. The Company shall withhold from any and
         all benefits made under this Article 2, all federal, state and local
         income taxes, employment and other taxes required to be withheld by the
         Company in connection with the benefits hereunder, in amounts to be
         determined in the sole discretion of the Company.

                                    ARTICLE 3
                                  BENEFICIARIES

3.1      BENEFICIARY. The Executive shall have the right, at any time, to
         designate a Beneficiary(ies) to receive any benefits payable under this
         Agreement to a beneficiary upon the death of the Executive. The
         Beneficiary designated under this Agreement may be the same as or
         different from the Beneficiary designation under any other plan of the
         Company in which the Executive participates.
3.2      BENEFICIARY DESIGNATION; CHANGE. The Executive shall designate a
         Beneficiary by completing and signing the Beneficiary Designation Form,
         and delivering it to the Plan Administrator or its designated agent.
         The Executive's beneficiary designation shall be deemed automatically
         revoked if the beneficiary predeceases the Executive or if the
         Executive names a spouse as beneficiary and the marriage is
         subsequently dissolved. The Executive shall have the right to change a
         Beneficiary by completing, signing and otherwise complying with the
         terms of the



<PAGE>


         Beneficiary Designation Form and the Plan Administrator's rules and
         procedures, as in effect from time to time. Upon the acceptance by the
         Plan Administrator of a new Beneficiary Designation Form, all
         Beneficiary designations previously filed shall be cancelled. The Plan
         Administrator shall be entitled to rely on the last Beneficiary
         Designation Form flied by the Executive and accepted by the Plan
         Administrator prior to the Executive's death.
 3.3     ACKNOWLEDGMENT. No designation or change in designation of a
         Beneficiary shall be effective until received, accepted and
         acknowledged in writing by the Plan Administrator or its designated
         agent.
3.4      NO BENEFICIARY DESIGNATION. If the Executive dies without a valid
         beneficiary designation, or if all designated Beneficiaries predecease
         the Executive, then the Executive's spouse shall be the designated
         Beneficiary. If the Executive has no surviving spouse, the benefits
         shall be made to the personal representative of the Executive's estate.
3.5      FACILITY OF PAYMENT. If the Plan Administrator determines in its
         discretion that a benefit is to be paid to a minor, to a person
         declared incompetent, or to a person incapable of handling the
         disposition of that person's property, the Plan Administrator may
         direct payment of such benefit to the guardian, legal representative or
         person having the care or custody of such minor, incompetent person or
         incapable person. The Plan Administrator may require proof of
         incompetence, minority or guardianship as it may deem appropriate prior
         to distribution of the benefit. Any payment of a benefit shall be a
         payment for the account of the Executive and the Executive's
         Beneficiary, as the case may be, and shall be a complete discharge of
         any liability under the Agreement for such payment amount.

                                    ARTICLE 4
                         GENERAL LIMITATIONS ON BENEFITS

4.1      TERMINATION FOR CAUSE. If there is a Termination for Cause by the
         Company of the Executive, the-Executive shall cease participation
         hereunder as of the date of such termination and no benefits shall be
         paid to the Executive or the Executive's Beneficiary.
4.2      REQUIREMENT OF NON-COMPETITION. The Company shall not pay to the
         Executive any benefit under this Agreement if, during the term that
         benefits payments are being made, the Executive, without the prior
         written consent of the Board engages in, becomes interested in,
         directly or indirectly, as a sole proprietor, as a partner in a
         partnership, or as a substantial shareholder in a corporation, or
         becomes associated with, in the capacity of employee, director,
         officer, principal, agent, trustee or in any other capacity whatsoever,
         any enterprise conducted within twenty-five (25) miles of any office of
         the Company existing as of the date of the Executive's Termination of
         Employment, which


<PAGE>


         enterprise is, or may deemed to be, competitive with any business
         carried on by the Company as of the date of the Executive's Termination
         of Employment. This section shall not apply following a Change of
         Control.
4.3      SERVICES. Payment of the Early Retirement Benefit or Normal Retirement
         Benefit is conditioned upon the Executive, while receiving payments
         under this Agreement, rendering such reasonable business consulting and
         advisory services to the Company as requested by the Board. Such
         services shall not require the Executive to be active in the Company's
         day-to-day activities, and the Executive shall be compensated for such
         services in an amount to be then agreed upon, and shall be reimbursed
         for all expenses incurred in performing such services.
 4.4     EXECUTIVE'S SUICIDE OR MISSTATEMENT. The Company shall not pay any
         benefit under this Agreement if the Executive commits suicide within
         two years of the Effective Date of this Agreement. In addition, the
         Company shall not pay any benefit under this Agreement if the Executive
         has made any material misstatement of fact on any application for
         insurance or any benefits provided by the Company to the Executive.

