Document:

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                                                                   EXHIBIT 10.20

                             EMPLOYMENT AGREEMENT
                             --------------------

     AGREEMENT, dated as of December 15, 1997, between LOEWS CINEPLEX
ENTERTAINMENT CORPORATION, a Delaware corporation formerly known as LTM
Holdings, Inc., which maintains offices at 711 Fifth Avenue, New York, New York
10022 (the "Company"), and Mindy Tucker ("Employee"), residing at 8 Seneca Road,
Scarsdale, New York 10583.

     WHEREAS, Employee and the Company desire to enter into this Employment
Agreement (this "Agreement") to be effective as of the date hereof.

     NOW, THEREFORE, the parties hereby agree as follows:

     1.   TERM OF EMPLOYMENT.
          ------------------

          (a)  The Company hereby employs Employee, and Employee hereby accepts
employment, on the terms and subject to the conditions hereinafter set forth,
for a term (the "Employment Period") commencing on the date hereof and
continuing until December 14, 2000 or, if the term of this Agreement is extended
pursuant to Section 1(b) hereof, until December 14, 2002 (the "Expiration
Date").

          (b)  The Company shall have the right (the "Extension Option"),
exercisable upon written notice given to Employee on or before March 15, 2000,
to extend the Employment Period, all in accordance with and subject to the terms
and conditions hereof, for an additional two-year period commencing on December
15, 2000, and continuing until December 14, 2002.

     2.   DUTIES AND PRIVILEGES.
          ---------------------

          (a)  During the Employment Period, Employee shall serve as Corporate
Vice President, Strategic Planning and Secretary of the Company and be
responsible to and report to the Chief Executive Officer of the Company (the
"CEO"), or such other executive holding the title of Executive Vice President or
greater as designated by the CEO (the person to whom Employee reports being
hereafter referred to as the "Supervisory Officer").  During the Employment
Period, Employee shall have such authority and perform such duties which are
consistent with Employee's title and position as Corporate Vice President,
Strategic Planning and Secretary of the Company as the Supervisory Officer may
from time to time prescribe; devote Employee's entire business time, ability and
energy exclusively to the performance of Employee's duties hereunder (except
that Employee may participate in charitable and industry activities that do not
interfere with her duties hereunder); and use Employee's best efforts to advance
the interests and businesses of the Company, and its divisions and subsidiaries.
Employee's principal office shall be located at the Company's offices in the New
York metropolitan area.
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          (b)  The Company and Employee acknowledge that Employee's employment
shall be on a four-day-per-week basis, with Employee's work schedule to be
subject to the Company's and Employee's reasonable agreement, and with Employee
to be reasonably available by telephone on the fifth day.  The Company and
Employee acknowledge that Employee shall be treated for all other purposes as a
full-time employee; provided, however, that Employee acknowledges that she must
work a minimum of 21 hours per week to qualify for participation in the
Company's benefit plans.

     3.   COMPENSATION.
          ------------

          (a)  The Company shall pay to Employee a base salary at the rate of
$200,000 per year during the Employment Period; provided, however, that (i)
effective as of the first, second and fourth anniversaries of the Commencement
Date, the annual rate of salary payable to Employee pursuant to this Section
3(a) shall be increased to reflect the increase (if any) in the cost of living
during the previous year based upon the Consumer Price Index for the New York-
New Jersey Metropolitan area, as reported by the Bureau of Labor Statistics of
the United States Department of Labor, and (ii) that effective as of the third
anniversary of the Commencement Date, if the Company exercises the Extension
Option pursuant to Section 1(b) hereof, the annual base salary then payable to
Employee pursuant to this Section 3(a) shall be increased by $25,000.

          (b)  During the Employment Period, Employee shall be eligible to
participate in all then operative employee benefit plans of the Company which
are applicable generally to the Company's senior executives ("Employee Benefit
Plans"), subject to the respective terms and conditions of such Employee Benefit
Plans.  Notwithstanding the foregoing, Employee shall be entitled to no less
than four weeks paid vacation each year during the Employment Period.  Nothing
contained in this Agreement shall obligate the Company to adopt or implement any
Employee Benefit Plan, or prevent or limit the Company from making any blanket
amendments, changes or modifications of the eligibility requirements or any
other provisions of, or terminating, any Employee Benefit Plan at any time
(whether during or after the Employment Period), and Employee's participation in
or entitlement under any such Employee Benefit Plan shall at all times be
subject in all respects thereto.  To the extent permitted by law and provided
for by the applicable Employee Benefit Plan, Employee shall be entitled to prior
service credit for her years of service with any group of which the Company (or
its predecessor) was a member in respect of any medical or retirement Employee
Benefit Plan for which years of service are generally applicable.  During the
Employment Period, the Company shall maintain a director and officer liability
insurance policy covering Employee in her capacity as an officer of the Company.

          (c)  During the Employment Period, Employee shall be eligible to
receive an annual bonus (the "Annual Bonus"), the amount of which will be
targeted at $75,000.  The amount and payment of the Annual Bonus shall be based
on the attainment

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of specified performance goals to be developed by the Company's Board of
Directors each year.

          (d)  To facilitate Employee's performance of Employee's duties
hereunder, the Company shall make available to Employee, during the Employment
Period, a car allowance of not less than $900 per month.  The Company shall also
pay for and provide parking for Employee near the Company's New York office.

          (e)  The Company shall pay for the installation and monthly charges
for a home fax machine and modem (each to be owned by the Company), and will pay
for all monthly access charges and business related call charges with respect to
Employee's personal cellular phone.

     4.   EXPIRATION OF TERM AND TERMINATION.
          ----------------------------------

          (a)  Employee's employment by the Company and this Agreement shall
automatically expire and terminate on the Expiration Date unless sooner
terminated pursuant to the provisions of this Section 4.

          (b)  Employee's employment by the Company and this Agreement shall
automatically terminate upon Employee's death.

          (c)  The Company shall have the right and option, exercisable by
giving written notice to Employee, to terminate Employee's employment by the
Company and this Agreement at any time after Employee has been unable to perform
the services or duties required of Employee in connection with Employee's
employment by the Company as a result of physical or mental disability (or
disabilities) which has (or have) continued for a period of twelve (12)
consecutive weeks, or for a period of sixteen (16) weeks in the aggregate,
during any twelve (12) month period.

