Exhibit 10.2

                        HARLEYSVILLE NATIONAL CORPORATION
            1998 INDEPENDENT DIRECTORS STOCK OPTION PLAN, AS AMENDED


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                        HARLEYSVILLE NATIONAL CORPORATION

                  1998 INDEPENDENT DIRECTORS STOCK OPTION PLAN
                                  (AS AMENDED)

     1. Purpose. The 1998 Independent Directors Stock Option Plan (the "Plan")
was established to advance the development, growth and financial condition of
Harleysville National Corporation (the "corporation") and its subsidiaries, by
providing an incentive, through participation in the appreciation of the capital
stock of the corporation, and thereby securing, retaining and motivating members
of the corporation's Board of Directors who are not officers or employees of the
corporation or any subsidiary thereof (the "non-employee directors").

     2. Term. The Plan shall become effective as of the date it is adopted by
the corporation's Board of Directors (the "Board"), and shall be presented for
approval at the next meeting of the corporation's shareholders. Any and all
options awarded under the Plan before it is approved by the corporation's
shareholders shall be conditioned upon, and may not be exercised before, receipt
of shareholder approval, and shall lapse upon failure to receive such approval.
Unless previously terminated by the Board, the Plan shall terminate on, and no
options shall be granted after, the tenth anniversary of the effective date of
the Plan.

     3. Stock. The shares of the corporation's common stock (the "common stock")
issuable under the Plan have been increased by 75,000 shares and shall not
exceed 150,000 shares in the aggregate, adjusted pursuant to Section 10 below.
The common stock issuable hereunder may be either authorized and unissued shares
of common stock, or authorized shares of common stock issued by the corporation
and subsequently reacquired by it as treasury stock, or shares purchased in open
market transactions. Under no circumstances shall fractional shares be issued
under the Plan. The corporation's failure to obtain any governmental authority
deemed necessary by the corporation's legal counsel for the proper grant of the
stock options under this Plan and/or the issuance of common stock under the Plan
shall relieve the corporation of any duty or liability for the failure to grant
stock options under the Plan and/or issue common stock under the Plan as to
which such authority has not been obtained.

     4. Stock Options. Stock options shall be granted and awarded under the Plan
to each non-employee director of the corporation who is a member of the
corporation's Board of Directors on the grant dates as follows:

          3,750 shares of Common Stock ("Stock Options") shall be granted and
     awarded to each non-employee director at the first organizational meeting
     of the Board of Directors immediately following the 1999 Annual Meeting of
     Shareholders; and

          3,750 shares of Common Stock Options shall be granted and awarded to
     each non-employee director on the first business day of January in 2000;
     and

          500 shares of Common Stock Options shall be granted and awarded to
     each non-employee director on the first business day of January in 2001;
     and

          2,000 shares of Common Stock Options shall be granted and awarded
     annually to each non-employee director on the first business day of
     January, 2002, and each succeeding year thereafter; and


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          15,500 shares are reserved to secure new directors

under the following terms and conditions:

          (a) The time period during which any Stock Option is exercisable shall
     be ten (10) years after the date of grant.

          (b) If a director, who has received an award pursuant to the Plan,
     ceases to be a member of the Board of Directors for any reason and is not
     designated as "Director Emeritus" by the remaining members of the Board of
     Directors at the time of such cessation, then the director may exercise the
     Stock Option not more than twelve (12) months after such cessation. If
     named Director Emeritus, then such Director Emeritus may exercise his or
     her Stock Options for the remaining term. If a director, who has received
     an award pursuant to the Plan dies, the director's qualified personal
     representative, or any person who acquires a Stock Option pursuant to the
     director's Will or the laws of descent and distribution, may exercise such
     Stock Option during its remaining term for a period of not more than twelve
     (12) months after the director's death to the extent that the Stock Option
     would then be and remains exercisable.

          (c) The purchase price of a share of common stock subject to a Stock
     Option shall be the fair market value of the common stock on the date of
     grant, as determined under Section 6 hereof.

          (d) The Stock Option shall be made by a written agreement in the form,
     attached hereto as Exhibit "A," with such changes therein as may be
     determined by the Committee (as such terra is defined in Section 12 hereof)
     (the "Stock Option Agreement").

