CITIZENS & NORTHERN CORP
EX-10.1
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<TYPE>EX-10.1
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<DESCRIPTION>EX-10.1
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 10.1</B>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="l36450al3645000.gif" alt="(CITIZENS &#038; NORTHERN CORPORATION LOGO)">
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<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">CITIZENS &#038; NORTHERN CORPORATION<BR>
<B>INDEPENDENT DIRECTORS STOCK INCENTIVE PLAN</B>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>STOCK OPTION AGREEMENT</B>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A <B><I>STOCK OPTION </I></B>for a total of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> <B>shares </B>of common stock, par value $1.00, of Citizens &#038;
Northern Corporation, a Pennsylvania business corporation (herein the &#147;Corporation&#148;) is hereby
granted as of January&nbsp;5, 2009 to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U> (herein the &#147;Director&#148;), subject in all respects to
the terms and provisions of Citizens &#038; Northern Corporation Independent Stock Incentive Plan
(herein the &#147;Plan&#148;), dated April&nbsp;17, 2001, which has been adopted by the Corporation&#146;s shareholders
and which is incorporated herein by reference. The option price as determined under paragraph 8 of
the Plan is <B>Nineteen </B>and <B>88/100 </B>(<B>$19.88</B>) Dollars per share. The option is fully vested.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Option may not be exercised more than ten (10)&nbsp;years from the date of its grant, and may
be exercised during such term only in accordance with the terms of the Plan.
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>RESTRICTED STOCK AGREEMENT</B>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A total of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> <B>shares </B>of
<B><I>RESTRICTED </I></B>common <B><I>STOCK</I></B>, par value $1.00, of Citizens &#038; Northern
Corporation, a Pennsylvania business corporation (herein the &#147;Corporation&#148;) is hereby awarded as of
January&nbsp;5, 2009 to
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U> (herein the &#147;Director&#148;), subject in all respects to the terms and
provisions of Citizens &#038; Northern Corporation Independent Stock Incentive Plan (herein the &#147;Plan&#148;),
dated April&nbsp;17, 2001, which has been adopted by the Corporation&#146;s shareholders and which is
incorporated herein by reference.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These shares cannot be sold, exchanged, transferred, pledged or otherwise disposed of, except
in accordance with the Plan. These transferability restrictions will lapse as follows: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares
on January&nbsp;5, 2010; <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares on January&nbsp;5, 2011; and
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> shares on January&nbsp;5, 2012.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Provisions Applicable To Both Stock Option And<BR>
Restricted Stock Agreements</B>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Awards (Options and Restricted Stock) issued under the Plan which have not fully vested
(i.e., continue to have restrictions that have not lapsed) shall automatically fully vest (i.e.,
all restrictions shall lapse) upon a change in control event as follows:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">(a)&nbsp;If the Corporation or its stockholders execute an agreement to dispose of all or
substantially all of the Corporation&#146;s assets or capital stock by means of sale,
merger, consolidation, reorganization, liquidation or otherwise, as a result of which
the Corporation&#146;s stockholders as of immediately before such transaction will not own
at least fifty percent (50%) of the total combined voting power of all classes of
voting capital stock of the surviving entity (be it the Corporation or otherwise)
immediately after the consummation of such transaction, thereupon any and all Awards
immediately shall become and remain exercisable with respect to the total number of shares of Stock
still subject thereto for the remainder of their respective terms
until the consummation of such transaction, or if not consummated, until the agreement
therefore expires or is terminated, in which case thereafter all Awards shall be
treated as if said agreement never had been executed; (b)&nbsp;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&#146;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
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">has not been duly approved by the Board; or (c)&nbsp;if during
any period of two (2)&nbsp;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.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">In the case of an event specified in clause (a)&nbsp;of the foregoing sentence,
the full lapse of any restrictions on shares of Restricted Stock shall occur
immediately prior to the consummation of the described transaction and any
Options that vest as a result of execution of the described agreement shall
remain fully vested upon consummation thereof; and in the case of an event
specified in clause (b)&nbsp;or (c)&nbsp;of the foregoing sentence, the full vesting and
lapse shall occur upon occurrence of the described event.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dated:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>, 20<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>

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    <TD colspan="3" valign="top" align="left">CITIZENS &#038; NORTHERN CORPORATION</TD>
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    <TD align="left" valign="top">BY</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">ATTEST:
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    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Craig G. Litchfield
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman, President &#038;</TD>
    <TD>&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><br><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Jessica
R. Brown
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    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Corporate Secretary</DIV></TD>
    <TD>&nbsp;</TD>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Director acknowledges receipt of a copy of the Plan, and represents that he or she is
familiar with the terms and provisions thereof. The Director hereby accepts this Option and Award
subject to all the terms and provisions of the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dated:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
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