          (d)  The Company shall have the right and option, exercisable by
giving written notice to Employee, to terminate Employee's employment by the
Company and this Agreement at any time after the occurrence of any of the
following events or contingencies (any such termination being deemed to be a
termination "for cause"):

               (i)  Employee materially breaches, materially repudiates or
otherwise materially fails to comply with or perform any of the terms of this
Agreement, any duties of Employee in connection with Employee's employment by
the Company or any of the Company's policies or procedures, or deliberately
interferes with the material compliance by any other employee of the Company
with any of the foregoing and such action (if correctable) is not materially
corrected within 30 days after notice from the Company;

               (ii) The conviction by Employee of a felony or the pleading by
Employee of no contest (or similar plea) to any felony (other than a crime for
which

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vicarious liability is imposed upon Employee solely by reason of Employee's
position with the Company, and not by reason of Employee's conduct);

          (iii) Any act or omission by Employee constituting fraud, gross
negligence or willful misconduct in connection with Employee's employment by the
Company and, if correctable, is not corrected within 30 days after notice from
the Company; or

          (iv)  Any other act, omission, event or condition constituting cause
for the discharge of an employee under the laws of New York which, if
correctable, is not corrected within 30 days after notice from the Company.

          (e)   The Company shall have no obligation to renew or extend the
Employment Period.  Neither (i) the expiration of the Employment Period, nor
(ii) the failure or refusal of the Company to renew or extend the Employment
Period, this Agreement, or Employee's employment by the Company upon the
Expiration Date, nor (iii) the termination of this Agreement by the Company
pursuant to any provision of this Section 4 (except Section 4(g)), shall be
deemed to constitute a termination of Employee's employment by the Company
"without cause" for the purpose of triggering any rights of or causes of action
by Employee.

          (f)   If this Agreement, the Employment Period or Employee's
employment by the Company is terminated or expires pursuant to any provision of
this Section 4 (other than Section 4(g)), or is terminated by Employee by reason
other than Employer's material breach of this Agreement, Employee's right to
receive salary or other compensation from the Company and all other rights and
entitlements of Employee pursuant to this Agreement or as an employee of the
Company shall forthwith cease and terminate, and the Company shall have no
liability or obligation whatsoever to Employee, except that:

                (i) The Company shall be obligated to pay to Employee (x) not
later than the effective date of such termination all unpaid salary, car
allowance (if any), vacation and reimbursable expenses which shall have accrued
as of the effective date of such termination and (y) as soon as practicable
after the end of the fiscal year in which the termination occurs, a pro rata
portion of the Annual Bonus for the portion of such fiscal year through the
effective date of such termination; and

               (ii) The terms and conditions of applicable Employee Benefit
Plans, if any, shall control Employee's entitlement, if any, to receive benefits
thereunder.

          (g)  The Company shall have the unilateral right, at any time, without
notice, in the Company's sole and absolute discretion, to terminate Employee's
employment by the Company, without cause, and for any reason or for no reason
(the Company's "Termination Rights").  If the Company materially reduces the
duties or responsibilities of the Employee hereunder, or otherwise materially
breaches this

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Agreement, such action shall be deemed an exercise by the Company of its
Termination Rights. The Company's Termination Rights are not limited or
restricted by, and shall supersede, any policy of the Company requiring or
favoring continued employment of its employees during satisfactory performance,
any seniority system or any procedure governing the manner in which the
Company's discretion is to be exercised. No exercise by the Company of its
Termination Rights shall, under any circumstances, be deemed to constitute (i) a
breach by the Company of any term of this Agreement, express or implied
(including without limitation a breach of any implied covenant of good faith and
fair dealing), (ii) a wrongful discharge of Employee or a wrongful termination
of Employee's employment by the Company, (iii) a wrongful deprivation by the
Company of Employee's corporate office (or authority, opportunities or other
benefits relating thereto) or (iv) the breach by the Company of any other duty
or obligation, express or implied, which the Company may owe to Employee
pursuant to any principle or provision of law (whether contract or tort);
provided, however, that notwithstanding the foregoing, a breach by the Company
of its payment obligations pursuant to this Section 4(g) shall be deemed to be a
breach of this Agreement. If the Company elects to terminate Employee's
employment or is deemed to exercise its Termination Rights pursuant to this
Section 4(g) prior to the Expiration Date, the Company shall have no obligation
or liability to Employee pursuant to this Agreement, or otherwise, except to pay
to Employee until the Expiration Date (x) the salary and benefits (in each case
as if this Agreement had not been terminated) as provided in Sections 3(a) and
(b) hereof (excluding car allowance and parking benefits), and (y) an annual
bonus amount equal to the target bonus for the year in which such termination
occurs, or if no such target has been set for the year, the most recent Annual
Bonus actually paid or payable to the Employee (pro-rated for the portion of a
fiscal year ending on the Expiration Date). If the Company elects to terminate
Employee's employment or is deemed to exercise its Termination Rights pursuant
to this Section 4(g) prior to the Expiration Date, Employee shall have no
obligation to mitigate. However, it is agreed that if Employee receives
employment income (whether salary, direct or indirect compensation or otherwise)
from subsequent employment (including self-employment) after such termination
and on or before the Expiration Date, such employment income shall be set off
against any payments to be made to Employee by the Company in connection with
its exercise or deemed exercise of its Termination Rights.

          (h)  Immediately upon any termination of Employee's employment
hereunder or of this Agreement (whether or not pursuant to this Section 4),
Employee shall return to the Company all property of the Company heretofore
provided to Employee by the Company, or otherwise in the custody, possession or
control of Employee (including, without limitation, the "Confidential Materials"
described in Paragraph 6(b) of Exhibit A attached hereto).  Notwithstanding any
provision of this Agreement to the contrary, no termination of this Agreement or
of Employee's employment for any reason whatsoever shall in any manner operate
to terminate, limit or otherwise affect the Company's ownership of any of the
rights, properties or privileges granted to the Company hereunder.

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     5.   STANDARD TERMS.  Attached as Exhibit A hereto and deemed a part hereof
          --------------
are the Company's Standard Terms and Conditions of Employment Agreement, all of
which terms are binding on the parties hereto and incorporated herein.  For
convenience, provisions of this Agreement shall be referred to as "Sections" and
provisions of the Standard Terms shall be referred as "Paragraphs."  In the case
of any conflict between the terms of this Agreement and the terms of Exhibit A
hereto, the terms of this Agreement shall govern.

