EX-10.3






EXHIBIT 10.3









CITIZENS & NORTHERN CORPORATION

1995 STOCK INCENTIVE PLAN (As Amended)




RESTRICTED STOCK AGREEMENT



RESTRICTED STOCK AGREEMENT dated as of the 5th day of January, 2009, by and between Citizens &
Northern Corporation (the “Corporation”) and
                                        
, an employee of the
Corporation or of a subsidiary (the “Recipient”).



Pursuant to the Citizens & Northern Corporation 1995 Stock Incentive Plan (the “Plan”), as amended,
the Compensation Committee of the Board of Directors (the “Committee”) has determined that the
Recipient is to be granted, on the terms and conditions set forth herein,                      Restricted
Shares of the Corporation’s common stock and hereby grants such Restricted Shares. It is intended
that the Restricted Shares qualify as an “Incentive Stock Option” within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”).





	 	1.	 	Number of Shares and Price. Restricted Stock shall consist of shares of Stock that will
be acquired by and issued to the Recipient at a designated time approved by the board of
directors, for no purchase price, and under and subject to such transfer, forfeiture and
other restrictions, conditions or terms as shall be determined by the Committee, including
but not limited to prohibitions against transfer and substantial risks of forfeiture within
the meaning of Section 83 of the Code,
	 
	 	2.	 	Rights of Recipient. Except as otherwise provided in the Plan or the Restricted Stock
Agreement, a Recipient of shares of Restricted Stock shall have all the rights as does a
holder of Stock, including without limitation the right to vote such shares and receive
dividends with respect thereto; however, during the time period of any restrictions,
conditions or terms applicable to such Restricted Stock, the shares thereof and the right
to vote the same and receive dividends thereon shall not be sold, assigned, transferred,
exchanged, pledged, hypothecated, encumbered or otherwise disposed of except as permitted
by the Plan or the Restricted Stock Agreement. Cash dividends shall be paid out and shall
not participate in Dividend Reinvestment. Stock dividends resulting in whole shares shall
be added to the shares held in the Restricted Account and shall be distributed to the
Recipient with subsequent distributions of any Award for which they accrued. Partial
            shares that result from any stock dividend shall be paid to the Recipient in cash at the
time of the payment of the stock dividend. If the Restricted Shares expire prior to the
satisfaction of performance standards set forth in section 4 or due to forfeiture as set
forth in section 5, all shares accrued by virtue of stock dividends shall be forfeited.
	 
	 	3.	 	Holding of Restricted Shares. Each certificate for shares of Restricted Stock shall
be deposited with the Secretary of the Corporation, or the office thereof, and shall bear a
legend in substantially the following form and content:
	 
	 	 	 	This Certificate and the shares of Stock hereby represented are subject to the provisions of
the Corporation’s Stock Incentive Plan and a certain agreement entered into between the
owner and the Corporation pursuant to said Plan. The release of the Certificate and the
shares of Stock hereby represented from such provision shall occur only as provided by said
Plan and Agreement, a copy of which are on file in the office of the Secretary of the
Corporation.
	 
	 	 	 	Upon the lapse or satisfaction of the restrictions, conditions and terms applicable to such
Restricted Stock, a certificate for the shares of Stock free thereof with such legend shall
be issued to the Recipient.
	 
	 	4.	 	Release and Lapse of Restricted Shares. One-third of the total shares will be
distributed on the anniversary date of this award based on the Recipient’s satisfactory
performance of his or her job and the Corporation’s attainment of an earnings-based
performance standard. For the first year of this award, the performance standard will be
based on achieving 100% or more of the Return on Equity of a defined peer group of bank
holding companies, herein defined (adjusting for the difference between the Corporation’s
and the peer group’s equity to asset ratios), for the four consecutive calendar quarters
ending with the third quarter of each calendar year following the Award Date, until all
Restricted Shares awarded herewith are distributed. If all the Restricted Shares awarded
by this agreement are not distributed within the ten (10) year period following the date of
this Agreement, they shall expire and revert back to the Corporation. No partial shares
may be released, thus an amount equal to the next whole share amount will be released
subject to the specified performance criteria at each anniversary. The
 shares released may be in certificate form, or may be directed to be held in a custodial
account designated by the Recipient. The peer group of holding companies to be used for this
award is as follows:




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Bank Holding Company




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







	 	 	 	The Committee reserves the right to change the composition of the peer group, as well as the
method of evaluating the Corporation’s earnings performance as compared to the peer group,
based on mergers or acquisitions involving members of the peer group, changes in size of the
Corporation or members of the peer group, or other factors deemed appropriate by the
Committee.
	 
