Document:

Exhibit 10.4

                        HARLEYSVILLE NATIONAL CORPORATION
           2004 OMNIBUS STOCK INCENTIVE PLAN, AS AMENDED AND RESTATED

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                        HARLEYSVILLE NATIONAL CORPORATION

                        2004 OMNIBUS STOCK INCENTIVE PLAN
                (amended and restated effective November 9, 2006)

     1. Purpose.  This amended and restated 2004 Omnibus  Stock  Incentive  Plan
(the "Plan")  amends and  restates,  in its  entirety,  the 2004  Omnibus  Stock
Incentive  Plan. The purpose of the Plan is to advance the  development,  growth
and financial condition of Harleysville National Corporation (the "Corporation")
and each subsidiary  thereof,  as defined in Section 424 of the Internal Revenue
Code  of  1986,  as  amended  (the  "Code"),  by  providing  incentives  through
participation  in the  appreciation  of the common stock of the  Corporation  to
secure,  retain and motivate  directors and personnel who may be responsible for
the  operation  and for  management  of the affairs of the  Corporation  and any
subsidiary now or hereafter existing ("Subsidiary").

     2. Term. The Plan originally  became effective as of February 12, 2004 (the
"effective  date"),  the  date it was  adopted  by the  Corporation's  Board  of
Directors (the "Board"),  and was approved by the Corporation's  shareholders at
the  Corporation's  annual  meeting of  shareholders  held April 13,  2004.  The
amendments reflected in this amended and restated Plan shall become effective as
of the date this amended and restated Plan is approved by the Board. Any and all
options and rights awarded under the Plan (the  "Awards")  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.  Shares of the Corporation's  common stock (the "Stock") that may
be issued under the Plan shall not exceed,  in the aggregate,  1,000,000 shares,
as may  be  adjusted  pursuant  to  Section  19  hereof.  Shares  may be  either
authorized and unissued shares,  authorized  shares,  issued by and subsequently
reacquired by the Corporation as treasury stock or shares  purchased in the open
market.  Under no circumstances shall any fractional shares be awarded under the
Plan.  Except as may be otherwise  provided in the Plan, any Stock subject to an
Award that, for any reason, lapses or terminates prior to exercise,  shall again
become  available  for grant  under the Plan.  While the Plan is in effect,  the
Corporation  shall  reserve  and keep  available  the  number of shares of Stock
needed to satisfy the requirements of the Plan. The Corporation  shall apply for
any  requisite  governmental  authority  to issue  shares  under the  Plan.  The
Corporation's  failure  to  obtain  any  such  governmental  authority,   deemed
necessary by the Corporation's legal counsel for the lawful issuance and sale of
Stock under the Plan,  shall relieve the  Corporation of any duty, or liability,
for the failure to issue or sell the Stock.

     4.  Administration.  The  ability to control and manage the  operation  and
administration of the Plan shall be vested in the Board or in a committee of two
or more  members of the Board,  selected  by the Board  (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 interpretations of the Plan by the Committee
and any decisions made by the Committee under the Plan are final and binding.

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     The Committee shall be responsible and shall have full,  absolute and final
power of  authority to determine  what,  to whom,  when and under what facts and
circumstances  Awards shall be made,  the form,  number,  terms,  conditions and
duration thereof,  including but not limited to when exercisable,  the number of
shares  of  Stock  subject  thereto,  and  the  stock  option  exercise  prices.
Notwithstanding the foregoing, however, the Committee shall not set the exercise
price of any stock  option at any price other than the closing  market  price of
the  Stock on the date of  grant  unless  (i) the  Board  of  Directors,  in the
exercise of its discretion under Section 14, shall have approved the methodology
of establishing  the exercise price,  and (ii) the Committee or the Board, at or
prior to the time the grant is  approved,  shall  also have  approved  a written
description  of the rationale  and  methodology  by which the exercise  price is
being  determined.  The  Committee  shall  make  all  other  determinations  and
decisions,  take all actions and do all things  necessary or  appropriate in and
for the  administration  of the Plan. No member of the Committee or of the Board
shall be liable for any decision,  determination or action made or taken in good
faith by such person under or with respect to the Plan or its administration.