     6.   SUPERSEDING AGREEMENT.  This Agreement, including Exhibit A hereto,
          ---------------------
shall constitute the full and entire understanding of the parties hereto with
respect  to the subject matter hereof and shall supersede any prior agreements
with respect thereto.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed on their behalf as of the date first above written.

LOEWS CINEPLEX ENTERTAINMENT CORPORATION

By:  /s/ LAWRENCE J. RUISI                      /s/ MINDY TUCKER
    ________________________                   ______________________
Name:  Lawrence J. Ruisi                           Mindy Tucker
Title: President and Chief Executive Officer

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                                   EXHIBIT A

                         STANDARD TERMS AND CONDITIONS
                         -----------------------------
                            OF EMPLOYMENT AGREEMENT
                            -----------------------

     1.   Definitions.  All capitalized terms used herein shall have the
          -----------
meanings ascribed to them in the Agreement attached hereto. The following words,
terms and phrases (and variations thereof) used herein shall have the following
meanings:

          (a)  An "Affiliate" of a party means a Person which, directly or
indirectly, owns or controls, is owned or controlled by, or is under common
ownership or control with, such party.

          (b) "Intellectual Property" means any and all intellectual, artistic,
literary, dramatic or musical rights, works or other materials of any kind or
nature (whether or not entitled to protection under applicable copyright laws,
or reduced to or embodied in any medium or tangible form), including without
limitation all copyrights, patents, trademarks, service marks, trade secrets,
contract rights, titles, characters, plots, themes, dialogue, stories, scripts,
treatments, outlines, submissions, ideas, concepts, packages, compositions,
artwork and logos, and all audio, visual or audio-visual works of every kind and
in every stage of development, production and completion, and all rights to
distribute, advertise, promote, exhibit or otherwise exploit any of the
foregoing by any means, media or processes now known or hereafter devised.

          (c)  "Media Business" means all Persons engaging in any of the
following:  (i) the creation, production, distribution, exhibition or other
exploitation of theatrical motion pictures, television programs, sound
recordings or other visual, audio or audio-visual works or recordings of any
kind; (ii) television (including pay, free, over-the-air, cable and satellite)
or radio broadcasting; (iii) book, newspaper or periodical publishing; (iv)
music publishing; (v) "merchandising" (as that term is generally understood in
the entertainment industry); or (vi) advertising.

          (d)  "Person" means any individual, corporation, trust, estate,
partnership, joint venture, company, association, league, group, governmental
agency or other entity of any kind or nature.

     2.   Compensation.
          ------------

          (a)  Employee's salary shall be payable in equal installments (not
less frequently than monthly) in accordance with the Company's customary payroll
practices. No additional compensation shall be payable to Employee by reason of
the number of hours worked or by reason of any hours worked on Saturdays,
Sundays, holidays or otherwise. All compensation payable to Employee hereunder
(whether in the form of salary, benefits or otherwise) shall be subject to all
applicable laws, statutes, governmental regulations or orders, the terms of all
applicable Employee Benefit Plans and the terms of all agreements between or
binding upon the Company and Employee requiring the deduction or withholding of
any amounts from such payments, and the Company shall have the right to make
such deductions and withholdings in accordance with the Company's interpretation
thereof in the Company's sole judgment.

          (b)  Subject to Section 3(b) of the Agreement, Employee shall be
eligible to participate in fringe benefits, if any, maintained by the Company
for employees generally on the same basis as comparable employees of the
Company.

          (c)  Subject to the requirements of Employee's position and corporate

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office, Employee shall be entitled to annual vacations in accordance with the
Company's vacation policy in effect from time to time.

          (d)  The Company recognizes that, in connection with Employee's
performance of Employee's duties and obligations hereunder, Employee will incur
certain ordinary and necessary expenses of a business character.  The Company
shall pay Employee for such business expenses on the presentation of itemized
statements of such expenses, provided their extent and nature are approved in
accordance with the policies and procedures of the Company.

     3.   Right to Insure.  The Company shall have the right to secure, in its
          ---------------
own name or otherwise and at its own expense, life, health, accident or other
insurance covering or otherwise insuring Employee, and Employee shall have no
right, title or interest in or to any such insurance or any of the proceeds or
benefits thereof.  Employee shall fully assist and cooperate with the Company in
procuring any such insurance, including without limitation by submitting to such
examinations, and by signing such applications and other instruments, as may
reasonably be required by any insurance carrier to which application is made by
the Company for any such insurance.

     4.   Employment Exclusive.  Employee shall not perform services for any
          --------------------
Person other than the Company during the Employment Period without the prior
written consent of the Company and will not during the Employment Period engage
in any activity which would interfere with the performance of Employee's
services hereunder, or become financially interested in or associated with,
directly or indirectly, any Media Business.

     5.   Interest in Other Corporations.  Notwithstanding anything to the
          ------------------------------
contrary contained in Paragraph 4 hereof, Employee may own up to one percent
(1%) of any class of any Person's outstanding securities which are listed on any
national securities exchange, registered under Section 12(g) of the Securities
Exchange Act of 1934 or otherwise publicly traded, provided that the holdings of
Employee of any such security of a Media Business or any Person which does
business with the Company or its Affiliates do not represent more than 10% of
the aggregate of Employee's investment portfolio at any time.

     6.   Ownership of Proceeds of Employment; Confidentiality of Information;
          --------------------------------------------------------------------
          Etc.
          ----

          (a) The Company shall be the sole and exclusive owner throughout the

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universe in perpetuity of all of the results and proceeds of Employee's
services, work and labor during the Employment Period in connection with
Employee's employment by the Company, including without limitation all
Intellectual Property which Employee may develop, create, write or otherwise
produce during the Employment Period, free and clear of any and all claims,
liens or encumbrances.  All results and proceeds of Employee's services, work
and labor during the Employment Period shall be deemed to be works-made-for-hire
for the Company within the meaning of the copyright laws of the United States
and the Company shall be deemed to be the sole author thereof in all territories
and for all purposes.