                                    ARTICLE 5
                           ADMINISTRATION OF AGREEMENT


5.1      PLAN ADMINISTRATOR DUTIES. This Agreement shall be administered by a
         Plan Administrator which shall consist of the Board, or such committee
         as the Board shall appoint. The Executive may be a member of the Plan
         Administrator. The Plan Administrator shall also have the discretion
         and authority to (i) make, amend, interpret and enforce all appropriate
         rules and regulations for the administration of this Agreement and (ii)
         decide or resolve any and all questions including interpretations of
         this Agreement, as may arise in connection with the Agreement.
 5.2     AGENTS. In the administration of this Agreement, the Plan Administrator
         may employ agents and delegate to them such administrative duties as it
         sees fit, (including acting through a duly appointed representative),
         and may from time to time consult with counsel who may be counsel to
         the Company.
5.3      BINDING EFFECT OF DECISIONS. The decision or action of the Plan
         Administrator with respect to any question arising out of or in
         connection with the administration, interpretation and application of
         the Agreement and the rules and regulations promulgated hereunder shall
         be final and conclusive and binding upon all persons having any
         interest in the Agreement.
5.4      INDEMNITY OF PLAN ADMINISTRATOR. The Company shall indemnify and hold
         harmless the members of the Plan Administrator against any and all
         claims, losses, damages, expenses or liabilities arising from any
         action or failure to act with respect to this Agreement, except in the
         case of willful misconduct by the Plan Administrator or any of its
         members.



<PAGE>



5.5      COMPANY INFORMATION. To enable the Plan Administrator to perform its
         functions, the Company shall supply full and timely information to the
         Plan Administrator on all matters relating to the compensation of the
         Executive, the date and circumstances of the retirement, Disability,
         death or Termination of Employment of the Executive, and such other
         pertinent information as the Plan Administrator may reasonably require.

                                    ARTICLE 6
                           CLAIMS AND REVIEW PROCEDURE

6.1      For all claims other than Disability benefits:

         6.1.1    CLAIMS PROCEDURE. Any individual ("Claimant") who has not
                  received benefits under this Agreement that he or she believes
                  should be paid shall make a claim for such benefits as
                  follows:

                  6.1.1.1    INITIATION WRITTEN CLAIM.  The Claimant initiates a
                             claim by submitting to the Company a written claim
                             for the benefits.
                  6.1.1.2    TIMING OF COMPANY RESPONSE. The Company shall
                             respond to such Claimant within 90 days after
                             receiving the claim. If the Company determines that
                             special circumstances require additional time for
                             processing the claim, the Company can extend the
                             response period by an additional 90 days by
                             notifying the Claimant in writing, prior to the end
                             of the initial 90-day period, that an additional
                             period is required. The notice of extension must
                             set forth the special circumstances and the date by
                             which the Company expects to render its decision.
                  6.1.1.3    NOTICE OF DECISION. If the Company denies part or
                             all of the claim, the Company shall notify the
                             Claimant in writing of such denial. The Company
                             shall write the notification in a manner calculated
                             to be understood by the Claimant. The notification
                             shall set forth:

                             (a)    The specific reasons for the denial,
                             (b)    A reference to the specific provisions of
                                    this Agreement on which the denial is based,
                             (c)    A description of any additional information
                                    or material necessary for the Claimant to
                                    perfect the claim and an explanation of why
                                    it is needed,
                             (d)    An explanation of this Agreement's review
                                    procedures and the time limits applicable to
                                    such procedures, and
                             (e)    A statement of the Claimant's right to bring
                                    a civil action under ERISA Section 502(a)
                                    following an adverse benefit determination
                                    on review.