     5. Awards. Awards may be made under the Plan in the form of: (a) "Qualified
Options"  to  purchase  Stock,  which are  intended  to qualify  for certain tax
treatment as incentive stock options under Sections 421 and 422 of the Code, (b)
"Non-Qualified  Options" to purchase  Stock,  which are not  intended to qualify
under  Sections  421  through  424 of the Code,  (c) Stock  Appreciation  Rights
("SARs"),  or (d)  "Restricted  Stock." More than one Award may be granted to an
eligible  person,  and the grant of any Award  shall not  prohibit  the grant of
another Award, either to the same person or otherwise,  or impose any obligation
to exercise on the participant.  All Awards and the terms and conditions thereof
shall be set forth in written  agreements,  in such form and content as approved
by the Committee  from time to time,  and shall be subject to the  provisions of
the Plan whether or not  contained  in such  agreements.  Multiple  Awards for a
particular  person may be set forth in a single written agreement or in multiple
agreements,  as determined by the Committee, but in all cases each agreement for
one or more Awards shall  identify each of the Awards  thereby  represented as a
Qualified Option,  Non-Qualified  Option, Stock Appreciation Right or Restricted
Stock, as the case may be.

     The  aggregate  number  of  shares  of  Stock  that may be  represented  by
Qualified Options, Non-Qualified Options and SARs granted to any employee of the
Corporation  or a Subsidiary  during any calendar  year shall not exceed  50,000
Shares  (whether  such  Awards may be settled in shares of Stock,  cash,  or any
combination thereof).

     6. Eligibility.  Persons eligible to receive Awards shall be the directors,
key officers and other employees of the Corporation and of each  Subsidiary,  as
determined by the Committee;  except,  however, that non-employee  directors may
not receive Qualified Options. A person's  eligibility to receive an Award shall
not confer  upon him or her any right to receive an Award.  Except as  otherwise
provided, a person's eligibility to receive, or actual receipt of an Award under
the Plan shall not limit or affect his or her benefits  under or  eligibility to
participate in any other incentive or benefit plan or program of the Corporation
or any of its affiliates.

     7. Qualified  Options.  In addition to other  applicable  provisions of the
Plan, all Qualified Options and Awards thereof shall be under and subject to the
following terms and conditions:

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          (a) The  maximum  number  of  shares  of Stock  that may be  issued by
options intended to be Qualified Options shall be 1,000,000 shares;

          (b) No  Qualified  Option  shall be  awarded  more than ten (10) years
after the date the Plan is adopted by the Board or the date the Plan is approved
by the Corporation's shareholders, whichever is earlier;

          (c) The time period during which any Qualified  Option is exercisable,
as determined by the Committee,  shall not commence before the expiration of six
(6) months or continue  beyond the  expiration  of ten (10) years after the date
the Qualified Option is awarded;

          (d) If a participant, who was awarded a Qualified Option, ceases to be
employed by the  Corporation  or any Subsidiary for any reason other than his or
her death,  the Committee may permit the participant  thereafter to exercise the
option during its remaining  term for a period of not more than three (3) months
after  cessation of employment to the extent that the Qualified  Option was then
and  remains  exercisable,  unless  such  employment  cessation  was  due to the
participant's  disability,  as defined in Section 22(e)(3) of the Code, in which
case the three (3) month period shall be twelve (12) months;  if the participant
dies while employed by the Corporation or a Subsidiary, the Committee may permit
the participant's qualified personal representatives, or any persons who acquire
the  Qualified  Option  pursuant  to his or her  Will  or laws  of  descent  and
distribution,  to exercise the Qualified  Option during its remaining term for a
period of not more than twelve (12) months after the participant's  death to the
extent that the Qualified Option was then and remains exercisable; the Committee
may impose terms and conditions upon and for the exercise of a Qualified  Option
after the cessation of the participant's employment or his or her death;

          (e) The purchase price of Stock subject to any Qualified  Option shall
not be less than the Stock's fair market value at the time the Qualified  Option
is awarded and shall not be less than the Stock's par value; and

          (f) Qualified Options may not be sold,  transferred or assigned by the
participant,  except as  determined  by the  Committee or as  designated  by the
participant by will and the laws of descent and distribution.