          (b)  All information, documents, notes, memoranda and Intellectual
Property of any kind received, compiled, produced or otherwise made available to
Employee during or in connection with Employee's employment by the Company
relating in any way to the business of the Company or of any of its Affiliates
and which has not been made available or confirmed to the public by the Company
("Confidential Materials") shall be the sole and exclusive property of the
Company and shall in perpetuity (both during and after Employee's employment by
the Company) be maintained in utmost confidence by Employee and held by Employee
in trust for the benefit of the Company.  Employee shall not during the
Employment Period or at any time thereafter directly or indirectly release or
disclose to any other Person any Confidential Materials, except with the prior
written consent of the Company and in furtherance of the Company's business or
as required by law.

          (c)  Employee shall not, and shall not authorize or assist any other
Person to, directly or indirectly, at any time during the Employment Period or
for a period of twelve (12) months thereafter, without the Company's consent,
solicit, entice, persuade or induce any Person to terminate or refrain from
extending or renewing (on the same or different terms) such Person's employment
by, or contractual or business relationship with, the Company or any of its
Affiliates.

          (d)  During the Employment Period and with Employee's prior consent
(such consent not to be unreasonably withheld), the Company shall have the right
to use the Employee's name, approved biography (such approval not to be
unreasonably withheld), and likeness in connection with its business, including
in advertising its products and services, and may grant this right to others,
but not for use as an endorsement.

     7.   Warranties and Covenants.  Employee warrants, represents and covenants
          ------------------------
to the Company as follows:

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          (a)  Employee is free to enter into this Agreement and to perform the
services contemplated hereunder.

          (b)  Employee is not currently (and will not, to the best knowledge
and ability of Employee, at any time during the Employment Period be) subject to
any agreement, understanding, obligation, claim, litigation, condition or
disability which could adversely affect Employee's performance of any of
Employee's obligations hereunder or the Company's complete ownership and
enjoyment of all of the rights, powers and privileges granted to the Company
hereunder.

          (c)  No Intellectual Property written, composed, created or submitted
by Employee at any time during Employee's employment by the Company shall, to
the best of Employee's knowledge, violate the rights of privacy or publicity,
constitute a libel or slander or infringe upon the copyright, literary,
personal, private, civil, property or other rights of any Person.

     8.   Employment after Term.  Employee's employment by the Company may be
          ---------------------
continued beyond the Expiration Date by the express consent of both parties
(which consent each party shall have the right to grant or withhold in its sole
and absolute discretion).  In the event of any such continuation of Employee's
employment by the Company beyond the Expiration Date, the relationship between
the Company and Employee shall be that of employment-at-will which may be
terminated by either the Company or Employee at any time upon ten (10) days'
written notice, with or without cause, for any reason or for no reason, and
without liability of any nature.  Employee's employment by the Company, if any,
after the Expiration Date shall be governed by all of the terms and conditions
of this Agreement not inconsistent with the at-will nature of such employment.

     9.   Immigration.  In accordance with the Immigration Reform and Control
          -----------
Act of 1986 and the regulations adopted thereunder (8 CFR, Parts 109 and 274a),
the obligations of the Company under this Agreement are subject to and
conditioned upon Employee verifying and delivering to the Company, within three
(3) business days of Employee's first date of employment, the Form I-9
prescribed by the Immigration and Naturalization Service, and presenting to the
officer of the Company designated therefor the original documentation required
under such regulations to establish (i) the identity of Employee and (ii) that
Employee is lawfully authorized to work in the United States. If Employee is
unable to provide the documents required within the aforesaid three (3)
business-day period, Employee must (i) present to such designated officer within
said

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three (3) business days a receipt for the application for the documents
prescribed and (ii) the original documents required within twenty-one (21) days
of Employee's first date of employment. If Employee fails to verify and deliver
the Form I-9 and present the required original documents within the stated time
period, this Agreement and Employee's employment hereunder shall cease and
terminate as if this Agreement had never been entered into and neither party
shall have any further right, duty or obligation to the other under this
Agreement.

     10.  Equitable Relief.  Employee acknowledges that the services to be
          ----------------
rendered by Employee under this Agreement, and the rights and privileges granted
by Employee to the Company hereunder, are of a special, unique, extraordinary
and intellectual character which gives them a peculiar and special value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law, and a breach by Employee of any of the provisions hereof will
cause the Company great and irreparable injury.  Employee acknowledges that the
Company shall, therefore, be entitled, in addition to any other remedies which
it may have under this Agreement or at law, to receive injunctive and other
equitable relief (including without limitation specific performance) to enforce
any of the rights and privileges of the Company or any of the covenants or
obligations of Employee hereunder.  Nothing contained herein, and no exercise by
the Company of any right or remedy, shall be construed as a waiver by the
Company of any other rights or remedies which the Company may have.  In the
event that any court or tribunal shall at any time hereafter hold any covenants
or restrictions contained in this Agreement to be unenforceable or unreasonable
as to the scope, territory or period of time specified therein, such court shall
have the power, and is specifically requested by Employee and the Company, to
declare or determine the scope, territory or period of time which it deems to be
reasonable or enforceable and to enforce the restrictions contained therein to
such extent.

     11.  Governing Law, Legal Proceedings and Remedies.
          ---------------------------------------------

          (a)  The substantive laws (as distinguished from the choice of law
rules) of the State of New York shall govern (i) the validity and interpretation
of this Agreement, (ii) the performance by the parties hereto of their
respective duties and obligations hereunder and (iii) all other causes of action
(whether sounding in contract or in tort) arising out of or relating in any
fashion to Employee's employment by the Company or the termination of such
employment.

          (b)  Any and all actions, suits or legal proceedings of any nature

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<PAGE>

(whether sounding in contract or in tort) arising out of or relating to this
Agreement, to the employment of Employee by the Company or to the termination of
such employment shall be initiated and maintained only in a state or federal
court located in the City and County of New York, State of New York, which shall
be the exclusive forum for, and shall have sole and exclusive jurisdiction over
the subject matter of, all such proceedings. The Company and Employee each
hereby submit and subject themselves irrevocably to the personal jurisdiction of
such New York State and federal courts.

     12.  Notices.  All notices, requests, demands or other communications in
          -------
connection with this Agreement shall be in writing and shall be deemed to have
been duly given if delivered in person, by telegram, by telecopier to the
applicable telecopier number listed below, or by United States mail, postage
prepaid, certified or registered, with return receipt requested, or otherwise
actually delivered:

     If to Employee, to her at the address listed on page 1 of this Agreement.