     5. Exercise. Except as otherwise provided in the Plan, a Stock Option may
be exercised in whole or in part by giving written notice thereof to the
Secretary of the corporation, or his/her designee, identifying the Stock Option
being exercised, the number of shares of common stock with respect thereto, and
other information pertinent to the exercise of the Stock Option. The purchase
price of the shares of common stock with respect to which a Stock Option is
exercised shall be paid with the written notice of exercise, either in cash or
in common stock, including common stock issuable hereunder, at its then current
fair market value, or any combination of cash or common stock. Funds received by
the corporation from the exercise of any Stock Option shall be used for its
general corporate purposes. The number of shares of common stock subject to a
Stock Option shall be reduced by the number of shares of common stock with
respect to which the director has exercised rights under the related Stock
Option Agreement.

     If the corporation or its shareholders 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 shareholders 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


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it the corporation or otherwise) immediately after the consummation of such
transaction, thereupon any and all outstanding Stock Options shall immediately
become exercisable until the consummation of such transaction, or if not
consummated, until the agreement therefor expires or is terminated, in which
case thereafter all Stock Options shall be treated as if the agreement never had
been executed. If during any period of two (2) consecutive years, the
individuals, who at the beginning of such period, constituted the Board of
Directors, cease for any reason to constitute at least a majority of the Board
of Directors (unless the election of each director of the Board of Directors,
who was not a director of the Board of Directors 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 outstanding Stock Options shall immediately become exercisable. If
there is an actual, attempted or threatened change in the ownership of at least
twenty-five percent (25%) of any class of voting stock of the corporation
through the acquisition of, or an offer to acquire, such percentage of the
corporation's voting 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 of Directors, thereupon any and all outstanding Stock
Options shall immediately become exercisable.

     6. Value. Where used in the Plan, the "fair market value" of Stock or any
options or rights with respect thereto, including Awards, shall mean and be
determined by (a) the average of the highest and lowest reported sales prices
thereof on the principal established domestic securities exchange on which
listed, and if not listed, then (b) the average of the "bid" and "ask" prices
thereof on the over-the-counter market, as reported by the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), in either case as
of the specified or otherwise required or relevant time, or if not traded as of
such specified, required or relevant time, then based upon such reported sales
or "bid" and "ask" prices before and/or after such time in accordance with
pertinent provisions of and principles under the Code and the regulations
promulgated thereunder.

     7. Continued Relationship. Nothing in the Plan or in any Stock Option shall
confer upon any director any right to continue his relationship with the
corporation as a director, or limit or affect any rights, powers or privileges
that the corporation or its affiliates may have to supervise, discipline and
terminate such director, and the relationships thereof.

     8. General Restrictions. The Board of Directors may require, in its
discretion, (a) the listing, registration or qualification of the common stock
issuable pursuant to the Plan on any securities exchange or under any federal or
state securities or other laws, (b) the approval of any governmental authority,
or (c) an execution of an agreement by any director with respect to disposition
of any common stock (including, without limitation, that at the time of the
director's exercise of the Stock Option, any common stock thereby acquired is
being and will be acquired solely for investment purposes and without any
intention to sell or distribute the common stock). If the Board of Directors so
requires, then Stock Options shall not be exercised, in whole or in part, unless
such listing, registration, qualification, approval or agreement has been
appropriately effected or obtained to the satisfaction of the Board of Directors
and legal counsel for the corporation. Notwithstanding anything to the contrary
herein, a director shall not sell, transfer or otherwise dispose of any shares
of common stock acquired pursuant to a Stock option unless at least six (6)
months have elapsed from the date the Stock Option was granted and, in any
event, the transfer or disposition is made in accordance with Section 16 of the
Securities Exchange Act of 1934, as amended, and as the same may be amended from
time to time.


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     9. Rights. Except as otherwise provided in the Plan, a director shall have
no rights as a holder of the common stock subject to a Stock Option unless and
until one or more certificates for the shares of common stock are issued and
delivered to the director. No Stock Option, or the grant thereof, shall limit or
affect the right or power of the corporation or its affiliates to adjust,
reclassify, recapitalize, reorganize or otherwise change its or their capital or
business structure, or to merge, consolidate, dissolve, liquidate or sell any or
all of its or their business, property or assets.