     8. Non-Qualified Options. In addition to other applicable provisions of the
Plan, all Non-Qualified Options and Awards thereof shall be under and subject to
the following terms and conditions:

          (a)  The  time  period  during  which  any  Non-Qualified   Option  is
exercisable  shall not  commence  before  the  expiration  of six (6)  months or
continue beyond the expiration often (10) years after the date the Non-Qualified
Option is awarded;

          (b) If a participant,  who was awarded a Non-Qualified  Option, ceases
to be eligible under the Plan, before lapse or full exercise of the option,  the
Committee may permit the participant to exercise the option during its remaining
term,  to the extent  that the option was then and remains  exercisable,  or for
such time period and under such terms and conditions as may be prescribed by the
Committee;

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          (c)  The  purchase   price  of  a  share  of  Stock   subject  to  any
Non-Qualified Option shall not be less than the Stock's par value; and

          (d) Except as otherwise provided by the Committee, Non-Qualified Stock
Options granted under the Plan are not transferable, except as determined by the
Committee or as  designated by the  participant  by Will and the laws of descent
and distribution.

     9. Stock Appreciation Rights. In addition to other applicable provisions of
the  Plan,  all SARs and  Awards  thereof  shall be  under  and  subject  to the
following terms and conditions:

          (a) SARs may be granted  either alone,  or in connection  with another
previously or contemporaneously  granted Award (other than another SAR) so as to
operate in tandem  therewith  by having the  exercise of one affect the right to
exercise the other,  as and when the Committee may  determine;  however,  no SAR
shall be awarded in connection with a Qualified  Option more than ten (10) years
after the date the Plan is adopted by the Board or the date the Plan is approved
by the Corporation's stockholders, whichever date is earlier;

          (b) Each SAR shall entitle the participant to receive upon exercise of
the SAR all or a portion of the excess of (i) the fair market  value at the time
of such  exercise of a specified  number of shares of Stock as determined by the
Committee,  over (ii) a specified  price as  determined by the Committee of such
number of  shares of Stock  that,  on a per  share  basis,  is not less than the
Stock's  fair  market  value at the time  the SAR is  awarded,  or if the SAR is
connected with another Award, such lesser percentage of the Stock purchase price
thereunder as may be determined by the Committee;

          (c) Upon exercise of any SAR, the participant  shall be paid either in
cash  or in  Stock,  or in  any  combination  thereof,  as the  Committee  shall
determine;  if such payment is to be made in Stock, the number of shares thereof
to be issued pursuant to the exercise shall be determined by dividing the amount
payable upon exercise by the Stock's fair market value at the time of exercise;

          (d) The time period during which any SAR is exercisable, as determined
by the  Committee,  shall not commence  before the  expiration of six (6) months
after the date the SAR is awarded;  however, no SAR connected with another Award
shall be exercisable beyond the last date that such other connected Award may be
exercised;

          (e) If a participant holding a SAR, before its lapse or full exercise,
ceases to be eligible under the Plan,  the Committee may permit the  participant
thereafter to exercise  such SAR during its  remaining  term, to the extent that
the SAR was then and  remains  exercisable,  for such time period and under such
terms and conditions as may be prescribed by the Committee;

          (f) No SAR shall be awarded in connection  with any  Qualified  Option
unless the SAR (i) lapses no later than the  expiration  date of such  connected
Option,  (ii) is for not more than the  difference  between  the Stock  purchase
price under such connected  Option and the Stock's fair market value at the time
the SAR is  exercised,  (iii) is  transferable  only when and as such  connected
Option is transferable and under the same conditions, (iv) may be exercised only
when such connected Option may be exercised,  and (v) may be exercised only when
the  Stock's  fair market  value  exceeds  the Stock  purchase  price under such
connected Option.

