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                                                                   EXHIBIT 10.16


                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
                                       OF
                               COMMONWEALTH BANK

                     (As amended effective January 1, 1998)


                             Purpose and Background

                 The purpose of the Commonwealth Bank Supplemental Executive
Retirement Plan (formerly the Commonwealth Federal Savings Bank Supplemental
Executive Retirement Plan) is to provide those officers of Commonwealth Bank
listed in Appendix A attached hereto with supplemental retirement benefits that
will assist them in maintaining an accustomed standard of living.

                 The Plan is an unfunded plan maintained for the purpose of
providing deferred compensation for selected officers of the Bank, each of whom
is a member of a select group of management or highly compensated employees for
purpose of Title I of the Employee Retirement Income Security Act of 1974, as
amended.

                 The Plan was originally adopted effective January 1, 1994.  In
1997, Commonwealth Bank made the following changes to its tax-qualified benefit
programs: (1) adopted the Commonwealth Bank Target Benefit Plan effective
January 1, 1997; (2) amended the Commonwealth Bank Voluntary Investment Plan
to add matching contributions and profit sharing contributions effective July
1, 1997; and (3) terminated the Commonwealth Bank Pension Plan effective June
1, 1997.  Commonwealth Bank wishes to amend the Commonwealth Bank Supplemental
Executive Retirement Plan to reflect these changes.

                 Accordingly, Commonwealth Bank hereby adopts the Plan as
amended effective January 1, 1998, pursuant to the terms and provisions set
forth below:

                                   ARTICLE 1

                                  Definitions

                 For purposes hereof, unless otherwise clearly apparent from
the context, the following phrases and terms shall have the indicated meanings:

                 "Accrued Benefit" shall mean a Participant's Target SERP
Benefit, multiplied by a factor, no greater than one, the numerator of which is
his or her Years of  Participation and the denominator of which is 15.

                 "Actuarial Equivalent" or "Actuarially Equivalent" shall mean
an amount or a series of payments  that, at a given point in time, is
determined to have the same or equivalent
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value, at that point in time, as another given amount or another given series
of payments, taking into consideration the time value of money, mortality and
such other actuarial factors as may be appropriate.

                 "Board" shall mean the Board of Directors of Commonwealth
Bank.

                 "Cause" is defined in Section 6.3 of this Plan.

                 "Change of Control" is defined in Article 10 of this Plan.

                 "Committee" shall mean the administrative committee appointed
to manage and administer this Plan in accordance with the provisions of
Article 13.

                 "Company" shall mean Commonwealth Bank and any of its
subsidiaries that are selected by the Board to participate in this Plan.

                 "Considered Compensation" shall mean the total of all payments
made to a Participant on account of employment with the Company for services
rendered, including any amounts of salary that the Participant may from time to
time elect to defer under the Company's Voluntary Investment Plan (or any
similar successor plan or plans) or under any cafeteria plan (within the
meaning of Section 125 of the Internal Revenue Code of 1986, as amended) or any
nonqualified deferred compensation plan from time to time maintained by the
Company, but excluding:

                          (a)     Payments arising from any stock bonus, stock 
option, stock appreciation rights or restricted stock plan;

                          (b)     Contributions to and payments from any 
qualified or nonqualified employee benefit plan of the Company (except as 
provided above); and

                          (c)     Cost of living differentials, and automobile 
allowances.

Considered Compensation in a particular period shall include salary payments
actually received in that period as well as any amounts of salary that would
have been received in that period had payment not been deferred through
participation in the Company's Voluntary Investment Plan (or any similar
successor plan or plans) or in a cafeteria plan or nonqualified deferred
compensation plan of the Company.

                 "Disability" shall mean a condition which qualifies for
receipt of disability income payments under the Disability Plan.

                 "Disability Offset Amount" shall mean the sum of the
following:





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                          (d)     The annual amount of any disability 
income payments received by a Participant or his or her family members under 
the Social Security Act; and

                          (e)     The  annual amount of disability income 
payments received by the Participant under the Disability Plan.

                 "Disability Plan" shall mean the long-term disability plan of
the Company, if any, as now or hereafter amended, including any similar
successor plan.

