directors' deferred compensation plan




EXHIBIT
10.2




CITIZENS
FINANCIAL SERVICES, INC.

DIRECTORS’
DEFERRED

COMPENSATION
PLAN



























	
      CITIZENS
      FINANCIAL SERVICES, INC.

      DIRECTORS’
      DEFERRED COMPENSATION PLAN

	
      ARTICLE
      1

      DEFINITIONS

	
      1.01
	
      Administrator:
	 	
      The
      administrator appointed to administer the Plan.

	
      1.02
	
      Board:
	 	
      The
      Board of Directors of Citizens Financial Services, Inc.

	
      1.03
	
      Code:
	 	
      The
      Internal Revenue Code of 1986, as amended, or as it may be amended from
      time to time.

	
      1.04
	
      Compensation:
	 	
      All
      of a Participant’s fees, earnings or compensation which is actually paid
      to him/her during the Plan Year.

	
      1.05
	
      Director:
	 	
      An
      individual who is a member of the Board of Directors of First Citizens
      National Bank, as elected in accordance with the by-laws of the Bank,
      Citizens Financial Services, Inc. or any subsidiary and/or affiliated
      corporation.

	
      1.06
	
      Effective
      Date:
	 	
      January
      1, 1991

	
      1.07
	
      Employer:
	 	
      First
      Citizens National Bank, Citizens Financial Services, Inc. and any
      subsidiary and/or affiliated corporation.

	
      1.08
	
      Participant:
	 	
      A
      Director participating in the Plan.

	
      1.09
	
      Plan:
	 	
      The
      Citizens Financial Services, Inc. Directors’ Deferred Compensation
      Plan.

	
      1.10
	
      Plan
      Year:
	 	
      The
      twelve (12) consecutive month period beginning each January 1 and ending
      on December 31.

	
      1.11
	
      Retirement
      Date:
	 	
      As
      designated in the Articles of Association or By-Laws of Citizens Financial
      Services and affiliated corporations.

	
      1.12
	
      Valuation
      Date:
	 	
      The
      last day of each Plan Year.














1

















	
      ARTICLE
      II

      ELIGIBILITY

	
      2.01
	
      Only
      those Directors, as defined in Section 1.05, shall be eligible to
      participate in this Plan. Those Directors deemed eligible to participate
      shall be so notified. A Director electing to participate in this Plan
      shall notify the Board by filing a written notice with the Board, in the
      form so prescribed by the Board. Such Director shall become a Participant
      on the first day of the Plan Year (each January 1) following his/her
      election to participate.

	
       

      2.02
	
      In
      addition, any individuals who are on the Board of Directors of an
      institution or corporation which is absorbed or acquired by the Employer
      sponsoring this Plan shall also become Participants in this Plan on the
      day that such acquisition becomes effective, subject to approval by the
      Board.














2

















	
      ARTICLE
      III

      CONTRIBUTIONS

	
      3.01
	
      The
      Plan and the benefits thereunder shall be unfunded at all times. A
      bookkeeping account shall be established and maintained for each
      Participant to which will be credited the fee amounts that each
      Participant elects to defer. The benefits payable under the Plan shall be
      paid by the Employer, when due under the terms of the Plan out of its
      general assets.

	
      3.02
	
      A
      limit on the amount of deferrals may be established by the Board and shall
      be subject to the sole discretion of the Board. Deferrals shall be limited
      such that when aggregated with Compensation paid to any one Participant
      the generally accepted rules of “reasonableness of compensation” will be
      observed. Thus the amount of Compensation paid during the Plan Year shall
      not exceed the value of services performed. In determining whether
      Compensation is “reasonable” the value of the services rendered in earlier
      years shall be taken into consideration.

       

      The
      test of reasonableness shall be whether the total payments in the current
      Plan Year plus all Compensation paid in earlier years represents a
      reasonable allowance for all services rendered up to the end of the
      current Plan Year.

	
      3.03
	
      The
      Employer shall pay all the administrative expenses of the Plan so long as
      the Plan remains in effect.

	
      3.04
	
      A
      Participant may elect to defer all or a portion of his/her future monthly
      Director’s fees. Such election must be in writing and filed with the
      Administrator prior to the first day of the Plan Year for Directors in
      office and prior to the date their term begins for Directors elected to
      fill vacancies and who were not Directors on the preceding December
      31.

	
      3.05
	
      An
      election to defer Director’s fees shall continue from year to year unless
      the Participant terminates it in accordance with section
    3.06.

	
      3.06
	
      An
      election by a Director to defer fees may be terminated by written request
      to the Administrator. In the event of such termination the amount already
      deferred by the Participant shall not be paid to such Participant until
      the occurrence of one of the events enumerated in section
      4.03.