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     10.  Restricted  Stock. In addition to other  applicable  provisions of the
Plan, all Restricted  Stock and Awards thereof shall be under and subject to the
following terms and conditions:

          (a)  Restricted  Stock  shall  consist  of shares of Stock that may be
acquired by and issued to a  participant  at such time,  for such or 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, substantial risks of
forfeiture  within the  meaning of Section  83 of the Code;  and  attainment  of
performance  or other goals,  objectives or standards,  all for or applicable to
such time periods as determined by the Committee;

          (b) Except as otherwise  provided in the Plan or the Restricted  Stock
Award,  a  participant  holding  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 Award;

          (c) Each  certificate  issued 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  2004 Omnibus  Stock
          Incentive Plan and a certain agreement entered into between the holder
          and  the  Corporation  pursuant  to the  Plan.  The  release  of  this
          Certificate  and the  shares  of Stock  hereby  represented  from such
          provisions  shall occur only as provided by the 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 the Restricted Stock, a certificate for the shares of Stock free
of restrictions and without the legend shall be issued to the participant;

          (d) If a participant'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  participant's
Restricted  Stock still subject to unexpired  restrictions,  conditions or terms
shall be forfeited  absolutely by the  participant  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
participant nor his or her heirs, personal or legal representatives, successors,
assigns, beneficiaries, or any claimants under the participant's 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.

     11.  Exercise.  Except as  otherwise  provided  in the Plan,  Awards may be
exercised in whole or in part by giving  written notice thereof to the Secretary

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of the  Corporation,  or  his  or her  designee,  identifying  the  Award  to be
exercised,  the  number of  shares  of Stock  with  respect  thereto,  and other
information pertinent to exercise of the Award. The purchase price of the shares
of Stock  with  respect  to which an Award is  exercised  shall be paid with the
written notice of exercise,  either in cash or in securities of the Corporation,
including securities issuable hereunder,  at its then current fair market value,
or in any combination thereof, as the Committee shall determine.  Funds received
by the Corporation  from the exercise of any Award shall be used for its general
corporate purposes.

     The number of shares of Stock  subject to an Award  shall be reduced by the
number of shares of Stock with respect to which the  participant  has  exercised
rights under the Award.  If a SAR is awarded in connection  with another  Award,
the number of shares of Stock that may be acquired by the participant  under the
other  connected  Award  shall be  reduced by the number of shares of Stock with
respect to which the participant has exercised his or her SAR, and the number of
shares of Stock subject to the  participant's SAR shall be reduced by the number
of shares of Stock acquired by the  participant  pursuant to the other connected
Award.

     The Committee may permit an acceleration of previously established exercise
terms of any Awards as, when, under such facts and circumstances, and subject to
such other or further  requirements  and  conditions  as the  Committee may deem
necessary or appropriate.

     In addition:

          (a) if the  Corporation  or its  shareholders  execute an agreement to
dispose  of all or  substantially  all of the  Corporation's  assets or stock by
means of sale, merger, consolidation,  reorganization, liquidation or otherwise,
as a result of which the  Corporation's  shareholders,  immediately  before  the
transaction,  will not own at least fifty  percent  (50%) of the total  combined
voting power of all classes of voting stock of the  surviving  entity (be it the
Corporation or otherwise) immediately after the consummation of the transaction,
then  any and  all  outstanding  Awards  shall  immediately  become  and  remain
exercisable  or, if the  transaction  is not  consummated,  until the  agreement
relating to the transaction expires or is terminated,  in which case, all Awards
shall be treated as if the agreement was never executed; or

          (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 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,  then any and all outstanding  Awards shall
immediately become and remain exercisable.