                 "Early Retirement Date" shall mean the first day of the month
coincident with or next following the date on which the Participant has both
attained age 55 and completed at least ten (10) Years of Vesting Service.

                 "Final Average Earnings" shall mean the average of the highest
annual  Considered Compensation received by a Participant during the five
consecutive calendar years out of the current and  preceding ten calendar years
during which his considered Compensation was the highest.  At any point in
time, Final Average Earnings shall be computed to the date of determination by
taking into account actual Considered Compensation during the current calendar
year  (without annualization) and the ten preceding calendar years.

                 "Normal Retirement Date" shall mean the first day of the month
following the month in which a Participant attains age 65.

                 "Participant" shall mean an executive of the Company
designated by the Committee and approved by the Board of Directors of the
Company who is a member of a select group of management or highly compensated
employees within  the  meaning  of section 201(2) of the Employee Retirement
Income Security Act of 1974, as amended.

                 "Pension Plan" shall mean Commonwealth Bank Pension Plan.

                 "Plan" shall mean this Commonwealth Bank Supplemental
Executive Retirement Plan.

                 "Plan Year" shall mean the 12-consecutive-month period ending
December 31 of each year.

                 "Retirement Offset Amount" shall mean the sum of:

                 (a)  the Participant's accrued benefit under the Pension Plan
as of June 1, 1997, if any, as listed on Appendix A; and





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                 (b)  the Actuarially Equivalent value of the Participant's
vested account balance under the Target Benefit Plan, expressed as an annual
benefit payable in the form of a single life annuity beginning at the
Participant's Normal Retirement Date; and

                 (c)  the Actuarially Equivalent value of the Participant's
vested account balance under the Voluntary Investment Plan attributable to
matching contributions and profit sharing contributions, expressed as an annual
benefit payable in the form of a single life annuity beginning at the
Participant's Normal Retirement Date.

                 "Substantial Cause" is defined in Section 10.4 of this Plan.

                 "Target Benefit Plan" shall mean the Commonwealth Bank Target
Benefit Plan, as now or hereafter amended.

                 "Target SERP Benefit" shall mean, with respect to a
Participant, the amount described in Appendix A.

                 "Trust" shall mean the Deferred Compensation Trust Agreement
of  Commonwealth Bank.

                 "Vested Amount" shall mean the percentage of a Participant's
Accrued Benefit  which, subject to Section 6.2, is nonforfeitable.  The Vested
Amount with respect to a Participant who has completed five Years of Service or
who has attained age 65 shall be 100%. Except as otherwise provided in Article
10 (regarding a Change of Control), the Vested Amount of a Participant who has
not completed five Years of Service or attained age 65 shall be 0%.  If the
Participant has attained age 65, the Vested Amount will be 100%.

                 "Voluntary Investment Plan" shall mean the Commonwealth Bank
Voluntary Investment plan, as now or hereafter amended.

                 "Years of Participation" shall mean the sum of (1) the
Participant's "Years of Participation" as defined in Section 2.3 of the Pension
Plan as of June 1, 1997, including years prior to the effective date of this
Plan, plus (2) the number of calendar plan years for which the Participant's
account under the Target Benefit Plan receives an allocation of a Company
contribution under Section 4.2 of the Target Benefit Plan or the Participant's
account under the Voluntary Investment Plan receives an allocation of a
nonelective contribution under Section 4.3 of the Voluntary Investment Plan;
provided, however, that Years of Participation credited during a Participant's
Disability shall be determined pursuant to Section 4.3 of this Plan.

                 "Year of Service" shall mean "Year of Vesting Service" as
defined in Section 2.3 (or any successor thereto) of the Target Benefit Plan,
and shall include years prior to the effective date of this Plan; provided,
however, that Years of  Service credited during  a Participant's Disability
shall be determined pursuant to Section 4.3 of this Plan.





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                                   ARTICLE 2

                                 Participation

                 2.1.     Participation.  Upon nomination by the Board of
Directors of the Company and approval by the Committee, an executive of the
Company shall become a Participant effective as of the date specified in the
nomination document.

