Document:

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                                                                 EXHIBIT 10.2(b)

AMENDMENT #2
TO THE
CITIZENS & NORTHERN BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

As authorized by Section 7.02 of the Citizens & Northern Bank Supplemental
Executive Retirement Plan ("Plan") as effective January 1, 1989, the employer,
Citizens & Northern Bank, hereby amends the Plan in the following manner:

FIRST: Section 1. 12 is amended to decrease the age required for retirement
under the Plan. As amended, Section 1. 12 shall read as follows:

         1.       12 Retirement Date: The later of age 55 or 5 years of
                  participation in the Plan.

SECOND: Section 4.02 (as modified by Amendment #1) is amended to clarify that
the Participant has the right to determine the periodic payout amount and period
of payment, subject to the forfeiture provisions as contained in Section 5.03.
As amended, Section 4.02 shall read as follows:

         1.2      The benefit payable to or on behalf of a Participant as
                  determined under Section 4.01 shall only be paid in the form
                  of an annuity, with ownership of the annuity, payment
                  provisions and forfeitability as determined in this Plan. The
                  Participant shall have the option to determine the periodic
                  payout amount of the annuity and the period of payout at the
                  time of the distributable event described in Section 4.03
                  based upon the funds in the Participant's account, subject to
                  the overriding forfeiture provisions in Section 5.03 and in
                  other provisions of the Plan. In the case of a death benefit
                  payment under Section 4.06, the designated beneficiary shall
                  elect the periodic payout amount of the annuity and the period
                  of payout as if he/she were the Participant, subject to the
                  forfeiture provisions in Section 5.03 and in other provisions
                  of the Plan.

THIRD: Section 5.03 is amended to provide for the general forfeiture of account
balances while employed and forfeiture of annuity benefits in the event of
violation of the noncompetition clause contained in the amended section. As
amended, Section 5.03 shall read as follows:

         1.3      Termination of Participant's employment by the Participant or
                  by the Employer before the occurrence of one of the events
                  enumerated in Section 4.03 of the Plan shall result in the
                  forfeiture of the Participant's interest in his/her Account.
                  Each Participant's interest in his/her account maintained in
                  the Trust Fund shall be forfeitable. Each Participant's
                  annuity interest in his/her Account maintained in the Trust
                  Fund shall be subject to forfeiture until it is received by
                  the Participant as a periodic annuity payment. Ownership of
                  any annuity contract purchased or self-funded annuity
                  determined pursuant to Section 4.02 of the Plan shall be
                  retained by the Trustee.

                  Notwithstanding anything herein contained to the contrary, no
                  payment of any then unpaid annuity payment shall be made and
                  all rights under the Plan to future annuity payments of any
                  Participant, Beneficiary of a Participant, executor or
                  administrator of a Participant or Beneficiary, or any other
                  person, to receive payments thereof shall be forfeited if the
                  Participant or Beneficiary shall directly or indirectly, alone
                  or for the account of themselves, or as a partner, member,
                  employee, advisor or agent of any partnership or joint
                  venture, or as a trustee, officer, director, shareholder,
                  employee, advisor, or agent of any corporation, trust, or
                  other business organization or entity, own, manage, advise,
                  encourage, support, finance, operate, join, control, carry on,
                  engage or participate in the ownership, management, operation
                  or control of or be connected in any manner with any business
                  or any line of business of Employer at the time of the
                  distributable event described in Section 4.03, in any
                  geographic area served by the Employer at the time of said
                  distributable event. The Board shall determine, in its sole
                  and uncontrolled discretion, whether the Participant or
                  Beneficiary has engaged in such activity described herein in
                  the geographic area served by the Employer and such decision
                  shall be binding on the Participant or Beneficiary.

FOURTH: Five sections of the Plan require amendment in order to be consistent
with the amendments that are detailed above. As amended, those sections read as
follows:

                  1.3      Payment of benefits due as determined in Section 4.02
                           of the Plan shall commence upon the occurrence of one
                           of the following events:
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                           (a)      the Participant's attainment of his/her
                                    Retirement date;

                           (b)      the disability of the Participant;

                           (c)      the death of the Participant; or

                           (d)      the acquisition of the employer by another
                                    institution.

                  1.1      This Trust is established by the Employer for the
                           purpose of accumulating funds to pay benefits under
                           the Plan. Payments from the Trust to Participants or
                           their Beneficiaries shall be in discharge of the
                           Employer's liability under the terms of the Plan to
                           such Participants to the extent such benefits are
                           paid from the Trust and to the extent benefits are
                           not forfeited as determined herein.