     12. Right of First Refusal. Each written agreement for an Award may contain
a provision  that requires as a condition to exercising a Qualified  Option or a
Non Qualified Option that the participant  agree prior to selling,  transferring
or otherwise  disposing of any shares of Stock obtained  through the exercise of
the Award to first offer the shares of Stock to the  Corporation  for  purchase.
The terms and  conditions  of such right of first refusal shall be determined by
the  Committee in its sole and absolute  discretion,  provided that the purchase
price  shall be at least equal to the Stock's  fair market  value as  determined
under  paragraph 14 below,  and shall be subject to all  applicable  federal and
state laws, rules and regulations.

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     13.  Withholding.  When a  participant  exercises  a stock  option or Stock
Appreciation  Right awarded under the Plan, the  Corporation,  in its discretion
and as required by law, may require the  participant to remit to the Corporation
an  amount   sufficient   to  satisfy   fully  any  federal,   state  and  other
jurisdictions'  income  and  other  tax  withholding  requirements  prior to the
delivery of any certificates for shares of Stock. At the Committee's discretion,
remittance may be made in cash, shares already held by the participant or by the
withholding by the  Corporation of sufficient  shares  issuable  pursuant to the
option to satisfy the participant's withholding obligation.

     14. 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  at the  discretion  of the  Board  of  Directors  if more  than  one
valuation method is available to the Corporation, by:

          (a) the  closing  market  price  as of the  date  of  grant  or  other
determination (for purposes of this Plan,  "closing market price" shall mean the
price at which the Stock was last sold in the principal United States market for
the Stock as of the date for which the closing market price is determined);

          (b) the  average of the  highest  and  lowest  reported  sales  prices
thereof on the  principal  established  domestic  securities  exchange  on which
listed; or

          (c) if not listed,  then by the average of the dealer  "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.

     15.  Amendment.  To the extent  permitted by applicable  law, the Board may
amend,  suspend, or terminate the Plan at any time. The amendment or termination
of this Plan shall not, without the consent of the participants, alter or impair
any rights or obligations under any Award previously granted hereunder.

     From time to time, the Committee may rescind,  revise and add to any of the
terms,  conditions  and  provisions of the Plan or of an Award as necessary,  or
appropriate  to have the Plan and any Awards  thereunder be or remain  qualified
and in compliance  with all  applicable  laws,  rules and  regulations,  and the
Committee  may delete,  omit or waive any of the terms  conditions or provisions
that are no longer  required by reason of changes of applicable  laws,  rules or
regulations,  including  but not limited to, the  provisions of Sections 421 and
422 of the Code, Section 16 of the Securities  Exchange Act of 1934, as amended,
(the "1934 Act") and the rules and regulations promulgated by the Securities and
Exchange Commission.  Without limiting the generality of the preceding sentence,
each  Qualified  Option  shall be subject to such  other and  additional  terms,
conditions  and provisions as the Committee may deem necessary or appropriate in
order to qualify as a Qualified Option under Section 422 of the Code, including,
but not limited to, the following provisions:

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          (a) At the time a Qualified  Option is  awarded,  the  aggregate  fair
market  value of the Stock  subject  thereto  and of any Stock or other  capital
stock with respect to which  incentive stock options  qualifying  under Sections
421 and 422 of the Code are  exercisable  for the first time by the  participant
during any calendar  year under the Plan and any other plans of the  Corporation
or its affiliates, shall not exceed $100,000.00; and

          (b) No Qualified Option shall be awarded to any person if, at the time
of the Award, the person owns shares of the stock of the Corporation  possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the  Corporation or its affiliates,  unless,  at the time the Qualified
Option is awarded,  the exercise  price of the Qualified  Option is at least one
hundred and ten percent (110%) of the fair market value of the Stock on the date
of grant and the option,  by its terms, is not exercisable  after the expiration
of five (5) years from the date it is awarded.