                                   ARTICLE 3

                                   Retirement

                 3.1.     Normal Retirement Benefit.  Except as provided in
Section 6.2 upon retirement from the Company at or after his or her Normal
Retirement Date, a Participant shall be entitled to receive an annual
retirement benefit equal to his or her Accrued Benefit as of the date of
retirement reduced by the Retirement Offset Amount.

                 3.2.     Early Retirement Benefit.  Except as provided in
Section 6.2, a Participant who retires on or after his or her Early Retirement
Date but prior to his or her Normal Retirement Date shall be entitled to
receive an annual benefit commencing on his or her Normal Retirement Date equal
to the Vested Amount of his or her Accrued Benefit as of the date of the
Participant's retirement, reduced by the Retirement Offset Amount.  If,
pursuant to Section 3.3, the Participant's benefit commences prior to his or
her Normal Retirement Date, the Participant's benefit payable at the earlier
date shall be the Actuarial Equivalent of the benefit payable at his or her
Normal Retirement Date.

                 3.3.     Form and Time of Retirement Payments Pursuant to
Articles 3 and 6.

                          (a)     Form of Payment. Unless a Participant elects
an alternate method of payment before his or her separation from service, the
automatic form of payment of benefits pursuant to Articles 3 and 6 shall be (i)
for a Participant who is unmarried on his benefit commencement date, a single
life annuity in an annual amount equal to the annual benefit determined
pursuant to Section 3.1, 3.2 or 6.1, as applicable, and (ii) for a Participant
who is married on his or her benefit commencement date, a joint and 50%
survivor annuity that is the Actuarial Equivalent of the single life annuity
that the Participant would have received had he or she been unmarried.  A
Participant may elect, before his or her separation from service, not to
receive his or her benefit in the automatic form, but to have his or her
benefit paid in a single cash payment that is the Actuarial Equivalent of the
automatic form of benefit otherwise payable to the Participant.

                          (b)     Time of Payment.  Annuity payments shall be
made in equal monthly installments commencing effective as of the first month
following retirement or termination.  The single cash payment, if elected,
shall be paid within 90 days following the





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Participant's separation from service.  Neither annuity payments nor the single
cash payment shall be adjusted on account of a Participant's deferral of
retirement past his or her Normal Retirement Date, except to the extent such
adjustment results from changes in a Participant's Final Average Earnings.  The
Company may withhold from any payment, any income tax or other amounts as
required by law.

                                   ARTICLE 4

                                   Disability

                 4.1.     Disability Benefit.  If a Participant suffers a
Disability after his or her Early Retirement Date but prior to his or her
Normal Retirement Date for which he or she receives disability income payments
under the Disability Plan, the Participant shall be entitled to receive an
annual disability benefit under this Plan equal to 50% of the Participant's
Final Average Earnings, as of the date of onset of the Disability, reduced by
the Disability Offset Amount.

                 4.2.     Form and Duration of Disability Payment.  The annual
disability benefit  under Section 4.1 shall be payable in equal monthly
installments commencing with the month in which payments commence under the
Disability Plan and continuing  until the earliest of the following dates:

                          (a)     The date the Participant returns to active
employment with either the Company or another employer;

                          (b)     The date that disability income payments
cease under the Disability Plan; or

                          (c)     The Participant's Normal Retirement Date or
date of death.

                 4.3.     Benefits on Cessation of Disability Payments.  After
a Participant's disability benefits cease pursuant to Section 4.2, the
Participant shall be entitled to benefits under this Plan determined as
follows:

                          (a)     If the Participant's disability benefits
cease because the Participant returns to active employment with the Company, or
if they cease pursuant to Section 4.2(b) and the Participant returns to active
employment with the Company within six (6) months following such cessation,
then (i) the Participant shall be credited with Years of Service and Years of
Participation for the period during which disability benefits were provided
under this Plan; and (ii) the Participant shall thereafter be entitled to
receive such benefits, if any, as are available under the other provisions of
this Plan.





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                          (b)     If the Participant's disability benefits
cease because the Participant returns to active employment with another
employer, or if they cease pursuant to Section 4.2(b) and the Participant does
not return to active employment with the Company within six (6) months
following such cessation, then (i) the Participant shall, for purposes of this
Plan, be considered to have terminated employment as of the date of onset of
his or her Disability and shall be credited with no further Years of Service or
Years of Participation after that date; and (ii) the Participant shall
thereafter be entitled to receive such benefits, if any, as are available under
the other provisions of this Plan.