                  1.8      Except as otherwise provided in the Plan, the income
                           and profits of the Trust Fund shall be accumulated
                           and added to the principal of the Trust Fund and
                           invested and reinvested therewith as a single fund.
                           The Trustee is authorized to invest the assets of the
                           Trust Fund in investments including but not limited
                           to bonds, notes, debentures, mortgages, certificates,
                           annuities, the stock of the Employer, preferred or
                           common stock or such other property, real or
                           personal, within the United States. The Trustee in
                           its discretion may hold in cash such portion of the
                           Trust Fund as shall be reasonable under the
                           prevailing circumstances, pending investment or
                           payment of expenses or distribution of benefits. Such
                           investments must be sufficiently diversified or
                           insured or otherwise guaranteed to minimize the risk
                           of large losses.

                  1.16     During the period of time an employee participates in
                           the Plan and prior to the Trustee obtaining an
                           annuity to pay benefits to a participant, the Trustee
                           will maintain a separate Account for each Employee to
                           which will be credited the Employer contributions and
                           earnings thereon. As of each Valuation Date the
                           Trustee shall value each Participant's Account as
                           follows:

                          (a)       As of each Valuation Date, or more
                                    frequently, any increases or decreases in
                                    the fair market value of the Trust Fund
                                    since the last adjustment and all income of
                                    the Trust Fund for such period shall be
                                    credited to or deducted from the Account of
                                    a Participant in the ratio that such Account
                                    bears to all Accounts.

                          (b)       As of each Valuation Date the Accounts of
                                    all Participants shall be adjusted to
                                    reflect the effects of income, realized and
                                    unrealized gains and losses and expenses.

                          (c)       In order to determine the increase or
                                    decrease in the fair market value of the
                                    Trust Fund, the market value of the Trust
                                    assets there shall be subtracted therefrom:

                                    (i)      the amount of any Employer
                                             contributions which have been made
                                             to the Trust Fund for that Plan
                                             Year; and

                                    (ii)     the amount of any benefits which
                                             are due but not yet paid.

                          (d)       Credits or deductions to a Participant's
                                    Account shall be deemed to have been made on
                                    the date to which they are related although
                                    actually determined on some later date.
                                    Distributions to a Participant or
                                    Beneficiary shall be based on the Valuation
                                    Date coincident with or preceding the date
                                    of payment.

                  1.7      No Account created for an employee or benefit payable
                           or periodic annuity payment that is 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 or annuity payment
                           under the Plan.

FIFTH: This Amendment is made effective as of the date of its adoption.

SIXTH: All other provisions of the Plan remain in full force and effect.

Executed this 21st day of December, 2000, by the duly authorized agent of
Citizens & Northern Bank.

                                 Title: Chairman, President and CEO
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                                                                    EXHIBIT 10.3

                         CITIZENS & NORTHERN CORPORATION
                            1995 STOCK INCENTIVE PLAN

1. PURPOSE. The purpose of this Stock Incentive Plan (the "Plan") is to advance
the development, growth and financial condition of Citizens & Northern
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 capital stock
of the Corporation so as to secure, retain and motivate personnel who may be
responsible for the operation and management of the affairs of the Corporation
and any such subsidiary now or hereafter existing ("Subsidiary").

2. TERM. The Plan shall become effective as of the date it is adopted by the
Corporation's Board of Directors (the "Board"), so long as the Corporation's
stockholders duly approve the Plan within twelve (12) months either before or
after the date of the Board's adoption of the Plan. Any and all options and
rights awarded under the Plan ("Awards") before it is so approved by the
Corporation's stockholders shall be conditional upon and may not be exercised
before timely obtainment of such approval, and shall lapse upon the failure
thereof. If the Plan is so approved, it shall continue in effect until all
Awards either have lapsed or been exercised, satisfied or cancelled according to
their terms under the Plan.

3. STOCK. The shares of stock that may be issued under the Plan shall not exceed
in the aggregate 60,000 shares of the Corporation's common stock, par value
$1.00 per share (the "Stock"), as may be adjusted pursuant to paragraph 18
hereof. Such shares of Stock may be either authorized and unissued shares of
Stock, or authorized shares of Stock issued by the Corporation and subsequently
reacquired by it as treasury stock. Under no circumstances shall any fractional
shares of Stock be issued or sold under the Plan or any Award. Except as may be
otherwise provided in the Plan, any Stock subject to an Award that for any
reason lapses or terminates prior to its exercise as to such Stock shall become
and again be available under the Plan. The Corporation shall reserve and keep
available, and shall duly apply for any requisite governmental authority to
issue or sell the number of shares of Stock needed to satisfy the requirements
of the Plan while in effect. 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 such
Stock as to which such authority has not been obtained.