     16.  Continued  Employment.  Nothing in the Plan or any Award shall  confer
upon any participant or other persons any right to continue in the employ of, or
maintain any particular relationship with, the Corporation or its affiliates, or
limit or affect any rights,  powers or privileges  that the  Corporation  or its
affiliates  may have to supervise,  discipline  and  terminate the  participant.
However,  the Committee may require,  as a condition of making and/or exercising
any Award, that a participant agree to, and in fact provide services,  either as
an employee or in another capacity,  to or for the Corporation or any Subsidiary
for such time period as the Committee may prescribe.  The immediately  preceding
sentence shall not apply to any Qualified Option, to the extent such application
would result in disqualification of the option under Sections 421 and 422 of the
Code.

     17. General  Restrictions.  If the Committee or Board determines that it is
necessary or desirable  to: (a) list,  register or qualify the Stock  subject to
the  Award,  or the Award  itself,  upon any  securities  exchange  or under any
federal or state  securities  or other  laws,  (b) obtain  the  approval  of any
governmental authority, or (c) enter into an agreement with the participant with
respect to disposition of any Stock (including, without limitation, an agreement
that, at the time of the participant's  exercise of the Award, any Stock thereby
acquired is and will be acquired solely for investment  purposes and without any
intention  to sell or  distribute  the  Stock),  then  such  Award  shall not be
consummated,   in  whole  or  in  part,   unless  the   listing,   registration,
qualification,  approval  or  agreement,  as the case may be,  shall  have  been
appropriately  effected or obtained to the  satisfaction  of the  Committee  and
legal counsel for the Corporation.

     18. Rights.  Except as otherwise  provided in the Plan,  participants shall
have  no  rights  as a  holder  of the  Stock  unless  and  until  one  or  more
certificates   for  the  shares  of  Stock  are  issued  and  delivered  to  the
participant.

     19.  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 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

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each share of common stock of the Corporation that was theretofore appropriated,
or which  thereafter  may become subject to an 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 such shares shall
be entitled,  as the case may be. Each outstanding  Award 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 the common stock of the  Corporation,  or of any common stock or other
securities in which such common stock shall have been  changed,  or for which it
shall have been exchanged, and if a majority of the disinterested members of the
Committee  shall, in its sole  discretion,  determine that such change equitably
requires an  adjustment  in any Award that was  theretofore  granted or that may
thereafter  be granted  under the Plan,  then such  adjustment  shall be made in
accordance with such determination.

     The grant of an Award  under 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 Awards pursuant to this
Section 19 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  or of the  Committee,  as the  case  may be,  whose
determination  in that  respect  shall be final,  binding  and  conclusive.  The
Corporation  shall give notice of any adjustment to each holder of an Award that
is so adjusted.

     20. Forfeiture.  Notwithstanding  anything to the contrary in this Plan, if
the Committee finds,  after full  consideration of the facts presented on behalf
of the Corporation and the involved participant, that he or she has been engaged
in fraud,  embezzlement,  theft,  commission  of a felony,  or dishonesty in the
course of his or her employment by the Corporation or by any Subsidiary and such
action has damaged the  Corporation  or the  Subsidiary,  as the case may be, or
that the  participant  has  disclosed  trade secrets of the  Corporation  or its
affiliates,   the  participant  shall  forfeit  all  rights  under  and  to  all
unexercised  Awards,  and  under and to all  exercised  Awards  under  which the
Corporation has not yet delivered  payment or  certificates  for shares of Stock
(as the case may be),  all of which  Awards  and rights  shall be  automatically
canceled.  The decision of the  Committee  as to the cause of the  participant's
discharge from  employment with the Corporation or any Subsidiary and the damage
thereby  suffered  shall be final for purposes of the Plan, but shall not affect
the finality of the participant's discharge by the Corporation or Subsidiary for
any other purposes.  The preceding  provisions of this paragraph shall not apply
to  any  Qualified  Option  to the  extent  such  application  would  result  in
disqualification  of the option as an incentive  stock option under Sections 421
and 422 of the Code.