     If to the Company, to it at:

                                711 Fifth Avenue
                           New York, New York 10022
                       Attention: Chief Executive Officer

     with a copy at the same address,

                           Attention: General Counsel

or such other addresses as Employee or the Company shall have designated by
written notice to the other party hereto.  Any such notice, demand or other
communication shall be deemed to have been given on the date actually delivered
(or, in the case of telecopier, on the date actually sent by telecopier) or upon
the expiration of three (3) days after the date mailed, as the case may be.

     13.  Service as Expert Witness.  Employee acknowledges that during the
          -------------------------
Employment Period Employee will have access to confidential and proprietary
information concerning the Company, including, without limitation, access to
various proprietary and confidential contracts and financial data.  Employee
agrees that Employee shall not at any time either during or after the term of
this Agreement serve as an "expert witness" or in any similar capacity in any
litigation or other proceeding to which the Company or any of its Affiliates or
subsidiaries is a party without the prior written

                                      A-7
<PAGE>

consent of the Company or such affiliate or subsidiary, as the case may be.

     14.  Miscellaneous.
          -------------

          (a)  This Agreement and the exhibits hereto contain a complete
statement of all of the arrangements between the parties with respect to
Employee's employment by the Company, supersede all existing agreements between
them concerning Employee's employment and cannot be changed or terminated
orally.  No provision of this Agreement shall be interpreted against any party
because that party or its legal representative drafted the provision.  There are
no warranties, representations or covenants, oral or written, express or
implied, except as expressly set forth herein.  Employee acknowledges that
Employee does not rely and has not relied upon any representation or statement
made by the Company or any of its representatives relating to the subject matter
of this Agreement except as set forth herein.

          (b)  If any provision of this Agreement or any portion thereof is
declared by any court of competent jurisdiction to be invalid, illegal or
incapable of being enforced, the remainder of such provision, and all of the
remaining provisions of this Agreement, shall continue in full force and effect
and no provision shall be deemed dependent on any other provision unless so
expressed herein.

          (c)  The failure of a party to insist on strict adherence to any term
of this Agreement shall not be considered a waiver of, or deprive that party of
the right thereafter to insist on strict adherence to, that term or any other
term of this Agreement.

          (d)  The headings in this Agreement (including the exhibits hereto)
are solely for convenience of reference and shall not affect its interpretation.

          (e)  The relationship between Employee and the Company is exclusively
that of employer and employee, and the Company's obligations to Employee
hereunder are exclusively contractual in nature.

          (f)  Employee shall, at the request of the Company, execute and
deliver to the Company all such documents as the Company may from time to time
deem necessary or desirable to evidence, protect, enforce or defend its right,
title and interest in or to any Confidential Materials, Intellectual Property or
other items described in Paragraph 6 hereof. If Employee shall fail or refuse to
execute or deliver to the Company any such document upon request, the Company
shall have, and is granted, the power and authority to execute the same in
Employee's name, as Employee's attorney-in-fact, which power is coupled with an
interest and irrevocable.

          (g)  The Company may assign this Agreement, Employee's services

                                      A-8
<PAGE>

hereunder or any of the Company's interests herein (i) to any Person which is a
party to a merger or consolidation with the Company, (ii) to any Affiliate of
the Company or (iii) to any Person acquiring substantially all of the assets of
the Company or the unit of the Company for which Employee is rendering services;
and, provided that any such assignee assumes the Company's obligations under
this Agreement, the Company shall thereupon be relieved of any and all liability
hereunder.  Employee shall not have the right to assign this Agreement or to
delegate any duties imposed upon Employee under this Agreement without the
written consent of the Company, and any such purported assignment or delegation
shall be void ab initio.
              -- ------

                   * * * * * * * * * * * * * * * * * * * * *

                                      A-9-48-
<PAGE>

===============================================================================

                        FIRST NORTHERN COMMUNITY BANCORP

                             2000 STOCK OPTION PLAN

===============================================================================

                                      -49-
<PAGE>

                                TABLE OF CONTENTS
                                -----------------

                                                                          Page
                                                                          ----

SECTION 1.        ESTABLISHMENT AND PURPOSE.................................1

SECTION 2.        DEFINITIONS...............................................1
         (a)      "Board of Directors.......................................1
         (b)      "Change in Control........................................1
         (c)      "Code.....................................................2
         (d)      "Committee................................................2
         (e)      "Company..................................................2
         (f)      "Employee.................................................2
         (g)      "Exchange Act.............................................2
         (h)      "Exercise Price...........................................2
         (i)      "Fair Market Value........................................2
         (j)      "ISO......................................................2
         (k)      "Nonstatutory Option......................................2
         (l)      "Option...................................................3
         (m)      "Optionee.................................................3
         (n)      "Outside Director.........................................3
         (o)      "Plan.....................................................3
         (p)      "Service..................................................3
         (q)      "Share....................................................3
         (r)      "Stock....................................................3
         (s)      "Stock Option Agreement...................................3
         (t)      "Subsidiary...............................................3
         (u)      "Total and Permanent Disability...........................3

SECTION 3.        ADMINISTRATION............................................3
         (a)      Committee Procedures......................................3
         (b)      Committee Responsibilities................................3

SECTION 4.        ELIGIBILITY...............................................5
         (a)      General Rule..............................................5
         (b)      Limitation On Grants......................................5
         (c)      Ten-Percent Shareholders..................................5
         (d)      Attribution Rules.........................................5
         (e)      Outstanding Stock.........................................5

SECTION 5.        STOCK SUBJECT TO PLAN.....................................5
         (a)      Basic Limitation..........................................5
         (b)      Additional Shares.........................................5

SECTION 6.        TERMS AND CONDITIONS OF OPTIONS...........................5
         (a)      Stock Option Agreement....................................5
         (b)      Number of Shares..........................................6
         (c)      Exercise Price............................................6
         (d)      Withholding Taxes.........................................6

                                      -i-

                                      -50-
<PAGE>

         (e)      Exercisability and Term...................................6
         (f)      Nontransferability........................................6
         (g)      Exercise of Options Upon Termination of Service...........6
         (h)      No Rights as a Stockholder................................7
         (i)      Modification, Extension and Renewal of Options............7
         (j)      Restrictions on Transfer of Shares........................7

SECTION 7.        PAYMENT FOR SHARES........................................7
         (a)      General Rule..............................................7
         (b)      Surrender of Stock........................................7

