GRANGE NATIONAL BANK
                              AMENDED AND RESTATED
             SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT


           This Agreement is entered into this February 4, 2003, by and between
  GRANGE NATIONAL BANK, a nationally-chartered commercial bank located in
  Laceyville, Pennsylvania (the "Company"), and _____________ (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 (hereinafter this Agreement shall collectively refer to
           any combination of these

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          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.

  1.7     "COMPENSATION" means the annual compensation, including bonuses,


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          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.

  1.11    "EARLY RETIREMENT DATE" means the date the Executive attains both the
          age of fifty-five (55) and ten (10) Years of Service while in the
          continuous employ of the Company.

  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-FIFTH (65TH)
          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.


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  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 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 percent (80%) 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


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          Employment on or after the Early Retirement Date and 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 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
          following the Early 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.
  2.4     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 earlier of
          first day of the month following the Executive's Normal Retirement Age
          or (ii) the date payments to the Executive cease under a
          Company-sponsored disability plan, 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, reaching the Early Retirement Date, or attaining Normal
          Retirement Age, the Company shall pay to the Executive an annual
          Change of Control 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
          Change of Control 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.
  2.6     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:


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                              Year 1: 100% of Compensation
                              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


<PAGE>



          is subsequently dissolved. The Executive shall have the right to
          change a Beneficiary by completing, signing and otherwise complying
          with the terms of the 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 filed 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


<PAGE>



          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 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


<PAGE>



          with respect to this Agreement, except in the case of willful
          misconduct by the Plan Administrator or any of its members.
  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

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                                     determination on review.

         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).


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6.2      For Disability claims:
  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


<PAGE>



                    two 30-day periods subject to the following requirements:

                     (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


<PAGE>



                   determination that is the subject of the appeal, nor the
                   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.

  6.2.2.4   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


<PAGE>



                   ERISA Section 502(a);
            (e)    [Seess.2560.503-l(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,
          unpiedged 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.


<PAGE>



          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.
  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.


<PAGE>



  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.
  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

_______________                              By: /S/SALLY A. STEELE
                                             Sally A. Steele
                                                   As its Secretary