                                       9

<PAGE>

     21. Indemnification. In and with respect to the administration of the Plan,
the  Corporation  shall  indemnify  each member of the  Committee  and/or of the
Board,  each of whom shall be  entitled,  without  further  action on his or her
part,  to  indemnification  from  the  Corporation  for  all  damages,   losses,
judgments, settlement amounts, punitive damages, excise taxes, fines, penalties,
costs  and  expenses   (including   without   limitation   attorneys'  fees  and
disbursements) incurred by the member in connection with any threatened, pending
or completed  action,  suit or other  proceedings of any nature,  whether civil,
administrative,  investigative  or criminal,  whether  formal or  informal,  and
whether by or in the right or name of the Corporation, any class of its security
holders, or otherwise,  in which the member may be or may have been involved, as
a party or  otherwise,  by reason of his or her being or having been a member of
the  Committee  and/or of the Board,  whether or not he or she continues to be a
member of the Committee or of the Board. The provisions, protection and benefits
of this  Section  shall  apply  and exist to the  fullest  extent  permitted  by
applicable  law to and for the benefit of all present and future  members of the
Committee  and/or of the Board and their  respective  heirs,  personal and legal
representatives,  successors  and assigns,  in addition to all other rights that
they may have as a matter of law, by contract,  or otherwise,  except (a) to the
extent there is entitlement  to insurance  proceeds  under  insurance  coverages
provided  by the  Corporation  on account of the same matter or  proceeding  for
which  indemnification  hereunder  is  claimed,  or (b) to the  extent  there is
entitlement  to  indemnification  from the  Corporation,  other  than under this
Section,  on account of the same matter or proceeding for which  indemnification
hereunder is claimed.

     22.  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.

     23. Miscellaneous.

          (a) Any  reference  contained in this Plan to a particular  section or
provision of law, rule or regulation,  including but not limited to the Code and
the 1934 Act, 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 1934 Act,  transactions under this Plan are
intended to comply with all  applicable  conditions  of Section 16 and the rules
and regulations promulgated  thereunder,  or any successor rules and regulations
that may be promulgated by the  Securities and Exchange  Commission,  and to the
extent any provision of this Plan or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent  permitted by applicable law and
deemed advisable by the Committee.

          (b) 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 term "affiliates"  shall mean each and every Subsidiary and
any parent of the Corporation.

          (c) 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.

                                       10Exhibit 10.5

                         EAST PENN FINANCIAL CORPORATION
                  1999 INDEPENDENT DIRECTORS STOCK OPTION PLAN

<PAGE>

                        EAST PENN FINANCIAL CORPORATION

                  1999 INDEPENDENT DIRECTORS STOCK OPTION PLAN

     1. Purpose. The 1999 Independent Directors Stock Option Plan (the "Plan")
is established to advance the development, growth and financial condition of
East Penn Financial 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 was adopted by East Penn Bank's Board of Directors and
became effective on April 25, 1999, was approved by East Penn Bank's
shareholders on May 18, 1999, and was assumed by the Corporation on July 1, 2003
in accordance with the Plan of Reorganization between the Corporation, East Penn
Bank, and East Penn Interim Bank dated February 27, 2003 and adopted by East
Penn Bank shareholders on May 22, 2003. Unless previously terminated by the
Corporation's Board of Directors (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 shall not exceed 120,000 shares. The amount of Common
Stock issuable under the Plan may be adjusted pursuant to Section 11 hereof. 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. Administration. The ability to control and manage the operation and
administration of the Plan shall be vested in the Board or in a committee of two
or more members of the Board, selected by the Board (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.