<PAGE>


         6.1.2    REVIEW PROCEDURE. If the Company denies part or all of the
                  claim, the Claimant shall have the opportunity for a full and
                  fair review by the Company of the denial, as follows:

                  6.1.2.4   INITIATION WRITTEN REQUEST. To initiate the review,
                            the Claimant, within 60 days after receiving the
                            Company's notice of denial, must file with the
                            Company a written request for review.
                  6.1.2.5   ADDITIONAL SUBMISSIONS INFORMATION ACCESS. The
                            Claimant shall then have the opportunity to submit
                            written comments, documents, records and other
                            information relating to the claim. The Company shall
                            also provide the Claimant, upon request and free of
                            charge, reasonable access to, and copies of, all
                            documents, records and other information relevant
                            (as defined in applicable ERISA regulations) to the
                            Claimant's claim for benefits.
                  6.1.2.6   CONSIDERATIONS ON REVIEW. In considering the review,
                            the Company shall take into account all materials
                            and information the Claimant submits relating to the
                            claim, without regard to whether such information
                            was submitted or considered in the initial benefit
                            determination.
                  6.1.2.7   TIMING OF COMPANY RESPONSE. The Company shall
                            respond in writing to such Claimant within 60 days
                            after receiving the request for review. If the
                            Company determines that special circumstances
                            require additional time for processing the claim,
                            the Company can extend the response period by an
                            additional 60 days by notifying the Claimant in
                            writing, prior to the end of the initial 60-day
                            period, that an additional period is required. The
                            notice of extension must set forth the special
                            circumstances and the date by which the Company
                            expects to render its decision.
                  6.1.2.8   NOTICE OF DECISION. The Company shall notify the
                            Claimant in writing of its decision on review. The
                            Company shall write the notification in a manner
                            calculated to be understood by the Claimant. The
                            notification shall set forth:

                            (a)     The specific reasons for the denial,
                            (b)     A reference to the specific provisions of
                                    this Agreement on which the denial is based,
                            (c)     A statement that the Claimant is entitled to
                                    receive, upon request and free of charge,
                                    reasonable access to, and copies of, all
                                    documents, records and other information
                                    relevant (as defined in applicable ERISA
                                    regulations) to the Claimant's claim for
                                    benefits, and
                            (d)     A statement of the Claimant's right to bring
                                    a civil action under ERISA Section 502(a).

6.2      For Disability claims:



<PAGE>


6.2.1    CLAIMS PROCEDURES. Any individual ("Claimant") who has not received
         benefits under this Agreement that he or she believes should be paid
         shall make a claim for such benefits as follows:

         6.2.1.2    INITIATION WRITTEN CLAIM. The Claimant initiates a claim by
                    submitting to the Company a written claim for the benefits.
         6.2.1.3    TIMING OF COMPANY RESPONSE. The Company shall notify the
                    Claimant in writing or electronically of any adverse
                    determination as set out in this Section.
         6.2.1.4    NOTICE OF DECISION. If the Company denies part or all of the
                    claim, the Company shall notify the Claimant in writing of
                    such denial. The Company shall write the notification in a
                    manner calculated to be understood by the Claimant. The
                    notification shall set forth:

                    (a)    The specific reasons for the denial,
                    (b)    A reference to the specific provisions of this
                           Agreement on which the denial is based,
                    (c)    (c) A description of any additional information or
                           material necessary for the Claimant to perfect the
                           claim and an explanation of why it is needed,
                    (d)    An explanation of the Agreement's review procedures
                           and the time limits applicable to such procedures,
                    (e)    A statement of the Claimant's right to bring a civil
                           action under ERISA Section 502(a) following an
                           adverse benefit determination on review,
                    (f)    [Seess.2560.503-1 (g)(v)] Any internal rule,
                           guideline, protocol, or other similar criterion
                           relied upon in making the adverse determination, or a
                           statement that such a rule, guideline, protocol, or
                           other similar criterion was relied upon in making the
                           adverse determination and that the Claimant can
                           request and receive free of charge a copy of such
                           rule, guideline, protocol or other criterion from the
                           Company, and
                    (g)    If the adverse benefit determination is based on a
                           medical necessity or experimental treatment or
                           similar exclusion or limit, either an explanation of
                           the scientific or clinical judgment for the
                           determination, applying the terms of this Agreement
                           to the Claimant's medical circumstances, or a
                           statement that such explanation will be provided free
                           of charge upon request.