SECTION 8.        ADJUSTMENT OF SHARES......................................7
         (a)      General...................................................7
         (b)      Reorganizations...........................................7
         (c)      Reservation of Rights.....................................8

SECTION 9.        LEGAL AND REGULATORY REQUIREMENTS.........................8

SECTION 10.       NO EMPLOYMENT RIGHTS......................................8

SECTION 11.       DURATION AND AMENDMENTS...................................8
         (a)      Term of the Plan..........................................8
         (b)      Right to Amend or Terminate the Plan......................8
         (c)      Effect of Amendment or Termination........................9

SECTION 12.       EXECUTION.................................................9

                                      -ii-

                                      -51-
<PAGE>

                        FIRST NORTHERN COMMUNITY BANCORP
                             2000 STOCK OPTION PLAN

     SECTION 1. ESTABLISHMENT AND PURPOSE.
     ---------- --------------------------

     This Plan was established by First Northern Bank of Dixon (the "Bank") in
1997 Pursuant to an Agreement and Plan of Reorganization, as of May 19, 2000,
the Bank became a wholly owned subsidiary of First Northern Community Bancorp
(the "Company") and the Company assumed sponsorship of the Plan. The Company
hereby amends and restates the Plan to become the sponsor of the Plan and to
offer selected key employees of the Company and its subsidiaries an opportunity
to acquire a proprietary interest in the success of the Company and to increase
such interest, by purchasing shares of the Company's common stock. The Plan
provides for the grant of Options to purchase Shares. Options granted under the
Plan may include Nonstatutory Options as well as ISOs intended to qualify under
Code section 422.

     SECTION 2. DEFINITIONS.
     ---------- ------------

     (a) "Board of Directors" shall mean the Board of Directors of the Company,
          ------------------
as constituted from time to time.

     (b) "Change in Control" shall mean the occurrence of any of the following
          -----------------
events:

          (i) Approval by the shareholders of the Company of a merger or
     consolidation of the Company with or into another entity or any other
     corporate reorganization, if either:

               (A) The Company is not the continuing or surviving entity; or

               (B) More than 50% of the combined voting power of the Company's
          securities outstanding immediately after such merger, consolidation
          or other reorganization is owned by persons who were not shareholders
          of the Company immediately prior to such merger, consolidation or
          other reorganization;

          (ii) A change in the composition of the Board of Directors, as a
     result of which fewer than one-half of the incumbent directors are
     directors who either:

               (A) Had been directors of the Company 24 months prior to such
          change; or

               (B) Were elected, or nominated for election, to the Board of
          Directors with the affirmative votes of at least a majority of the
          directors who had been directors of the Company 24 months prior to
          such change and who were still in office at the time of the election
          or nomination; or

                                      -1-

                                      -52-
<PAGE>

          (iii) Any "person" (as such term is used in sections 13(d) and 14(d)
     of the Exchange Act) by the acquisition or aggregation of securities is or
     becomes the beneficial owner, directly or indirectly, of securities of the
     Company representing 25% or more of the combined voting power of the
     Company's then outstanding securities ordinarily (and apart from rights
     accruing under special circumstances) having the right to vote at
     elections of directors (the "Base Capital Stock"); except that any change
     in the relative beneficial ownership of the Company's securities by any
     person resulting solely from a reduction in the aggregate number of
     outstanding shares of Base Capital Stock, and any decrease thereafter in
     such person's ownership of securities, shall be disregarded until
     such person increases in any manner, directly or indirectly, such person's
     beneficial ownership of any securities of the Company.

     (c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
          ----

     (d) "Committee" shall mean the committee designated by the Board of
          ---------
Directors, which is authorized to administer the Plan under Section 3 hereof.
The Committee shall have membership composition which enables the Plan to
qualify under Rule 16b-3 with regard to the grant of Options or other rights
under the Plan to persons who are subject to Section 16 of the Exchange Act.

     (e) "Company" shall mean First Northern Community Bancorp, a California
          -------
corporation.

     (f) "Employee" shall mean any individual who is a common-law employee of
          --------
the Company or of a Subsidiary. "Employee" shall not include an individual who
is an Outside Director.

     (g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
          ------------
amended.

     (h) "Exercise Price" shall mean the amount for which one Share may be
          --------------
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.

     (i) "Fair Market Value" shall mean (i) the closing price of a Share on the
          -----------------
principal exchange which the Shares are trading, on the first trading day
immediately preceding the date on which the Fair Market Value is determined, or
(ii) if the Shares are not traded on an exchange but are quoted on the Nasdaq
National Market or a successor quotation system, the closing price on the first
trading day immediately preceding the date on which the Fair Market Value is
determined, or (iii) if the Shares are not traded on an exchange or quoted on
the Nasdaq National Market or a successor quotation system, the fair market
value of a Share, as determined by the Committee in good faith. Such
determination shall be conclusive and binding on all persons.

     (j) "ISO" shall mean an employee incentive stock option described in Code
          ---
section 422.

     (k) "Nonstatutory Option" shall mean an employee stock option that is not
          -------------------
an ISO.

                                      -2-

                                      -53-
<PAGE>

     (l) "Option" shall mean an ISO or Nonstatutory Option granted under the
          ------
Plan and entitling the holder to purchase Shares.

     (m) "Optionee" shall mean an individual who holds an Option.
          --------

     (n) "Outside Director" shall mean a member of the Board of Directors who is
          ----------------
not a common-law employee of the Company or of a Subsidiary.

     (o) "Plan" shall mean this First Northern Community Bancorp 2000 Stock
          ----
Option Plan, as amended from time to time.

     (p) "Service" shall mean service as an Employee.
          -------

     (q) "Share" shall mean one share of Stock, as adjusted in accordance with
          -----
Section 8 (if applicable).

     (r) "Stock" shall mean the Common Stock of the Company.
          -----

     (s) "Stock Option Agreement" shall mean the agreement between the Company
          ----------------------
and an Optionee which contains the terms, conditions and restrictions pertaining
to his Option.

     (t) "Subsidiary" shall mean any corporation, if the Company and/or one or
          ----------
more other Subsidiaries own not less than fifty percent (50%) of the total
combined voting power of all classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall be considered a Subsidiary commencing as of such date.