     5. Stock Options. Stock options shall be granted under the Plan to each
Non-employee Director of the Corporation, annually, at the organization meeting

<PAGE>

of the Board held immediately following the Corporation's annual meeting of
shareholders. Each Non-employee Director who is a member of the Board on the
grant date shall be awarded a stock option to purchase 1,000 shares of Common
Stock (the "Stock Option") 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 Non-employee Director, who has received an award pursuant to
     the Plan, ceases to be a member of the Board for any reason, then the
     Non-employee Director may exercise the Stock Option not more than twelve
     (12) months after such cessation. If a Non-employee Director, who has
     received an award pursuant to the Plan dies, the Non-employee Director's
     qualified personal representative, or any person who acquires a Stock
     Option pursuant to the Non-employee 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 Non-employee
     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 7 hereof.

          (d) The grant of a Stock Option shall be made by a written agreement
     (the "Stock Option Agreement") in accordance with the terms of this Plan,
     and pursuant to additional terms as may be determined by the Committee.

     6. 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 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 Non-employee 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
it the Corporation or otherwise) immediately after the consummation of such
transaction, thereupon any and all outstanding Stock Options shall immediately

                                       2

<PAGE>

become exercisable until the consummation of such transaction, or if not
consummated, until the agreement therefore 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, 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 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, thereupon any and all outstanding Stock
Options shall immediately become exercisable.

     7. Value. Where used in the Plan, the "fair market value" of Stock or any
options or rights with respect thereto, 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 dealer "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 Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations promulgated thereunder.

     8. Continued Relationship. Nothing in the Plan or in any Stock Option shall
confer upon any Non-employee 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 shareholders may have with respect to the
Non-employee Director's relationship with the Corporation.

     9. General Restrictions. The Board 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 Non-employee Director with respect to disposition of any
Common Stock (including, without limitation, that at the time of the
Non-employee 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 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 and legal
counsel for the Corporation. Notwithstanding anything to the contrary herein, a
Non-employee 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 (the "1934 Act").

                                       3

<PAGE>

     10. Rights. Except as otherwise provided in the Plan, a Non-employee
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 Non-employee Director. No Stock Option, or the
grant thereof, shall limit or affect the right or power of the Corporation or
its subsidiaries 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.

     11. 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 of other securities of the
Corporation or of another corporation or of another legal entity (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 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 11 may be settled as a majority of the members of the Board 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 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.

                                       4

<PAGE>

     12. Forfeiture. Notwithstanding anything to the contrary in this Plan, if a
Non-employee Director is engaged in fraud, embezzlement, theft, commission of a
felony, or dishonesty in the course of his relationship with the Corporation or
its subsidiaries, or has disclosed trade secrets of the Corporation or its
subsidiaries, the Non-employee Director 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.

     13. Miscellaneous.

          (a) Any reference contained in this Plan to particular section or
     provision of law, rule or regulation, including but not limited to the Code
     and the 1934 Act, 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 1934 Act, transactions
     under this Plan are intended to comply with all applicable conditions of
     Section 16 and the rules and regulations promulgated thereunder, or any
     successor rules and regulations that may be promulgated by the Securities
     and Exchange Commission, and to the extent any provision of this Plan or
     action by the Committee fails to so comply, it shall be deemed null and
     void, to the extent permitted by applicable law and deemed advisable by the
     Committee.

          (b) Where used in this Plan, the plural shall include the singular,
     and unless the context otherwise clearly requires, the singular shall
     include the plural.

          (c) 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, Stock
Options granted under the Plan are not transferable except as designated by the
Non-employee Director by will and the laws of descent and distribution.

     15. Amendment. To the extent permitted by applicable law, the Board may
amend, suspend, or terminate the Plan at any time. The amendment or termination
of this Plan shall not, without the consent of the Non-employee Directors, alter
or impair any rights or obligations under any Stock Option previously granted
hereunder.

     16. Taxes. The issuance of shares of Common Stock under the Plan shall be
subject to any and all applicable laws and regulations, including tax reporting
and withholding laws and regulations, of the United States of America, and of
state and local taxing authorities.

                                       5

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