4. ADMINISTRATION. The Plan shall be administered by the Salary and Pension
Committee (the "Committee") consisting of not fewer than two (2) non-employee
directors from the Board serving for such terms as determined, selected and
appointed by the Board. To serve on the Committee, a person must be a director
of the Corporation and during the year prior to commencing service on the
Committee, was not granted or awarded any Awards, allocations or other options
or rights of or with respect to Stock or any other capital stock of the
Corporation or its affiliates pursuant to the Plan or any other plan of the
Corporation or its affiliates which provides for discretionary grants or awards.
A majority of the committee's membership shall constitute a quorum for the
transaction of all business of the Committee, and all decisions and actions
taken by the Committee shall be determined by a majority of the members of the
Committee attending a meeting at which a quorum of the Committee is present.

The Committee shall be responsible for the management and operation of the Plan
and, subject to its provisions, shall have full, absolute and final power and
authority, exercisable in its sole discretion: to interpret and construe the
provisions of the Plan, adopt, revise and rescind rules and regulations relating
to the Plan and its administration, and decide all questions of fact arising in
the application thereof; to determine what, to whom, when and under what facts
and circumstances Awards shall be made, and the form, number, terms, conditions
and duration thereof, including but not limited to when exercisable, the number
of shares of Stock subject thereto, and Stock option purchase prices; to adopt,
revise and

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rescind procedural rules for the transaction of the Committee's business,
subject to any directives of the Board not inconsistent with the provisions or
intent of the Plan or applicable provisions of law; and to make all other
determinations and decisions, take all actions and do all things necessary or
appropriate in and for the administration of the Plan. The Committee's
determinations, decisions and actions under the Plan, including but not limited
to those described above, need not be uniform or consistent, but may be
different and selectively made and applied, even in similar circumstances and
among similarly situated persons. Unless contrary to the provisions of the Plan,
all decisions, determinations and actions made or taken by the Committee shall
be final and binding upon the Corporation and all interested persons, and their
heirs, personal and legal representatives, successors, assigns and
beneficiaries. 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 that 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 that are not intended to qualify under
Sections 421-424 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 any other Award,
either to the same person or otherwise, or impose any obligation upon the person
to whom granted to exercise the Award. 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, SAR, or Restricted
Stock, as the case may be. Every Award made to a person (a "Recipient") shall be
exercisable during his or her lifetime only by the Recipient, and shall not be
salable, transferable or assignable by the Recipient except by his or her Will
or pursuant to applicable laws of descent and distribution.

6. ELIGIBILITY. Persons eligible to receive Awards shall be those key officers
and other employees of the Corporation and each Subsidiary as determined by the
Committee. In no case, however, shall any current member of the Committee be
eligible to receive any Awards. A person's eligibility to receive Awards shall
not confer upon him or her any right to receive any Awards; rather, the
Committee shall have the sole authority, exercisable in its discretion
consistent with the provisions of the Plan, to select when, to whom and under
what facts and circumstances Awards will be made. Except as otherwise provided,
a person's eligibility to receive, or actual receipt of Awards 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 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:

     (a) 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 stockholders, whichever date is earlier;

         (b) 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 such Option is awarded;

     (c) If the Recipient of 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 Recipient thereafter to exercise such Option
     during its remaining term for a period of not more than three (3) months
     after such cessation of employment to the extent that the Option

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

         (d) The purchase price of a share of Stock subject to any Qualified
         Option, as determined by the Committee, shall not be less than the
         Stock's fair market value at the time such Option is awarded as
         determined under paragraph13 hereof, or less than the Stock's par
         value.

8. NON-OUALIFIED 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 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 such Option is awarded;

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

         (c) The purchase price of a share of Stock subject to any Non-Qualified
         Option, as determined by the Committee, shall not be less than the
         Stock's par value.

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 its Recipient 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;

         (c) Upon exercise of any SAR, the Recipient 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;
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         (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 or continue beyond the expiration of ten (10) years after the
         date such 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 Recipient of a SAR, before its lapse or full exercise, ceases to
     be eligible under the Plan, the Committee may permit the Recipient
     thereafter to exercise such SAR during its remaining
          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 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.