     (u) "Total and Permanent Disability" shall mean that the Optionee is unable
          ------------------------------
to work. Total and Permanent Disability shall be determined by the Company in
accordance with its Long Term Disability Plan.

     SECTION 3. ADMINISTRATION.
     ---------- ---------------

     (a) Committee Procedures. The Board of Directors shall designate one of the
         --------------------
members of the Committee as chairman. The Committee may hold meetings at such
times and places as it shall determine. The acts of a majority of the Committee
members present at meetings at which a quorum exists, or acts reduced to or
approved in writing by all Committee members, shall be valid acts of the
Committee.

     (b) Committee Responsibilities. Subject to the provisions of the Plan, the
         --------------------------
Committee shall have full authority and discretion to take the following
actions:

          (i)  To interpret the Plan and to apply its provisions;

          (ii) To adopt, amend or rescind rules, procedures and forms relating
     to the Plan;

                                      -3-

                                      -54-
<PAGE>

        (iii)  To authorize any person to execute, on behalf of the Company, any
     instrument required to carry out the purposes of the Plan;

         (iv)  To determine when Options are to be granted under the Plan;

          (v)  To select the Optionees;

          (vi) To determine the number of Shares to be made subject to each
     Option;

         (vii) To prescribe the terms and conditions of each Option, including
     (without limitation) the Exercise Price, the vesting or duration of the
     Option (including accelerating the vesting of the Option), to determine
     whether such Option is to be classified as an ISO or as a Nonstatutory
     Option, and to specify the provisions of the Stock Option Agreement
     relating to such Option;

        (viii) To amend any outstanding Stock Option Agreement, subject to
     applicable legal restrictions and to the consent of the Optionee who
     entered into such agreement;

          (ix) To prescribe the consideration for the grant of each Option
     under the Plan and to determine the sufficiency of such consideration;

          (x) To determine the disposition of each Option under the Plan in
     accordance with any domestic relations order in the event of an Optionee's
     divorce or dissolution of marriage;

         (xi) To determine whether Options under the Plan will be granted in
     replacement of other grants under an incentive or other compensation plan
     of an acquired business;

        (xii) To correct any defect, supply any omission, or reconcile any
     inconsistency in the Plan or any Stock Option Agreement; and

       (xiii) To take any other actions deemed necessary or advisable for the
     administration of the Plan.

Subject to the requirements of applicable law, the Committee may designate
persons other than members of the Committee to carry out its responsibilities
and may prescribe such conditions and limitations as it may deem appropriate,
except that the Committee may not delegate its authority with regard to the
selection for participation of or the granting of Options under the Plan to
persons subject to Section 16 of the Exchange Act. All decisions,
interpretations and other actions of the Committee shall be final and binding on
all Optionees and all persons deriving their rights from an Optionee. No member
of the Committee shall be liable for any action that he has taken or has failed
to take in good faith with respect to the Plan or any Option to acquire Shares
under the Plan.

                                      -4-

                                      -55-
<PAGE>

     SECTION 4. ELIGIBILITY.
     ---------- ------------

     (a) General Rule. Only Employees shall be eligible for designation as
         ------------
Optionees by the Committee. In addition, only individuals who are employed as
common-law employees by the Company or a Subsidiary shall be eligible for the
grant of ISOs.

     (b) Limitation On Grants. No Employee shall be granted Options to purchase
         --------------------
Shares during any fiscal year covering in excess of 25,000 Shares.

     (c) Ten-Percent Shareholders. An Employee who owns more than ten percent
         ------------------------
(10%) of the total combined voting power of all classes of outstanding stock of
the Company or any of its Subsidiaries shall not be eligible for the grant of an
ISO unless such grant satisfies the requirements of Code section 422(c)(5).

     (d) Attribution Rules. For purposes of Subsection (c) above, in determining
         -----------------
stock ownership, an Employee shall be deemed to own the stock owned, directly or
indirectly, by or for his brothers, sisters, spouse, ancestors and lineal
descendants. Stock owned, directly or indirectly, by or for a corporation,
partnership, estate or trust shall be deemed to be owned proportionately by or
for its shareholders, partners or beneficiaries.

     (e) Outstanding Stock. For purposes of Subsection (c) above, "outstanding
         -----------------
stock" shall include all stock actually issued and outstanding immediately after
the grant. "Outstanding stock" shall not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.

     SECTION 5. STOCK SUBJECT TO PLAN.
     ---------- ----------------------

     (a) Basic Limitation. Shares offered under the Plan shall be authorized but
         ----------------
unissued Shares. The aggregate number of Shares which may be issued under the
Plan upon exercise of Options shall not exceed 584,325 Shares, subject to
adjustment pursuant to Section 8. The number of Shares which are subject to
Options outstanding at any time under the Plan shall not exceed the number of
Shares which then remain available for issuance under the Plan. The Company,
during the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.

     (b) Additional Shares. In the event that any outstanding Option for any
         -----------------
reason expires or is canceled or otherwise terminated, the Shares allocable to
the unexercised portion of such Option shall again be available for the purposes
of the Plan.

     SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
     ---------- --------------------------------

     (a) Stock Option Agreement. Each grant of an Option under the Plan shall be
         ----------------------
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions which are not inconsistent with
the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.

                                      -5-

                                      -56-
<PAGE>

     (b) Number of Shares. Each Stock Option Agreement shall specify the number
         ----------------
of Shares that are subject to the Option and shall provide for the adjustment of
such number in accordance with Section 8. The Stock Option Agreement shall also
specify whether the Option is an ISO or a Nonstatutory Option.

     (c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
         --------------
Price. The Exercise Price of an ISO shall not be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant, except as
otherwise provided in Section 4(c). Subject to the preceding sentence, the
Exercise Price under any Option shall be determined by the Committee at its sole
discretion. The Exercise Price shall be payable in one of the forms described in
Sections 7(a) and (b).

     (d) Withholding Taxes. As a condition to the exercise of an Option, the
         -----------------
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that may
arise in connection with such exercise. The Optionee shall also make such
arrangements as the Committee may require for the satisfaction of any federal,
state or local withholding tax obligations that may arise in connection with the
disposition of Shares acquired by exercising an Option. An Optionee may satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Shares that otherwise would be issued
to him or her or by surrendering all or a portion of any Shares that he or she
previously acquired. Such Shares shall be valued at their Fair Market Value on
the date when taxes otherwise would be withheld in cash. Any payment of taxes by
assigning Shares to the Company may be subject to restrictions imposed by the
Committee.