                          (c)     If the Participant's disability benefits
cease because the Participant reaches his or her Normal Retirement Date or
dies, then (i) the Participant shall be credited with Years of Service and
Years of Participation for the period during which disability benefits were
provided under this Plan; and (ii) the Participant shall be entitled to receive
the benefit specified in Section 3.1, as if he or she had retired on that date,
or the Participant's spouse shall be entitled to receive any death benefit
specified in Section 5.1 or 5.2, as the case may be. Such benefit shall be
computed as of the Participant's Normal Retirement Date or date of death, as
the case may be, based on the Participant's Final Average Earnings as of the
date of onset of the Participant's Disability, without reduction for disability
benefits paid under this Plan. Such benefit shall be paid at the time and in
the annuity form specified in Section 3.3, 5.l or 5.2, as the case may be,
except that, in the case of payments pursuant to Section 3.3, if any Disability
Offset Amounts continue to be paid following the Participant's Normal
Retirement Date, the annuity payments shall be offset by such amounts so long
as they continue to be paid.

                 4.4.     Disability After Normal Retirement Date.  If a
Participant suffers a Disability after his or her Normal Retirement Date but
prior to actual retirement, the Participant shall be deemed to have retired as
of the date of onset of the Disability and shall thereafter be entitled to
receive the benefit specified in Section 3.1.  Such benefit shall be computed
as of the Participant's deemed date of retirement.  Such benefit shall be paid
at the time and in the annuity form specified in Section 3.3, except that, if
any Disability Offset Amounts are paid following the Participant's deemed
retirement, the annuity payments shall be offset by such amounts so long as
they continue to be paid.

                 4.5.     Disability Prior to Early Retirement Date.  A
Participant who suffers a Disability prior to his or her Early Retirement Date
shall not be entitled to receive any disability benefit under this Plan.

                                   ARTICLE 5

                                 Death Benefit

                 5.1.     Death After Early Retirement Date.  If a Participant
dies after his or her Early Retirement Date but before receiving any benefits
under Article 3 of this Plan, then, if the Participant has a surviving spouse
to whom the Participant was married for at least 12 months





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prior to the Participant's death, such spouse shall be entitled to receive an
annual benefit, payable in equal monthly installments for the remainder of his
or her life, equal to 50% of the annual retirement benefit that the Participant
would have been entitled to receive under Section 3.2 (if the Participant dies
prior to his or her Normal Retirement Date) or Section 3.1 (if the Participant
dies on or after his or her Normal Retirement Date) if the Participant had
retired immediately prior to his or her death and such benefit had been paid
pursuant to Section 3.3 in the form of a 50% joint and survivor annuity.  If a
Participant dies after his or her Early Retirement Date and before receiving
any benefits under Article 3 of this Plan, but the Participant does not have a
surviving spouse to whom the Participant was married for at least 12 months
prior to the Participant's death, no benefit shall be payable under this Plan
to any person on account of the death of the Participant.

                 5.2.     Death On or Before Early Retirement Date.  If a
Participant dies on or before his or her Early Retirement Date, but before
receiving any benefits under Article 6 of this Plan, then, if the Participant
has a surviving spouse to whom the Participant was married for at least 12
months prior to the Participant's death, such spouse shall be entitled to
receive an annual benefit, payable in equal monthly installments for the
remainder of his or her life, equal to 50% of the annual retirement benefit
that the Participant would have been entitled to receive under Section 6.1 if
the Participant had separated from service immediately prior to his or her
death, retired on his or her Early Retirement Date with an immediate joint and
50% survivor annuity  pursuant to Section 3.3, and died on the day after his or
her Early Retirement Date.  If a Participant dies on or prior to his or her
Early Retirement Date and before receiving any benefits under Article 6 of this
Plan, but the Participant does not have a surviving spouse to whom the
Participant was married for at least 12 months prior to the Participant's
death, no benefit shall be payable under this Plan to any person on account of
the death of the Participant.