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 Recipient 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 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 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 Stock
                  Incentive Plan and a certain agreement entered into between
                  the owner and the Corporation pursuant to said Plan. The
                  release of this Certificate and the shares of Stock hereby
                  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 without such legend shall be issued to the
         Recipient;

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     (d) 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.

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 of the
Corporation, or his or her designee, identifying the Award being 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 Stock 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 Recipient 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 Recipient under the other
connected Award shall be reduced by the number of shares of Stock with respect
to which the Recipient has exercised his or her SAR, and the number of shares of
Stock subject to the Recipient's SAR shall be reduced by the number of shares of
Stock acquired by the Recipient 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 conditions as the Committee may deem necessary or appropriate. In addition
(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 therefor 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, 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.

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12. WITHHOLDING. Whenever the Corporation is about to issue or transfer Stock
pursuant to any Award, the Corporation may require the Recipient to remit to the
Corporation an amount sufficient to satisfy fully any federal, state and other
jurisdictions' requirements prior to the delivery of any certificates for such
shares of Stock. Whenever payments are to be made in cash to any Recipient
pursuant to his or her exercise of an Award, such payments shall be made net
after deduction of all amounts sufficient to satisfy fully any federal, state
and other jurisdictions' income and other tax withholding requirements.

13. 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 dealer "bid" and "ask"
prices thereof on the New York over-the-counter market as reported by the
National Association of Securities Dealers, Inc., 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.

14. AMENDMENT. To the extent permitted by applicable law, the Board may amend,
suspend, or terminate the Plan at any time; provided, however, that: (a) no
amendment may be adopted that permits an Award to be granted to any member of
the Committee; (b) with respect to qualified options, except as specified in
paragraph 18 hereof, no amendment may be adopted that will increase the number
of shares reserved for Awards under the Plan, change the option price, or change
the provisions required for compliance with Section 422 of the Code and
regulations issued thereunder; and (c) notwithstanding anything to the contrary
herein, no amendment may be adopted to increase the number of securities that
may be issued under the Plan, except as specified in paragraph 18 hereof,
materially increase the benefits accruing to recipients or materially modify the
requirements for eligibility to participate in the Plan, without the approval of
the shareholders of the Corporation, to the extent that shareholder approval is
required under Section 16 of the Securities Exchange Act of 1934, as amended,
and the regulations thereunder, as from time to time in effect. The amendment or
termination of this Plan shall not, without the consent of the Recipients, alter
or impair any rights or obligations under any Award previously granted
hereunder.

In addition and subject to the foregoing, the Committee may prescribe other or
additional terms, conditions and provisions with respect to the grant or
exercise of any or all Awards as the Committee may determine necessary or
appropriate for such Awards and the Stock subject thereto to qualify under and
comply with all applicable laws, rules and regulations, and changes therein,
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, and Rule 16b-3
promulgated by the Securities and Exchange Commission. Without limiting the
generality of the preceding sentence, each Qualified Option, and any SAR awarded
in connection therewith, shall be subject to such other and additional terms,
conditions and provisions as the Committee may deem necessary or appropriate in
order to qualify such Option, or connected Option and SAR, as an incentive stock
option under Section 422 of the Code, including but not limited to the following
Provisions:

         (i) the aggregate fair market value, at the time such Option is
         awarded, 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 Recipient during any calendar year under the Plan and any other
         plans of the Corporation or its affiliates, shall not exceed
         $100,000.00; and

     (ii) No Qualified Option, or any SAR in connection therewith, shall be
     awarded to any person if at the time of such Award, such person owns Stock
     possessing more than ten percent (10%) of the total combined voting power
     of all classes of capital stock of the Corporation or its affiliates,
     unless at the time such Option or SAR is awarded the Stock purchase price
     under such Option is at least one hundred and ten percent (110%) of the
     fair

<PAGE>   7

     market value of the Stock subject to such Option and the Option (and any
     SAR connected therewith) by its terms is not exercisable after the
     expiration of five (5) years from the date it is awarded.

From time to time, the Committee may rescind, revise and add to any of such
terms, conditions and provisions as may be necessary or appropriate to have any
Awards be or remain qualified and in compliance with all applicable laws, rules
and regulations, and may delete, omit or waive any of such terms, conditions or
provisions that are no longer required by reason of changes in applicable laws,
rules or regulations.