          6.2.1.5   TIMING OF NOTICE OF DENIAL/EXTENSIONS. The Company shall
                    notify the Claimant of denial of benefits in writing or
                    electronically not later than 45 days after receipt of the
                    claim by the Company. The Company may elect to extend
                    notification by two 30-day periods subject to the following
                    requirements:



<PAGE>


                   (a)     For the first 30-day extension, the Company shall
                           notify the Claimant (1) of the necessity of the
                           extension and the factors beyond the Company's
                           control requiring an extension; (2) prior to the end
                           of the initial 45-day period; and (3) of the date by
                           which the Company expects to render a decision.
                   (b)     If the Company determines that a second 30-day
                           extension is necessary based on factors beyond the
                           Company's control, the Company shall follow the same
                           procedure in (a) above, with the exception that the
                           notification must be provided to the Claimant before
                           the end of the first 30-day extension period. -
                   (c)     For any extension provided under this section, the
                           Notice of Extension shall specifically explain the
                           standards upon which entitlement to a benefit is
                           based, the unresolved issues that prevent a decision
                           on the claim, and the additional information needed
                           to resolve those issues. The Claimant shall be
                           afforded 45 days within which to provide the
                           specified information.

6.2.2    REVIEW PROCEDURES DENIAL OF BENEFITS. If the Company denies part or all
         of the claim, the Claimant shall have the opportunity for a full and
         fair review by the Company of the denial, as follows:

         6.2.2.1    INITIATION OF APPEAL. Within 180 days following notice of
                    denial of benefits, the Claimant shall initiate an appeal by
                    submitting a written notice of appeal to Company.
         6.2.2.2    SUBMISSIONS ON APPEAL INFORMATION ACCESS. The Claimant shall
                    be allowed to provide written comments, documents, records,
                    and other information relating to the claim for benefits.
                    The Company shall provide to the Claimant, upon request and
                    free of charge, reasonable access to, and copies of, all
                    documents, records, and other information relevant (as
                    defined in applicable ERISA regulations) to the Claimant's
                    claim for benefits.
         6.2.2.3    ADDITIONAL COMPANY RESPONSIBILITIES ON APPEAL. On appeal,
                    the Company shall:

                    (a)    [See ss.2560.503-l(h)(3)(i)-(v)] Take into account
                           all materials and information the Claimant submits
                           relating to the claim, without regard to whether such
                           information was submitted or considered in the
                           initial benefit determination;
                    (b)    Provide for a review that does not afford deference
                           to the initial adverse benefit determination and that
                           is conducted by an appropriate named fiduciary of the
                           Company who is neither the individual who made the
                           adverse benefit determination that is the subject of
                           the appeal, nor the



<PAGE>


                  subordinate of such individual;
           (c)    In deciding an appeal of any adverse benefit determination
                  that is based in whole or in part on a medical judgment,
                  including determinations with regard to whether a
                  particular treatment, drug, or other item is experimental,
                  investigational, or not medically necessary or appropriate,
                  consult with a health care professional who has appropriate
                  training and experience in the field of medicine involved in
                  the medical judgment;
           (d)    Identify medical or vocational experts whose advise was
                  obtained on behalf of the Company in connection with a
                  Claimant's adverse benefit determination, without regard to
                  whether the advice was relied upon in making the benefit
                  determination; and
           (e)    Ensure that the health care professional engaged for purposes
                  of a consultation under subsection (c) above shall be an
                  individual who was neither an individual who was consulted in
                  connection with the adverse benefit determination that is the
                  subject of the appeal, nor the subordinate of any such
                  individual.

6.22.4     TIMING OF NOTIFICATION OF BENEFIT DENIAL - APPEAL DENIAL. The Company
           shall notify the Claimant not later than 45 days after receipt of the
           Claimant's request for review by the Company, unless the Company
           determines that special circumstances require an extension of time
           for processing the claim. If the Company determines that an extension
           is required, written notice of such shall be furnished to the
           Claimant prior to the termination of the initial 45-day period, and
           such extension shall not exceed 45 days. The Company shall indicate
           the special circumstances requiring an extension of time and the date
           by which the Company expects to render the determination on review.