                 5.3.     Time of Payment of Death Benefit.  Any benefits
payable under Article 5 shall be paid to the Participant's spouse commencing at
the same time as benefits commence under Section 9.5 (or any successor thereto)
of the Target Benefit Plan.

                                   ARTICLE 6

                           Termination of Employment

                 6.1.     Termination Prior to Early Retirement Date.  Except
as provided in Sections 6.2 and 10.2, a Participant who terminates employment
with the Company prior to his or her Early Retirement Date for a reason other
than death or Disability shall be entitled to receive an annual benefit
commencing on his or her Normal Retirement Date equal to the Vested Amount of
his or her Accrued Benefit as of the date of termination from employment,
reduced by the Retirement Offset Amount.  If, pursuant to Section 3.3, the
Participant's benefit commences prior to his or her Normal Retirement Date, the
Participant's annual benefit shall be the Actuarial Equivalent of his or her
annual benefit payable at Normal Retirement Date.  The time and form of payment
of the annual benefit shall be determined under Section 3.3.





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                 6.2.     Termination With Cause.  If the Company terminates a
Participant's employment with Cause, then, except as expressly provided in
Section 10.2 below, the Participant shall not thereafter be entitled to any
benefits under this Plan.

                 6.3.     Definition of Cause.  As used in this Article 6 and
in Section 9.3 below, the term "Cause" shall include, without limitation,
significant deficiencies in the Participant's performance, disloyalty, fraud,
violation of any federal or state law involving the commission of a crime
against the Company, commission of a felony, or commission of a gross
misdemeanor which is determined by the Committee, in its sole and absolute
discretion, to be of such gravity as to cause significant injury to the
Company's business or reputation.

                                   ARTICLE 7

                         Company/Participant Liability

                 7.1.     General Assets.  Amounts payable to a Participant
shall be paid from the general assets of the Company exclusively.  However, the
Company has established the Trust to which the Company may make contributions
in order to provide for the payment of benefits under the Plan.
Notwithstanding the foregoing, Trust assets shall be treated as assets of the
Company and shall remain subject to the claims of the general creditors of the
Company.

                 7.2.     Company's Liability.  The Company's liability for the
payment of benefits shall be defined only by this Plan.

                 7.3.     Limitation of Obligation.  Except as expressly
provided for in this Plan, the Company shall have no obligation under this Plan
to a Participant or his or her spouse, if any.

                 7.4.     Participant Cooperation.  A Participant must at all
times cooperate with the Company and the Committee and furnish all information
requested by the Company or the Committee in order to facilitate the
determination of benefits or the administration of this Plan. Such cooperation
shall include, without limitation, taking a physical or mental examination if
so requested by the Company or the Committee.  If a Participant fails promptly
to cooperate or furnish requested information, the Committee, in its sole and
absolute discretion, may withhold benefits from the Participant.

                 7.5.     Unsecured General Creditor.  A Participant and his or
her spouse, if any, shall not have, by reason of this Plan, any legal or
equitable rights, claims or interests in any property or assets of the Company
nor shall they be beneficiaries of, or have any legal or equitable rights,
claims or interest in the life insurance policies or annuities or the proceeds
therefrom owned, or which may be acquired, by the Company.  Any and all of the
Company's assets shall be, and remain, the general, unpledged unrestricted
assets of the Company.  The





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Company's obligations under this Plan shall be merely those of an unfunded and
unsecured promise of the Company to pay money in the future.

                                   ARTICLE 8

                           No Guarantee of Employment

                 8.1.     No Guarantee of Employment.  Nothing in this Plan
shall alter in any manner the employment relationship with a Participant.

                                   ARTICLE 9

                         Plan Amendment and Termination

                 9.1.     Amendment.  The Company may amend this Plan at any
time so long as the rights required to be preserved on termination under
Section 9.2 are not reduced.  No amendment of this Plan or waiver of any of
the specific provisions of this Plan shall be valid unless made pursuant to a
duly executed written document.

                 9.2.     Termination.  Subject to Article 10, the Company may
terminate this Plan at any time, for any reason, as follows:

                          (a)     Termination shall be by notice to the
Committee, which shall notify Participants of the termination.  The effective
date of the termination shall not be earlier than the first day of the month in
which notice is given.