15. CONTINUED EMPLOYMENT. Nothing in the Plan or any Award shall confer upon any
Recipient or other persons any right to continue in the employment 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 such Recipient or
other persons, and the employment and other relationships thereof. However, the
Committee may require as a condition of making and/or exercising any Award that
its Recipient 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 following the date the Award is made and/or exercised 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 said Option as an incentive stock option under Sections 421 and 422 of the
Code.

16. GENERAL RESTRICTIONS. Each Award shall be subject to the requirement and
provision that if at any time the Committee determines it necessary or desirable
as a condition of or in consideration of making such Award, or the purchase or
issuance or Stock thereunder, (a) the listing, registration or qualification of
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) the
approval of any governmental authority, or (c) an agreement by the Recipient
with respect to disposition of any Stock (including without limitation that at
the time of the Recipient's exercise of the Award, any Stock thereby acquired is
being and will be acquired solely for investment purposes and without any
intention to sell or distribute such Stock), then such Award shall not be
consummated in whole or in part unless such listing, registration,
qualification, approval or agreement shall have been appropriately effected or
obtained to the satisfaction of the Committee and legal counsel for the
Corporation.

17. RIGHTS. Except as otherwise provided in the Plan, the Recipient of any Award
shall have no rights as a holder of the Stock subject thereto unless and until
one or more certificates for the shares of such Stock are issued and delivered
to the Recipient. No adjustments shall be made for dividends, either ordinary or
extraordinary, or any other distributions with respect to Stock, whether made in
cash, securities or other property, or any rights with respect thereto, for
which the record date is prior to the date that any certificates for Stock
subject to an Award are issued to the Recipient pursuant to his or her exercise
thereof. No Award, 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.

18. ADJUSTMENTS. In the event of any change in the number of issued and
outstanding shares of Stock which results from a stock split, reverse stock
split, payment of a stock dividend or any other change in the capital structure
of the Corporation, the Committee shall proportionately adjust the maximum
number of shares subject to each outstanding Award and (where appropriate) the
purchase price per share thereof (but not the total purchase price under the
Award), so that upon exercise or realization of such Award, the Recipient shall
receive the same number of shares he or she would have received had he or she
been the holder of all shares subject to his or her outstanding Award and
immediately before the effective date of such change in the number of issued and
outstanding shares of Stock. Such adjustments shall not, however, result in the
issuance of fractional shares. Any adjustment under this paragraph 18 shall be
made by the Committee, subject to approval by the Board. No adjustments shall

<PAGE>   8

be made that would cause a Qualified Option to fail to continue to qualify as an
incentive stock option within the meaning of Section 422 of the Code.

In the event the Corporation is the party to any merger, consolidation or other
reorganization, any and all outstanding Awards shall apply and relate to the
securities to which a holder of Stock is entitled after such merger,
consolidation or other reorganization. Upon any liquidation or dissolution of
the Corporation, any and all outstanding Awards shall terminate upon
consummation of such liquidation or dissolution, but prior to such consummation
shall be exercisable to the extent that the same otherwise are exercisable under
the Plan.

19. 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 Recipient, 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 any Subsidiary that has damaged
it, or that the Recipient has disclosed trade secrets of the Corporation or its
affiliates, the Recipient shall forfeit all rights under and to all unexercised
Awards, and 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 cancelled. The decision of the
Committee as to the cause of the Recipients 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 Recipient'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 said Option as an
incentive stock option under Sections 421 and 422 of the Code.

20. INDEMNIFICATION. In and with respect to the administration of the Plan, the
Corporation shall indemnify each present and future member of the Committee
and/or of the Board, who shall be entitled without further action on his or her
part to indemnity 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 such 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 such member may be or 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 such a
member. The provisions, protection and benefits of this paragraph 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) as may not be allowed by applicable law,
(b) to the extent there is entitlement to insurance proceeds under insurance
coverage provided by the Corporation on account of the same matter or proceeding
for which indemnification hereunder is claimed, or (c) to the extent there is
entitlement to indemnification from the Corporation, other than under this
paragraph, on account of the same matter or proceeding for which indemnification
hereunder is claimed.

21. MISCELLANEOUS. Any reference contained in this Plan to a particular section
or provision of law, rule or regulation, including but not limited to the
Internal Revenue Code of 1986 and the Securities Exchange Act of 1934, both as
amended, shall include any subsequently enacted or promulgated section or
provision of law, rule or regulation, as the case may be, of similar import.
With respect to persons subject to Section 16 of the Securities Exchange Act of
1934, as amended, transactions under this Pan are intended to comply with all
applicable conditions of Rule 16b-3 or any successor rule 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
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. The captions of the numbered paragraphs 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.

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