 6.2.2.5   CONTENT OF NOTIFICATION OF BENEFIT DENIAL. The Company shall provide
           the Claimant with a notice calculated to be understood by the
           Claimant, which shall contain:

           (a)    The specific reason or reasons for the adverse determination;
           (b)    Reference to the specific plan provisions on which the benefit
                  determination is based;
           (c)    A statement that the Claimant is entitled to receive, upon
                  request and free of charge, reasonable access to, and copies
                  of all documents, records, and other relevant information (as
                  defined in applicable ERISA regulations);
           (d)    A statement of the Claimant's right to bring an action under
                  ERISA Section 502(a);



<PAGE>


           (e)    [See ss.2560.503-1(j)(5)] Any internal rule, guideline,
                  protocol, or other similar criterion relied upon in making the
                  adverse determination, or a statement that such a rule,
                  guideline, protocol, or other similar criterion was relied
                  upon in making the adverse determination and that the Claimant
                  can request and receive free of charge a copy of such rule,
                  guideline, protocol or other criterion from the Company;
           (f)    If the adverse benefit determination is based on a medical
                  necessity or experimental treatment or similar exclusion or
                  limit, either an explanation of the scientific or clinical
                  judgment for the determination, applying the terms of this
                  Agreement to the Claimant's medical circumstances, or a
                  statement that such explanation will be provided free of
                  charge upon request; and
           (g)    The following statement: "You and your Company may have other
                  voluntary alternative dispute resolution options such as
                  mediation. One way to find out what may be available is to
                  contact your local U.S. Department of Labor Office and your
                  state insurance regulatory agency."

                                    ARTICLE 7
                   AMENDMENT AND TERMINATION OF THE AGREEMENT

 7.1     AMENDMENT AND TERMINATION. Subject to Article 4, prior to the
         commencement of benefit payments under this Agreement, the Company
         reserves the right to amend or terminate this Agreement at any time by
         the action of the Board.

                                    ARTICLE 8
                                  MISCELLANEOUS

 8.1     UNSECURED GENERAL CREDITOR. The Executive and the Executive's
         Beneficiaries, successors and assigns shall have no legal or equitable
         rights, interests or claims in any property or assets of the Company.
         Any and all of the Company's assets shall be, and remain, the general,
         unpledged unrestricted assets of the Company. The Company's obligation
         under the Agreement shall be merely that of an unfunded and unsecured
         promise to pay money in the future.
 8.2     NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this
         Agreement shall not be deemed to constitute a contract of employment
         between the Company and the Executive. Such employment is hereby
         acknowledged to be an "at will" employment relationship that can be
         terminated at any time for any reason, with or without cause, unless
         expressly provided in a written employment agreement. Nothing in this
         Agreement shall be deemed to give a Executive the right to be retained
         in the service of the Company or to interfere with the right of the
         Company to discipline or discharge the Executive at any time.


<PAGE>


8.3      PARTICIPATION IN OTHER PLANS. Nothing herein contained shall be
         construed to alter, abridge, or in any manner affect the rights and
         privileges of the Executive to participate in and be covered by any
         pension, profit sharing, group insurance, bonus or similar employee
         plans which the Company may now or hereafter maintain.
8.4      ALIENABILITY. Neither the Executive nor any Beneficiary under this
         Agreement shall have any power or right to transfer, assign,
         anticipate, hypothecate, mortgage, commute, modify, or otherwise
         encumber in advance any of the benefits payable hereunder, nor shall
         any of said benefits be subject to seizure for the payment of any
         debts, judgments, alimony, or separate maintenance owed by the
         Executive or the Executive's Beneficiary or any of them, to be
         transferable by operation of law in the event of bankruptcy,
         insolvency, or otherwise. In the event the Executive or any Beneficiary
         attempts assignment, commutation, hypothecation, transfer, or disposal
         of the benefit hereunder, the Company's liabilities shall forthwith
         cease and terminate.
8.5      SUCCESSORS. The provisions of this Agreement shall bind and inure to
         the benefit of the Company and its successors and assigns and the
         Executive and the Executive's Beneficiary.
8.6      REORGANIZATION. The Company shall not merge or consolidate into or with
         another corporation, or reorganize, or sell substantially all of its
         assets to another corporation, firm, or person unless and until such
         succeeding or continuing corporation, firm, or person agrees to assume
         and discharge the obligations of the Company under this Agreement. Upon
         the occurrence of such event, the term "Company" as used in this
         Agreement shall be deemed to refer to such succeeding or continuing
         company, firm, or person.
8.7      INTERPRETATION. Wherever the fulfillment of the intent and purpose of
         this Agreement requires, and the context will permit, the use of the
         masculine gender includes the feminine and use of the singular includes
         the plural.
8.8      ALTERNATIVE ACTION. In the event it shall become impossible for the
         Company or the Plan Administrator to perform any act required by this
         Agreement, the Company or Plan Administrator may in its discretion
         perform such alternative act as most nearly carries out the intent and
         purpose of this Agreement and is in the best interests of the Company.
8.9      APPLICABLE LAW. Subject to ERISA, the provisions of this Agreement
         shall be construed and interpreted in accordance with the laws of the
         state of Pennsylvania, without regard to its conflict of law
         principles.
8.10     HEADINGS. Article and section headings are for convenient reference
         only and shall not control or affect the meaning or construction of any
         of its provisions.



