CITIZENS & NORTHERN CORPORATION


 


INDEPENDENT DIRECTORS STOCK INCENTIVE
PLAN


 


STOCK OPTION AGREEMENT 


 


A
STOCK OPTION for a total of Six Hundred Forty-Six (646) shares of common stock, par value $1.00, of Citizens
& Northern Corporation, a Pennsylvania business corporation (herein the “Corporation”) is hereby granted as of
January 3, 2014 to  «Account_Name_» (herein
the “Director”), subject in all respects to the terms and provisions of Citizens & Northern Corporation Independent
Stock Incentive Plan (herein the “Plan”), dated April 15, 2008, which has been adopted by the Corporation’s shareholders
and which is incorporated herein by reference. The option price as determined under paragraph 8 of the Plan is Twenty and
45/100 ($20.45) Dollars per share. The option is fully vested.


 


This Option may not
be exercised more than ten (10) years from the date of its grant, and may be exercised during such term only in accordance with
the terms of the Plan.


 


RESTRICTED STOCK AGREEMENT


 


A
total of One Hundred Eight (108) shares of RESTRICTED common STOCK, par value $1.00,
of Citizens & Northern Corporation, a Pennsylvania business corporation (herein the “Corporation”) is hereby awarded
as of January 3, 2014 to  «Account_Name_»
(herein the “Director”), subject in all respects to the terms and provisions of Citizens & Northern Corporation
Independent Stock Incentive Plan (herein the “Plan”), dated April 15, 2008, which has been adopted by the Corporation’s
shareholders and which is incorporated herein by reference. 


 


These shares cannot
be sold, exchanged, transferred, pledged or otherwise disposed of, except in accordance with the Plan. These transferability restrictions
will lapse as follows: 36 shares on January 3, 2015; 36 shares on January 3, 2016; and 36 shares on January 3, 2017.


 


Provisions Applicable To Both Stock
Option And 


Restricted Stock Agreements


 


All Awards (Options
and Restricted Stock) issued under the Plan which have not fully vested (i.e., continue to have restrictions that have not lapsed)
shall automatically fully vest (i.e., all restrictions shall lapse) upon a change in control event as follows:


 


(a) If the Corporation or its
stockholders execute an agreement to dispose of all or substantially all of the Corporation’s assets or capital stock by
means of sale, merger, consolidation, reorganization, liquidation or otherwise, as a result of which the Corporation’s stockholders
as of immediately before such transaction will not own at least fifty percent (50%) of the total combined voting power of all classes
of voting capital stock of the surviving entity (be it the Corporation or otherwise) immediately after the consummation of such
transaction, thereupon any and all Awards immediately shall become and remain exercisable with respect to the total number of shares
of Stock still subject thereto for the remainder of their respective terms until the consummation of such transaction, or if not
consummated, until the agreement therefore expires or is terminated, in which case thereafter all Awards shall be treated as if
said agreement never had been executed; (b) if there is an actual, attempted or threatened change in the ownership of at least
twenty-five percent (25%) of all classes of voting capital stock of the Corporation through the acquisition of, or an offer to
acquire such percentage of the Corporation’s voting capital stock by any person or entity, or persons or entities acting
in concert or as a group, and such acquisition or offer has not been duly approved by the Board; or (c) if during any period of
two (2) consecutive years, the individuals who at the beginning of such period constituted the Board, cease for any reason to constitute
at least a majority of the Board, unless the election of each director of the Board, who was not a director of the Board at the
beginning of such period, was approved by a vote of at least two-thirds of the directors then still in office who were directors
at the beginning of such period, thereupon any and all Awards immediately shall become and remain exercisable with respect to the
total number of shares of Stock still subject thereto for the remainder of their respective terms.


 




    	 



    	 



    

 


In the
case of an event specified in clause (a) of the foregoing sentence, the full lapse of any restrictions on shares of Restricted
Stock shall occur immediately prior to the consummation of the described transaction and any Options that vest as a result of execution
of the described agreement shall remain fully vested upon consummation thereof; and in the case of an event specified in clause
(b) or (c) of the foregoing sentence, the full vesting and lapse shall occur upon occurrence of the described event.


 


Dated: January 3, 2014


	 	 	CITIZENS & NORTHERN CORPORATION
	 	 	 	 	 
	 	 	 	BY	/s/ Charles H. Updegraff,
    Jr.
	ATTEST:	 	 	Charles H. Updegraff, Jr.
	 	 	 	Chairman, President & Chief Executive Officer
	/s/ Jessica R. Brown	 	 	 	 
	Jessica R. Brown	 	 	 	 
	Corporate Secretary	 	 	 	 


 


The Director acknowledges
receipt of a copy of the Plan, and represents that he or she is familiar with the terms and provisions thereof. The Director hereby
accepts this Option and Award subject to all the terms and provisions of the Plan.


 


Dated: ____________________


 


	 	 	 
	 	 «Account_Name_», Director