EXHIBIT 10.6

                               EMPLOYMENT CONTRACT

     AGREEMENT  made this 31st day of  December,  2001by and  between  COMMUNITY
BANKS,  INC., a  Pennsylvania  corporation,  ("Company")  and DONALD F. HOLT, an
adult individual (hereinafter referred to as "Executive").

     WHEREAS, the Company wishes to employ Executive, and Executive wishes to be
employed by Company,  as an Executive  Vice  President  and the Chief  Financial
Officer of Company and its subsidiary banks, upon the terms set forth below;

     NOW, THEREFORE,  in consideration of the agreements  hereinafter contained,
and intending to be legally bound hereby, the parties agree as follows:

          1. Length of  Employment.  Company  agrees to employ  Executive  for a
rolling term of two (2) years commencing as of December 31, 2001 (the "Effective
Date").  On  each  anniversary  date of the  Effective  Date,  the  term of this
Agreement  shall  automatically  renew and extend for an additional one (1) year
period unless either party shall have provided notice of its intent not to renew
within sixty (60) days prior to such  anniversary  date.  Upon the occurrence of
any Change in Control (as defined in  Paragraph  8), the term of this  Agreement
shall  automatically  renew  and be  extended  for two (2)  years  from the date
thereof.

          2. Position and Responsibilities. During the course of his employment,
Executive shall (i) perform the duties and responsibilities of an Executive Vice
President and Chief Financial  Officer of Company and its subsidiary banks, (ii)
perform such other senior  management  duties and respon sibilities as the Board
of  Directors  and CEO of Company  may direct,  and (iii) shall be afforded  the
title and privileges  associated with being at least an Executive Vice President
of the Company. For purposes of this Agreement, "Executive Vice President" shall
be deemed to include and refer to the title  "Managing  Director," as such title
is used for employee officers of the Company from time to time.

          3. Performance of Responsibilities, Loyalty.

               a. Executive shall devote his full time to the performance of his
responsibilities   hereunder.   Executive   shall  at  all   times   faithfully,
competently,  industriously  and to the best of his abilities perform all duties
necessary to carry out his responsibilities.

               b. Throughout the term hereof, Executive shall not at any time or
place,  either  directly  or  indirectly  engage in any  business or activity in
competition  with or adverse to the interests of Company or the subsidiaries and
affiliates of Company.

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          4. Compensation.

               a. Salary.  Company  shall pay to Executive  (i) a base salary of
not less  than  $135,000  during  calendar  year  2002 and  (ii)  provided  that
Executive  performed his duties for Company in a  professional  and  workmanlike
manner and in accordance  with this Agreement  during 2002, a base salary of not
less than  $150,000  during  calendar  year 2003.  This salary  shall be paid in
regular, substantially equal installments in accordance with the regular payroll
practices  of the Company,  less any and all  applicable  deductions  for taxes,
medical benefits, etc.

               b. Automobile  Expenses.  In addition to base salary,  during the
term of this  Agreement,  Company shall provide  Executive  with an  automobile,
including all related maintenance,  repairs,  insurance and other costs. In lieu
of providing Executive with an automobile,  Company may provide Executive with a
reasonable allowance on a monthly basis, which allowance shall cover Executive's
costs  associated with an automobile,  including  without  limitation,  lease or
installment payments, maintenance, repairs, insurance and other costs.

               c. Signing Bonus. Upon execution of this Agreement, Company shall
pay to Executive a lump sum of $15,000,  which amount shall be subject to normal
tax and other withholdings.

               d. 2002 Bonus.  Provided that  Executive has performed his duties
for Company in a professional and workmanlike manner and in accordance with this
Agreement  during 2002,  Company  shall pay Executive a bonus in January 2003 of
not less than  $20,000,  which  amount  shall be subject to normal tax and other
withholdings.

          5. Benefits.

               a.  Executive  shall be eligible to  participate  in all employee
benefit plans generally  available to executive  officers of Company,  including
without  limitation,  health and dental  insurance  plans,  group life insurance
plans,  retirement plans, incentive  compensation plans,  supplemental executive
retirement  plans and stock option,  grant or  appreciation  rights  plans.  The
participation  of Executive in each  benefit  plan  described in this  paragraph
shall be subject to the terms of the applicable plan and to procedures generally
applicable to Company  officers.  Nothing in this  paragraph  shall obligate the
Company to offer any such plans.


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               b. Executive shall be provided  holiday pay,  vacation,  personal
days, sick leave,  short-term  disability and long-term disability in accordance
with Company policy for officers of similar positions performing similar duties.

               c. The Company  shall pay the  reasonable  costs of  Executive to
attend continuing education seminars and banking conventions and meetings.