<PAGE>


8.11     FURNISHING INFORMATION. The Executive or the Executive's Beneficiary
         will cooperate with the Plan Administrator by furnishing any and all
         information requested by the Plan Administrator and take such other
         actions as may be requested in order to facilitate the administration
         of the Agreement and the payments of benefits hereunder, including but
         not limited to taking such physical examinations as the Plan
         Administrator may deem necessary.

 8.12    VALIDITY. In case any provision of this Agreement shall be illegal or
         invalid for any reason, said illegality or invalidity shall not affect
         the remaining parts hereof, but this Agreement shall be construed and
         enforced as if such illegal and invalid provision has never been
         inserted herein.

 8.13    NOTICE. Any notice or filing required or permitted to be given to the
         Plan Administrator under this Agreement shall be sufficient if in
         writing and handdelivered, or sent by registered or certified mail, to
         the address below:


                        198 E. Tioga St.
                        Tunkhannock, PA
                        18657


         Such notice shall be deemed given as of the date of delivery or, if
         delivery is made by mail, as of the date shown on the postmark or the
         receipt for registration or certification.

         Any notice or filing required or permitted to be given to the Executive
         under this Agreement shall be sufficient if in writing and
         hand-delivered, or sent by mail, to the last known address of the
         Executive.

 8.14    SIGNED COPIES. This Agreement may be executed in any number of
         counterparts, each of which shall be deemed to be an original, and such
         counterparts taken together shall constitute one (1) and the same
         instrument.


         IN WITNESS WHEREOF, the Company and the Executive have caused this
Agreement to be duly executed as of the Effective Date above.


EXECUTIVE                                  GRANGE NATIONAL BANK

 /S/ THOMAS A. MCCULLOUGH                  By: /S/ SALLY A. STEELE
 Thomas A. McCullough                       Sally A. Steele
                                                     As its Secretary


BENEFICIARY DESIGNATION FORM



<PAGE>


                             FIRST AMENDMENT TO THE
                              GRANGE NATIONAL BANK
                              AMENDED AND RESTATED
                   SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

         This First Amendment to the Grange National Bank Amended and Restated
Supplemental Executive Retirement Agreement is entered into as of March 26, 2003
by and between GRANGE NATIONAL BANK a nationally-chartered commercial bank
located in Laceyville, Pennsylvania (the "Company"), and THOMAS A. MCCULLOUGH
(the "Executive").

         On January 17, 2003, the Company and the Executive entered into an
Amended and Restated Supplemental Retirement Agreement (the "Agreement"). The
parties now desire to amend the Agreement as set forth herein.

          The parties hereto, intending to be legally bound hereby, agree as
follows:

         1. Section 2.5 of the Agreement is amended by adding the following
sentence at the end of the Section:

         Notwithstanding any other provisions to the contrary in this Section
         2.5, the Company shall not pay the Change of Control Benefit but shall
         instead pay the Early Retirement Benefit in the amounts and at the
         times provided in Section 2.3 hereof if (a) the payment of the Change
         of Control Benefit would cause the amount of any other payments that
         the Executive otherwise has the right to receive from the Company to be
         reduced as a result of such other payments and the Change of Control
         Benefit being limited to the largest amount as will result in no
         portion of them being subject to excise tax imposed under Section 4999
         of the Code, or (b) the payment of the Change of Control Benefit would
         cause the sum of (i) any other payments that the Executive has the
         right to receive from the Company and (ii) the Change in Control
         Benefits to be a "parachute payment," as defined by Section 280G of the
         Code.

         2. All other terms and conditions of the Agreement remain in full force
and effect.

         IN WITNESS WHEREOF, the Company and the Executive have caused this
First Amendment to be duly executed as of the date first above written.

EXECUTIVE                                    GRANGE NATIONAL BANK

 /S/ THOMAS A. MCCULLOUGH                    By: /S/SALLY A. STEELE
 Thomas A. McCullough                         Sally A. Steele
                                                       As its Secretary