                          (b)     After the effective date of termination, no
further executives shall be selected for participation and no further benefits
shall accrue for existing Participants.

                          (c)     In the event of termination, the retirement
benefits of each existing Participant shall be paid at the time and in the
amount and form specified under the terms of this Plan as in effect on the day
before termination, except that the Participants' respective Accrued Benefits
and Vested Amounts shall be based on their Final Average Earnings, Years of
Service and Years of Participation as of the effective date of Plan
termination.  Notwithstanding the foregoing, the Company shall be entitled to
provide retirement benefits in any alternative form that is the Actuarial
Equivalent of the form in which the retirement benefits were payable under the
terms of this Plan in effect before termination.

                          (d)     Unless otherwise expressly provided at the
time of termination of the Plan, no Participant shall be entitled to any
benefit under this Plan on account of any Disability that commences following
the effective date of Plan termination.





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                                   ARTICLE 10

                               Change of Control

                 10.1.    Change of Control.  For purposes of this Plan, the
term "Change of Control" means:

                          (a)     The acquisition by any person or entity of
the power, directly or indirectly, to exercise a controlling influence over the
management or policies of the Company (either alone or pursuant to an
arrangement or understanding with one or more other persons or entities),
whether through ownership of voting securities, through one or more
intermediaries, by contract, or otherwise;  or

                          (b)     The acquisition by any person or entity
(either alone or pursuant to  an arrangement or understanding with one or more
other persons or entities) of the ownership of or power to vote twenty-five
percent (25%) or more of the outstanding voting securities of the Company.

                 10.2.    Termination of Employment Following a Change of
Control.  If, during the three-year period following a Change of Control, the
employment of a Participant terminates prior to his or her Normal Retirement
Date (whether before or after his or her Early Retirement Date), then, except
as provided in the last sentence of this Section 10.2, the Participant shall be
deemed to have retired under the provisions of this Plan, as of his or her date
of termination, and shall be entitled to receive a retirement benefit in an
annual amount equal to the Participant's Target SERP Benefit (with the Target
SERP Benefit to be determined based on the Final Average Earnings of the
Participant as of the date of termination), reduced by the Retirement Offset
Amount.  Such retirement benefit shall be paid in accordance with the
provisions of Section 3.3 of this Plan commencing effective as of the first
month following the Participant's termination.  No benefits shall be payable
under this Section 10.2 if the Participant voluntarily terminates his or her
employment (unless such employment has been constructively terminated within
the meaning of Section 10.3 and the Participant terminates within six (6)
months thereafter following written notice to the Company of the reason for
such termination), if the Company terminates the Participant's employment for
Substantial Cause, or if the Participant's employment terminates on account of
Disability or death.

                 10.3.    Constructive Termination of Employment.  A
Participant's employment  shall be deemed to be constructively terminated if:

                          (a)     The Participant's salary is either reduced by
more than ten percent, or not increased for a period of two years, unless the
salaries of all other Participants and officers of the Company are reduced in
equal proportions or are not increased during the same period;





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                          (b)     The title, duties or responsibilities of the
Participant's job are substantially reduced from those existing prior to the
Change of Control;

                          (c)     The Participant's place of employment is
changed by a distance of more than twenty-five miles without such Participant's
consent; or

                          (d)     The Participant's salary is reduced by
twenty-five percent or more.

                 10.4.    Definition of Substantial Cause.  For purposes of
this Plan, the Company shall have "Substantial Cause" to terminate the
employment of a Participant if such termination is based upon--

                          (a)     The Participant's willful and continuous
failure to substantially perform his or her duties with the Company (other than
any such failure resulting from incapacity due to physical or mental illness)
after a demand for substantial performance is delivered to the Participant by
the Board which specifically identifies the manner in which the Board believes
that the Participant has not substantially performed his or her duties; or

                          (b)     The Participant's willfully engaging in gross
misconduct demonstrably injurious to the Company.