          6.  Relocation.  Company  shall  not,  without  the prior  consent  of
Executive,  transfer or relocate the office in which Executive performs the bulk
of his duties to any  location  more than  thirty  (30)  miles from  Harrisburg,
Pennsylvania without an increase in duties and responsibilities and commensurate
compensation.  In the event  Executive is so transferred  or relocated,  Company
shall  pay all  reasonable  out-of-pocket  expenses  incurred  by  Executive  in
connection  with such  relocation.  Company shall not require  Executive to move
from his residence.

          7. Termination of Employment.  This Agreement may be terminated during
the term hereof as follows:

               a. (i)   At any time by mutual agreement of Executive and
Company.

                  (ii)  If  this   Agreement   is   terminated   pursuant   to
subparagraph  (a)(i) of this  Paragraph  7,  neither  party  shall have  further
obligation or liability to the other  hereunder,  except that Executive shall be
entitled to accrued and unpaid salary.

               b. (i) By Company,  at any time for Cause.  "Cause" shall include
Executive's  personal dishonesty,  willful misconduct,  breach of fiduciary duty
involving personal profit,  incompetence,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations or offenses not involving  moral  turpitude),  final cease and desist
order of any government  agency having  jurisdiction  over Company,  or material
breach of this Agreement,  following  Company's  notice thereof to Executive and
Executive's failure to cure same within thirty (30) days of such notice.

                  (ii) If this Agreement is terminated  pursuant to subparagraph
(b)(i)  of this  Paragraph  7,  Company  shall  have no  further  obligation  or
liability to Executive  hereunder,  except that  Executive  shall be entitled to
accrued and unpaid salary.

               c. (i) Automatically,  if Executive is removed and/or permanently
prohibited from  participating  in the conduct of Company's  affairs by an order
issued by an  appropriate  regulatory  agency under  Section 8(e) of the Federal
Deposit Insurance Act, as amended, or any similar state or federal law.

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<PAGE>

                  (ii) If this Agreement is terminated  pursuant to subparagraph
(c)(i)  of this  Paragraph  7,  Company  shall  have no  further  obligation  or
liability  hereunder,  except  that  Executive  shall be entitled to accrued and
unpaid salary.

               d.  (i) By  Company  at any  time,  if in its sole  judgment  and
discretion the continued  employment of Executive  would no longer be beneficial
or desirable.

                  (ii) In the event that  Executive's  employment  is terminated
pursuant to this subparagraph (d)(i) of this Paragraph 7, Executive shall not be
obligated  to perform any  services  on behalf of Company  and Company  shall be
obligated  to  continue  Executive's  salary  and  those  benefits  set forth in
Paragraph  5(a)  hereof  for the  remaining  term of this  Agreement;  provided,
however,  that in no event  shall this  provision  obligate  Company to make any
further  increase  to  Executive's  salary  above his salary on the date of such
termination,  or continue  Executive's  participation  in any  incentive  compen
sation plan, or stock option,  grant or appreciation rights plan, or any similar
incentive based compensation plan.

                  (iii)  Notwithstanding the provisions of subparagraph  (d)(ii)
of this  Paragraph,  in the event  that  Executive's  employment  is  terminated
pursuant to  subparagraph  (d)(i) of this  Paragraph 7 subsequent to a Change in
Control, or the Company shall breach any provision of this Agreement  subsequent
to a Change in  Control,  Executive  may elect,  which  election  may be made in
Executive's sole discretion,  to receive from Company a single payment upon such
termination  amounting  to any  salary  to which  Executive  would  be  entitled
pursuant  to  subparagraph  (d)(ii),  such single  payment  being in lieu of the
payments  and  benefits  set  forth  in  subparagraph  (d)(ii).  As used in this
paragraph,  "Change in Control"  shall have the meaning  defined in  Paragraph 8
hereof.

               e. (i) By Executive upon a Change in Control.

                  (ii) In the event that  Executive  terminates  his  employment
pursuant to subparagraph  (e)(i) of this Paragraph 7, Company shall be obligated
to continue  Executive's  salary and those  benefits set forth in Paragraph 5(a)
hereof for the remaining term of this Agreement;  provided,  however, that in no
event shall this  provision  obligate  Company to make any  further  increase to
Executive's salary above his salary on the date of such termination, or continue
Executive's  participation in any incentive  compensation plan, or stock option,
grant or appreciation  rights plan, or any similar incentive based  compensation
plan.