     (e) Exercisability and Term. Options shall be exercisable within the times
         -----------------------
or upon the events determined by the Committee as set forth in the Stock Option
Agreement. Options shall become fully exercisable as to all Shares subject to
such Option in the event that a Change in Control takes place with respect to
the Company. Subject to the preceding sentence, the Committee at its sole
discretion shall determine when all or any installment of an Option is to become
exercisable and when the Option is to expire; provided, however that the term of
any ISO shall not exceed ten (10) years.

     (f) Nontransferability. During an Optionee's lifetime, his or her Option(s)
         ------------------
shall be exercisable only by him or her and shall not be transferable, unless
the Option agreement otherwise provides. In the event of an Optionee's death,
his or her Option(s) shall not be transferable other than by will, beneficiary
designation or by the laws of descent and distribution.

     (g) Exercise of Options Upon Termination of Service. Each Stock Option
         -----------------------------------------------
Agreement shall set forth the extent to which the Optionee shall have the right
to exercise the Option following termination of the Optionee's Service with the
Company and its Subsidiaries, and the right to exercise the Option of any
executors or administrators of the Optionee's estate or any person who has
acquired such Option(s) directly from the Optionee by beneficiary designation,
bequest or inheritance. Such provisions shall be determined in the sole
discretion of the Committee, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of Service.

                                      -6-

                                      -57-
<PAGE>

     (h) No Rights as a Stockholder. An Optionee, or a transferee of an
         --------------------------
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his Option until the date of the issuance of a stock certificate for
such Shares. No adjustments shall be made, except as provided in Section 8.

     (i) Modification, Extension and Renewal of Options. Within the limitations
         ----------------------------------------------
of the Plan, the Committee may cancel, modify, extend or renew outstanding
Options or may accept the cancellation of outstanding Options (to the extent not
previously exercised) in return for the grant of new Options at the same or a
different price. The foregoing notwithstanding, no modification of an Option
shall, without the consent of the Optionee, impair his rights or increase his
obligations under such Option.

     (j) Restrictions on Transfer of Shares. Any Shares issued upon exercise of
         ----------------------------------
an Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the applicable
Stock Option Agreement and shall apply in addition to any general restrictions
that may apply to all holders of Shares.

     SECTION 7. PAYMENT FOR SHARES.
     ---------- -------------------

     (a) General Rule. The entire Exercise Price of Shares issued under the Plan
         ------------
shall be payable in lawful money of the United States of America at the time
when such options are exercised, except as provided in Subsection (b) below.

     (b) Surrender of Stock. To the extent that a Stock Option Agreement so
         ------------------
provides, payment may be made all or in part with Shares which have already been
owned by the Optionee or his representative for more than the maximum number of
months required by the Committee and which are surrendered to the Company in
good form for transfer. Such Shares shall be valued at their Fair Market Value
on the date when the new Shares are purchased under the Plan.

     SECTION 8. ADJUSTMENT OF SHARES.
     ---------- ---------------------

     (a) General. In the event of a subdivision of the outstanding Stock, a
         -------
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization or a similar occurrence, the Committee shall make appropriate
adjustments in one or more of (i) the number of Shares available for future
grants under Section 5, (ii) the number of Shares covered by each outstanding
Option or (iii) the Exercise Price under each outstanding Option.

     (b) Reorganizations. In the event that the Company is a party to a merger
         ---------------
or other reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization. Such agreement may provide for the assumption of
outstanding Options by the surviving corporation or its parent or for their
continuation by the Company (if the Company is a surviving corporation);
provided, however, that if assumption or continuation of the outstanding Options
is not provided by such agreement then the Committee shall have the option of
offering

                                      -7-

                                      -58-
<PAGE>

the payment of a cash settlement equal to the difference between the amount
to be paid for one Share under such agreement and the Exercise Price, in all
cases without the Optionees' consent.

     (c) Reservation of Rights. Except as provided in this Section 8, an
         ---------------------
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any dividend or any other increase
or decrease in the number of shares of stock of any class. Any issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or Exercise Price of Shares subject to
an Option. The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

     SECTION 9. LEGAL AND REGULATORY REQUIREMENTS.
     ---------- ----------------------------------

     Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations and the regulations of any stock exchange on which the Company's
securities may then be listed, and the Company has obtained the approval or
favorable ruling from any governmental agency which the Company determines is
necessary or advisable.

     SECTION 10. NO EMPLOYMENT RIGHTS.
     ----------- ---------------------

     No provision of the Plan, nor any Option granted under the Plan, shall be
construed to give any person any right to become, to be treated as, or to remain
an Employee. The Company and its Subsidiaries reserve the right to terminate any
person's Service at any time and for any reason.

     SECTION 11. DURATION AND AMENDMENTS.
     ----------- ------------------------

     (a) Term of the Plan. The Plan, as set forth herein, shall become effective
         ----------------
as of the date set forth below, subject to the approval of the Company's
stockholders. In the event that the stockholders fail to approve the Plan within
twelve (12) months of its adoption by the Board of Directors, any Option grants
already made shall be null and void, and no additional Option grants shall be
made after such date. The Plan shall terminate automatically on February 27,
2007 and may be terminated on any earlier date pursuant to Subsection (b) below.

     (b) Right to Amend or Terminate the Plan. The Board of Directors may amend
         ------------------------------------
the Plan at any time and from time to time. Rights and obligations under any
Option granted before amendment of the Plan shall not be materially altered, or
impaired adversely, by such amendment, except with consent of the person to whom
the Option was granted. An amendment of the Plan shall be subject to the
approval of the Company's stockholders only to the extent required by applicable
laws, regulations or rules.

                                      -8-

                                      -59-
<PAGE>

     (c) Effect of Amendment or Termination. No Shares shall be issued or sold
         ----------------------------------
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Share previously issued or any Option previously
granted under the Plan.

     SECTION 12. EXECUTION.
     ----------- ----------

     To record the adoption of the Plan by the Board of Directors, the Company
has caused its authorized officer to execute the same as of May 18, 2000.

                        FIRST NORTHERN COMMUNITY BANCORP

                        By   /s/ Owen J. Onsum
                           --------------------------------

                        Its  President
                           --------------------------------

                                   -9-

                                  -60-

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