     10. Adjustments. In the event that the shares of common stock of the
corporation, as presently constituted, shall be changed into or exchanged for a
different number or kind of shares of common stock or other securities of the
corporation or of another corporation (whether by reason of merger,
consolidation, recapitalization, reclassification, split-up, combination of
shares or otherwise) or if the number of such shares of common stock shall be
increased through the payment of a stock dividend, stock split or similar
transaction, then, there shall be substituted for or added to each share of
common stock of the corporation that was theretofore appropriated, or that
thereafter may become subject to a Stock Option under the Plan, the number and
kind of shares of common stock or other securities into which each outstanding
share of the common stock of the corporation shall be so changed or for which
each such share shall be exchanged or to which each share shall be entitled, as
the case may be. Each outstanding Stock Option shall be appropriately amended as
to price and other terms, as may be necessary to reflect the foregoing events.

         If there shall be any other change in the number or kind of the
outstanding shares of common stock of the corporation, or of any common stock or
other securities into which such common stock shall have been changed, or for
which it shall have been exchanged, and if a majority of the members of the
Board of Directors shall, in their sole discretion, determine that the change
equitably requires an adjustment in any Stock Option that was theretofore
granted or that may thereafter be granted under the Plan, then such adjustment
shall be made in accordance with the determination.

     The grant of a Stock Option pursuant to the Plan shall not affect, in any
way, the right or power of the corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge, to consolidate, to dissolve, to liquidate or to sell or
transfer all or any part of its business or assets.

     Fractional shares resulting from any adjustment in a Stock Option pursuant
to this Section 10 may be settled as a majority of the members of the Board of
Directors or of the Committee, as the case may be, shall determine.

     To the extent that the foregoing adjustments relate to common stock or
securities of the corporation, such adjustments shall be made by a majority of
the members of the Board of Directors or of the Committee, as the case may be,
whose determination in that respect shall be final, binding and conclusive.
Notice of any adjustment shall be given by the corporation to each holder of a
Stock Option that is so adjusted.


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     11. Forfeiture. Notwithstanding anything to the contrary in this Plan, if
an option holder is engaged in fraud, embezzlement, theft, commission of a
felony, or dishonesty in the course of his relationship with the corporation or
its affiliates, or has disclosed trade secrets of the corporation or its
affiliates, the option holder shall forfeit all rights under and to all
unexercised Stock Options, and all exercised Stock Options for which the
corporation has not yet delivered certificates for shares of common stock, and
all rights to receive Stock Options shall be automatically canceled.

     12. Administration. The ability to control and manage the operation and
administration of the Plan shall be vested in the Board of Directors or in a
committee of two or more members of the Board of Directors selected by the Board
of Directors (the "Committee"). The Committee shall have the authority and
discretion to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of any
agreements made pursuant to the Plan, and to make any and all determinations
that may be necessary or advisable for the administration of the Plan. Any
interpretation of the Plan by the Committee and any decision made by it under
the Plan is final and binding.

     13. Miscellaneous. Any reference contained in this Plan to a particular
section or provision of law, rule or regulation shall include any subsequently
enacted or promulgated section or provision of law, rule or regulation, as the
case may be. With respect to persons subject to Section 16 of the Securities
Exchange Act of 1934, as amended, transactions under this Plan are intended to
comply with all applicable conditions of the Rule and the regulations
promulgated thereunder or any successor rule that may be promulgated by the
Securities and Exchange Commission. To the extent any provision of this Plan
fails to so comply, it shall be deemed null and void, to the extent permitted by
applicable law, subject to the provisions of Section 15, below. Where used in
this Plan, the plural shall include the singular, and, unless the context
otherwise clearly requires, the singular shall include the plural and the
masculine shall include the feminine. The captions of the numbered Sections
contained in this Plan are for convenience only, and shall not limit or affect
the meaning, interpretation or construction of any of the provisions of the
Plan.

     14. Transferability. Except as otherwise provided by the Board of
Directors, Stock Options granted under the Plan are not transferable except as
designated by the participant by Will and the laws of descent and distribution.

     15. Amendment. The Plan may be amended, suspended or terminated, without
notice, by a majority vote of the Board of Directors of the corporation.

     16. Taxes. The issuance of shares of common stock under the Plan shall be
subject to any applicable taxes or other laws or regulations of the United
States of America and any state or local authority having jurisdiction there
over.


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