	 	5.	 	Terms of Forfeiture. If a Recipient’s employment with the Corporation, or a
subsidiary, ceases for any reason prior to the lapse of the restrictions, conditions or
terms applicable to his or her Restricted Stock, all of the Recipient’s Restricted Stock
still subject to unexpired restrictions, conditions or terms shall be forfeited absolutely
by the Recipient to the Corporation without payment or delivery of any consideration or
other thing of value by the Corporation or its affiliates, and thereupon and thereafter
neither the Recipient nor his or her heirs, personal or legal representatives, successors,
assigns, beneficiaries, or any claimants under the Recipient’s Last Will or laws of descent
and distribution, shall have any rights or claims to or interests in the forfeited
Restricted Stock or any certificates representing shares thereof, or claims against the
Corporation or its affiliates with respect thereto. Except in the case of disability,
employment ceases with the Corporation, or its Subsidiary, on the day the Recipient’s
employment is terminated with or without cause, or on their date of death. In the event of
disability, the Recipient’s employment is considered terminated on the date for which the
Recipient receives the final payment of the Corporation’s, or Subsidiary’s, short-term
disability.
	 
	 	6.	 	Non-Transferability of Restricted Stock. The Restricted Stock and this Restricted
Stock Agreement shall not be transferable.
	 
	 	7.	 	Change in Control. If any of the change in control events described in Section 11 of
the Plan occur, all shares of Restricted Stock shall fully vest and all restrictions on the
            shares of Restricted Stock shall lapse as follows: In the case of an event specified in
clause (a) of the second sentence of the third paragraph of Section 11, the lapse of all
restrictions on the shares of Restricted Stock shall occur immediately prior to the
consummation of the described transaction and, in the case of an event specified in clause
(b) or (c) of said sentence, the full vesting and lapse of restrictions shall occur upon
occurrence of the described event.
	 
	 	8.	 	Notices. Any notice required or permitted under this Restricted Stock Agreement shall
be deemed given when delivered personally, or when deposited in a United States Post
Office, postage prepaid, addressed, as appropriate, to the Recipient either at his or her
address herein above set forth or such other address as he or she may designate in writing
to the Corporation.
	 
	 	9.	 	Failure to Enforce Not a Waiver. The failure of the Corporation to enforce at any time
any provision of this Restricted Stock Agreement shall in no way be construed to be a
waiver of such provision or of any other provision hereof.
	 
	 	10.	 	Governing Law. This Restricted Stock Agreement shall be governed by and construed
according to the laws of the State of Pennsylvania.
	 
	 	11.	 	Incorporation of Plan. The Plan is hereby incorporated by reference and made a part
hereof, and the Restricted Stock and this Restricted Stock Agreement are subject to all
terms and conditions of the Plan.
	 
	 	12.	 	Amendments. This Option Agreement may be amended or modified at any time by an
instrument in writing signed by the parties hereto, provided that no such amendment or
modification shall be made which would cause the Restricted Stock to fail to continue to
qualify as “incentive restricted stock.”




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




	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 	 	 	Craig G. Litchfield, Chairman, President & CEO
	 
	 	 	 	 	 	 
	 	 	The undersigned hereby accepts and agrees to all the terms and
provisions of the foregoing Restricted Stock Agreement and to all
the terms and provisions of the Citizens & Northern Corporation
1995 Stock Incentive Plan herein incorporated by reference.
	 
	 	 	 	 	 	 
	 	 	 
	 

	 	 	 	Recipient —	 	 
	 

	 	 	 	 	 	 





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