                 For purposes of this Section 10.4, no act, or failure to act,
on the part of the Participant shall be considered "willful" if done, or
omitted to be done, by the participant in good faith and in the reasonable
belief that the act or omission was in the best interests of the Company.  A
Participant shall not be deemed to have been terminated for Substantial Cause
unless and until the Participant receives a copy of a resolution duly adopted
by the affirmative vote of not less than three-fourths (3/4) of the entire
membership of the Board called and held for that purpose (after reasonable
notice to the Participant and an opportunity for the Participant, together with
his or her counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Participant was guilty of conduct set forth in
clause (a) or (b) above and specifying the particulars thereof.

                                   ARTICLE 11

                         Other Benefits and Agreements

                 11.1.    Coordination with Other Benefits.  The benefits under
this Plan for a Participant and his or her spouse, if any, are in addition to
any other benefits available under any other plan or program for employees of
the Company.  This Plan shall supplement and shall not supersede, modify or
amend any other such plan or program.





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                                   ARTICLE 12

                     Restrictions on Alienation of Benefits

                 12.1.    Nonassignability.  Neither a Participant nor any
other person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey, in
advance of actual receipt, the amounts, if any, payable hereunder, or any part
thereof.  No part of the amounts payable hereunder shall, prior to actual
payment, be subject to any claims of creditors and, in particular, they shall
not be subject to attachment, garnishment, seizure or sequestration by any
creditor for the payment of any debts, judgments, obligations, alimony or
separate maintenance owed by a Participant or his or her spouse, if any.

                                   ARTICLE 13

                             Administration of Plan

                 13.1.    Committee Administration.  The general administration
of this Plan, as  well as construction and interpretation hereof, shall be the
responsibility of the Committee, the number of members of which shall be
designated from time to time by the Board and the members of which shall be
appointed from time to time by, and shall serve at the pleasure of, the Board.

                 13.2.    Committee Authority.  The Committee shall have the
exclusive right and authority--

                          (a)     To from time to time establish rules, forms
and procedures for the administration of this Plan;

                          (b)     To interpret this Plan and to correct any
defect, supply any information and reconcile any inconsistency in such manner
and to such extent as the Committee, in its sole and absolute discretion, shall
deem necessary or advisable to carry out the purpose of this Plan; and

                          (c)     To make all other determinations that the
Committee, in its sole and absolute discretion, shall deem necessary or
advisable in connection with the administration of this Plan, including,
without limitation, determination of (i) the benefit amounts to which a
Participant is entitled (and the appropriate Final Average Earnings,
Retirement Offset Amount, Disability Offset Amount, Years of Service and/or
Years of Participation to be used in determining such benefit amounts); (ii)
whether Cause or Substantial cause existed for the termination of employment of
a Participant; (iii) whether a Participant's employment has been constructively
terminated (within the meaning of Section 10.3) and (iv) whether benefits are
to be withheld or terminated pursuant to Section 7.4.





                                      -13-
<PAGE>   14
                 Subject to the claims procedures set forth in Article 14, all
rules, procedures, interpretations and determinations made by the Committee in
good faith shall be final, conclusive and binding upon all persons having or
claiming to have any right or interest under this Plan.

                 13.3.    Committee Indemnity.  No member of the Committee
shall be liable for any act or omission of any other member of the Committee,
nor for any act or omission on his or her own part, excepting his or her own
gross negligence.  The Company shall indemnify and save harmless each member of
the Committee against any and all expenses and liabilities arising out of his
or her membership on the Committee, with the exception of expenses and
liabilities arising out of his or her own gross negligence.

                                   ARTICLE 14

                               Claims Procedures

                 14.1.    Presentation of Claim.  Any Participant or the
surviving spouse, if any, of a deceased Participant (such Participant or spouse
being referred to below as a "Claimant") may deliver to the Committee a
written claim for a determination with respect to the amounts distributable
to such Claimant from this Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within sixty (60) days
after such notice was received by the Claimant.  The claim must state with
particularity the determination desired by the Claimant.

                 14.2.    Notification of Decision.  The Committee shall
consider a Claimant's claim within a reasonable time and shall notify the
Claimant in writing:

                          (a)     that the Claimant's requested determination
has been made, and that the claim has been allowed in full; or

                          (b)     that the Committee has reached a conclusion
contrary, in whole or in part, to the Claimant's requested determination, and
such notice must set forth in a manner calculated to be understood by the
Claimant;

                                  (i)      the specific reason(s) for the
denial of the claim, or any part of it;

                                  (ii)     specific reference(s) to pertinent
provisions of this Plan upon which such denial was based;

                                  (iii)    a description of any additional
material or information necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary; and





                                      -14-
<PAGE>   15
                                  (iv)     an explanation of the claim review
procedure set forth in Section 14.3.