3

















	
      ARTICLE
      IV

      BENEFITS

	
      4.01
	
      The
      amount of the benefit payable under the Plan shall be equal to that
      benefit which can be purchased with the funds in the Participant’s
      account.

	
      4.02
	
      The
      benefit payable to or on behalf of a Participant as determined under
      section 4.01 shall be paid in the form as decided upon by the Board, in
      its sole discretion, upon the occurrence of one of the evens enumerated in
      section 4.03. Under no circumstances shall a benefit payout period exceed
      the life expectancy of the Participant or the Participant and his or her
      spouse

	
      4.03
	
      Benefits
      due under the Plan shall be distributed upon the occurrence of one of the
      following events:

	 	
      (a) the
      Participant’s attainment of his/her Retirement Date;

	 	
      (b) the
      disability off the Participant;

	 	
      (c) the
      death of the Participant;

	 	
      (d) the
      “hostile” acquisition of the Employer by another institution;
      or

	 	
      (e) the
      termination of the Participant as a Director.

	
      4.04
	
      Benefits
      payable under the Plan shall be paid by the Employer from the general
      assets of the Employer and charged against the Account maintained with
      respect to the benefits of such Participant. No payment shall be made to
      or with respect to a Participant to the extent that such payment would
      exceed the balance then remaining in the Account maintained with respect
      to the benefits of such Participant.

	
      4.05
	
      A
      participant has the right to designate a Beneficiary to receive any
      benefit sunder the Plan because of the death of the Participant before
      retirement and to change that designation from time to
    time.

	
      4.06
	
      The
      Plan shall provide a death benefit to the Beneficiary of a Participant who
      dies before reaching his/her Retirement Date. Such benefit shall be equal
      to the benefit thus accrued under the Plan for such Participant at the
      time of death.

	
      4.07
	
      In
      the event a Participant incurs a long-term disability, as defined below,
      he/she shall be entitled to a benefit equal to the benefit thus accrued
      under the Plan. Disability means the inability to engage in any
      substantial gainful activity by reason of any medically determinable
      physical or mental impairment that can be expected to last for a
      continuous period of not less than twelve (12) months. The permanence and
      degree of such impairment shall be supported by medical
      evidence.














4

















	
      ARTICLE
      V

      ADMINISTRATION

	
      5.01
	
      The
      Administrator shall have such powers and duties as are necessary for the
      proper administration of the Plan, including, but not limited to, the
      power to make decisions with respect to the application and interpretation
      of the Plan.

	
      5.02
	
      The
      Administrator shall be entitled to rely on the advice or opinion of any
      consultant, accountant or attorney and such persons may also act in their
      respective professional capacities as advisors to the
      Employer.

	
      5.03
	
      Subject
      to the limitations contained in the Plan, the Administrator shall be
      empowered from time to time, at its discretion, to establish rules for the
      transaction of its business and for the administration of the
      Plan.

	
      5.04
	
      The
      Administrator shall be responsible for filing any returns, reports or
      documents with the various government agencies, such as the Internal
      Revenue Service, as required by law or the regulations. In addition, the
      Administrator shall also be responsible for providing communication to
      Participants as required by law or the regulations.

	
      5.05
	
      On
      each Valuation Day, or as soon as practicable thereafter, the
      Administrator shall furnish to each Participant and retired Participant a
      statement reflecting the status of his/her account, including interest
      credited thereto, as of the end of such Plan Year.

	
      5.06
	
      Upon
      the occurrence of one of the events enumerated in section 4.03 of the
      Plan, the Administrator shall begin payment of benefits to such
      Participant, or such Participant’s Beneficiary, from the Employer’s
      general assets in the form prescribed in section 4.02 until such
      Participant’s account is exhausted.

	
      5.07
	
      Claims:
      The Administrator shall make each claim determination in a uniform and
      non-discriminatory manner. Within 90 days after the receipt of the claim
      by the Administrator, the Administrator shall either grant the claim, deny
      the claim or notify the Participant, former Participant, or Beneficiary
      (hereafter “Claimant”) that special circumstances have required an
      extension of time for the processing o the claim; such extension not to
      exceed 180 days from the original notice.














5













Within 30
days after denial of any benefit under the Plan, the Administrator shall give to
the Claimant written notice by certified mail, directed to his or her last
address of record with the Administrator, of the denial of claim for benefits.
The notice shall set forth the specific reason for such denial, shall make
specific reference to Plan provisions upon which the denial is based, shall
describe any additional material or information necessary for the Claimant to
perfect his or her claim and why such material is necessary, and shall advise
the Claimant that he or she may file a written appeal of the determination with
the Administrator within 60 days after receipt of such notice. In connection
with such appeal, the Claimant or his or her duly authorized representative may
review pertinent documents and submit issues and comments in writing. Failure of
the Claimant to file a written appeal with the Administrator within the
allowable 60-day period shall constitute an irrevocable consent by the Claimant
to the Administrator’s decision denying the benefit claimed, and the
Administrator’s written notice shall so state.