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                  (iii) In the event that  Executive  terminates  his employment
pursuant to subparagraph  (e)(i) of this Paragraph 7, Executive may elect, which
election may be made in Executive's sole  discretion,  to receive from Company a
single payment upon such termination  amounting to any salary to which Executive
would be entitled pursuant to subparagraph (e)(ii), such single payment being in
lieu of the payments and benefits set forth in subparagraph (e)(ii).

               f. By Executive at any time,  upon thirty (30) days' prior notice
to  Company;  provided,  however,  that if this  Agreement  shall be  terminated
pursuant to this  subparagraph  (f) of this  Paragraph 7,  Company  shall not be
further  obligated  or liable  under this  Agreement,  except for the payment of
accrued and unpaid salary.

          8.  Definition of Change of Control.  For purposes of this  Agreement,
the term "Change of Control" shall mean:

               a. An  acquisition by any "person" or "group" (as those terms are
defined or used in Section 13(d) of the Exchange Act, as enacted and in force on
the date  hereof) of  "beneficial  ownership"  (within the meaning of Rule 13d-3
under  the  Exchange  Act,  as  enacted  and in  force on the  date  hereof)  of
securities of Company  representing  24.99% or more of the combined voting power
of Company's securities then outstanding;

               b.  The   consummation  of  a  merger,   consolidation  or  other
reorganization  of Company,  except where  shareholders  of Company  immediately
prior  to  consummation  of any  such  transaction  continue  to hold as least a
majority of the voting power of the outstanding  voting  securities of the legal
entity  resulting from or existing after any  transaction  and a majority of the
members of the Board of Directors of the legal entity resulting from or existing
after a transaction are former members of Company's Board of Directors;

               c.  A  sale,   exchange,   transfer  or  other   disposition   of
substantially  all of the  assets of Company  to  another  entity,  except to an
entity  controlled,  directly or indirectly,  by Company or a corporate division
involving Company;

               d.  The  consummation  of  a  contested  proxy   solicitation  of
Company's  shareholders  that  results in the  contesting  party  obtaining  the
ability to cast  twenty-five  percent (25%) or more of the votes  entitled to be
cast in an election of directors of Company.

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          9. Suspension. If Executive is suspended and/or temporarily prohibited
from participating in the conduct of the Company's affairs by a notice served in
accordance  with  law  by  an  appropriate   regulatory  agency,  the  Company's
obligations  under this Agreement  shall be suspended as of the date of service,
unless  stayed by  appropriate  proceedings.  If the  charges  in the notice are
dismissed,  Company  shall (i) pay Executive  all of the  compensation  withheld
while its contract  obligations  were  suspended  and (ii)  reinstate any of its
obligations which were suspended.

          10.  Death or  Disability.  In the event that  Executive  is  rendered
unable  to  complete  the  terms of this  Agreement  due to death or  disability
continuing in excess of ninety (90) days, this Agreement shall be terminated and
Company  shall  have  no  further  liability,  obligations  or  responsibilities
hereunder except as set forth in Paragraph 5(b) hereof.

          11.  Covenant Not to Compete.  In the event  Executive  terminates his
employment with Company pursuant to Paragraph 7(f), he agrees that, for a period
of one (1) year  following  such  termination,  he shall not (i)  solicit any em
ployees or officers of Company or its affiliates and subsidiaries  (collectively
referred to as "Company"  for purposes of this  paragraph)  to leave  Company to
accept  employment by Executive or his new  employer;  or (ii) solicit or encour
age any customers of Company to cease doing  business with the Company and/or to
transfer any or all of their business  relationships  to any  institution  which
Executive may found or to Executive's new employer.

          12. Entire  Agreement.  This  Agreement  shall  constitute  the entire
agreement between the parties and no prior promises,  agreements or warran ties,
verbal or written, shall be of any force unless embodied herein. No modification
of this Agreement  shall be of any force or effect unless reduced to writing and
signed by both parties.

          13. Miscellaneous.

               a. This Agreement  shall be binding upon and inure to the benefit
of the parties hereto, their respective heirs, successors and assigns.

               b. This  Agreement  shall not be  modified  or changed in any way
except by a written agreement signed by the parties hereto.

               c.  No  waiver  by any  party  hereto  of any  provision  of this
Agreement shall be deemed a waiver of said provision or any other  provisions of
this Agreement.

               d. This Agreement shall be interpreted, construed and governed in
accordance with the laws of the Commonwealth of Pennsylvania.  The invalidity or
unenforceability  of any  provision  of this  Agreement  shall  not  affect  the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.

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                  IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first written above.


ATTEST:                                               COMMUNITY BANKS, INC.

   /S/  Patricia E. Hoch                      By:    /S/ Eddie L. Dunklebarger
----------------------------------          ------------------------------------
                                                         Eddie L. Dunklebarger
                                                           President and CEO

WITNESS:

     /S/ Patricia E. Hoch                           /S/ Donald F. Holt
-----------------------------------         ------------------------------------
                                                        Donald F. Holt


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