Within 60
days after the filing of the appeal, the Administrator shall notify the Claimant
either as to the decision on the appeal or that special circumstances require an
extension of time for processing; such extension not to exceed 120 days from the
date of the filing of the appeal. If neither the decision nor a notice of
extension is furnished within the 60-day period, the claim shall be deemed to be
denied on appeal.




All
notices under this section shall be written in a manner calculated to be
understood by Claimant.








6

















	
      ARTICLE
      VI

      AMENDMENT
      AND TERMINATION

	
      6.01
	
      While
      it is the intention of the Employer that this Plan should be permanent and
      continue to operate, the Employer reserves the right to terminate the
      Plan, at any time, at its discretion, subject to the approval and consent
      of the Board.

	
      6.02
	
      The
      Employer reserves the right to amend the Plan agreement at any time, and
      from time to time, by appropriate action of the Board and delivery of a
      certified copy of the amendment to the
Administrator.














7

















	
      ARTICLE
      VII

      MISCELLNEOUS

	
      7.01
	
      Nothing
      contained in this Plan shall create, or be construed or interpreted to
      create, any new or additional obligations on the part of the Employer to
      retain any person in its employ or interfere in any way with the right of
      the Employer or the Board to discharge any Director.

	
      7.02
	
      Should
      any provision of this Plan be determined by a court of competent
      jurisdiction to be unlawful or unenforceable, such determination shall not
      adversely affect the remaining provisions of this Plan, unless it shall
      make impossible the maintenance or operation of the Plan for its intended
      purpose. To the extent any provision of this Plan is determined to be
      unlawful or unenforceable, this Plan shall be construed to be carried out
      to the fullest extent possible in a lawful and enforceable
      manner.

	
      7.03
	
      This
      Plan may be executed in any number of counterparts, each of which all be
      considered an original and said counterparts shall constitute by one and
      the same instrument.

	
      7.04
	
      The
      Plan at all times shall be entirely unfunded and no provision shall at any
      time be made with respect to segregating any assets of the Employer for
      payment of benefits hereunder. No Participant, Beneficiary, or any other
      person shall have any interest in any particular assets of the Employer by
      reason of the right to receive a benefit under the Plan and any such
      Participant, Beneficiary or other person shall have only the rights of a
      general creditor of the Employer with respect to any rights under the
      Plan. Nothing contained in the Plan shall constitute a guarantee by the
      Employer or any other entity or person that the assets of the Employer
      will be sufficient to pay any benefit hereunder.

	
      7.05
	
      No
      benefit payable under the Plan shall be subject in any manner to
      anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
      or charge prior to actual receipt thereof by the payee. Any attempt to do
      so shall be void and the Employer shall not be liable for or subject to
      the debts, contracts, liabilities or torts of any person entitled to any
      benefit under the Plan.

	
      7.06
	
      In
      the event a Participant ceases to be a Director and becomes a director,
      proprietor, officer, partner, employee or otherwise becomes affiliated
      with any business that is in competition with the Employer, the entire
      balance of such Participant’s accounts, including interest, if directed by
      the Board, and in its sole discretion, shall be subject to
      forfeiture.

       

      Furthermore,
      a Participant will achieve a non-forfeitable interest in his or her
      benefit only as such benefit becomes payable as determined by the form of
      payment designated by the Board (section 4.02). If a terminated
      Participant should become a director, proprietor, officer, partner,
      employee or otherwise becomes affiliated with any business that is in
      competition with the Employer, the balance of such Participant’s benefit
      not yet paid out shall be subject to forfeiture at the discretion of the
      Board.

	
      7.07
	
      The
      benefits of individuals (Directors) who are Participants in the Directors’
      Deferred Compensation Plan of First Citizens National Bank or the Deferred
      Compensation Plan - Directors’ Fees of Star Savings and Loan Association
      on or before December 31, 1990, shall in no way be subject to reduction or
      attachment due to a change in ownership or ownership makeup of First
      Citizens National Bank or Star Savings and Loan Association which is
      effective on or after December 31, 1990.










IN
WITNESS WHEREOF, the
individuals have hereunto set their hands and have caused this instrument to be
executed by the Employer.








	
      Employer
	
      CITIZENS
      FINANCIAL SERVICES, INC.

       

	
      December
      17, 1991
	
      /s/
      Richard E. Wilber

	
      Date
	
      Richard
      E. Wilber