                 14.3.    Review of Denied Claim.  Within sixty (60) days after
receiving a notice from the Committee that a claim has been denied, in whole
or in part, a Claimant (or the Claimant's duly authorized representative) may
file with the Committee a written request for a review of the denial of the
claim.  Thereafter, but not later than thirty (30) days after filing of the
written request for review, the Claimant (or the Claimant's duly authorized
representative):

                          (a)     may review pertinent documents;

                          (b)     may submit written comments or other
documents; and/or

                          (c)     may request a hearing, which request the
Committee, in its sole and absolute discretion, may grant.

                 14.4.    Decision on Review.  The Committee shall render its
decision on review promptly, and not later than sixty (60) days after the
filing of a written request for review of the denial, unless a hearing is held
or other special circumstances require additional time, in which case the
Committee's decision must be rendered within one hundred twenty (120)
days after such date.  Such decision must be written in a manner calculated to
be understood by the Claimant, and it must contain:

                          (a)     specific reasons for the decision;

                          (b)     may submit written comments or other 
documents; and/or

                          (c)     such other matters as the Committee deems
relevant.

                 Any decision on review made by the Committee in good faith
shall be final, conclusive and binding upon the Claimant, unless the decision
is determined to have been arbitrary and capricious.

                                   ARTICLE 15

                                 Grantor Trust

                 15.1.    Funding of Trust.  The Company may from time to time
transfer to the trustee of the Trust such assets as the Committee determines,
in its sole and absolute discretion, should be transferred thereto.





                                      -15-
<PAGE>   16
                 15.2.    Interrelationship of the Plan and the Trust.  The
provisions of this Plan shall govern the rights of a Participant and his or her
spouse to distributions pursuant to this Plan.  The provisions of the Trust
shall govern the rights of the Company, Participants and their spouses and the
creditors of the Company to the assets, if any, transferred to the Trust. The
Company shall at all times remain liable to carry out its obligations under
this Plan. The Company's obligations under the Plan may be satisfied with Trust
assets distributed pursuant to the terms of the Trust.

                                   ARTICLE 16

                                 Miscellaneous

                 16.1.    Notice.  Any notice required or permitted to be given
under this Plan by a Participant or a Claimant shall be in writing and shall be
hand delivered against receipt, or mailed via registered or certified mail
return receipt requested, to:

                                  Board of Directors
                                  Commonwealth Bank
                                  2 West Lafayette Avenue
                                  Norristown, PA  19401

                 Any notice to a Participant or his or her spouse, if any,
required or permitted to be given under this Plan by the Committee or the Board
shall be in writing and shall be hand delivered to the Participant or spouse,
or mailed via registered or certified mail, return receipt requested, to the
last known address for the Participant or spouse as shown on the records of the
Company.

                 16.2.    Successors.  This Plan shall be binding upon the
Company and its successors and assigns, and upon a Participant, the
Participant's spouse, if any, and their permitted assigns, heirs, executors and
administrators.

                 16.3.    Governing Law.  This Plan shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania to the extent such
laws are not superseded by federal law.

                 16.4.    Pronouns.  Masculine pronouns wherever used shall
include feminine pronouns and the singular shall include the plural.

                 16.5.    Headings.  The headings of the articles, sections and
paragraphs of this Plan are for convenience only and shall not control or
affect the meaning or construction of any of its provisions.





                                      -16-
<PAGE>   17
                 16.6.    Validity.  In the event any provision of this Plan
shall be illegal or invalid for any reason, the illegality or invalidity of
that provision shall not affect the remaining provisions hereof, but this Plan
shall be construed and enforced as if such illegal and invalid provision had
never been inserted herein.

                 16.7.    Incapacity of Recipient.  If any person entitled to a
benefit under the Plan is deemed by the Company to be incapable of personally
receiving and giving a valid receipt for such payment, then, unless and until
claim therefor shall have been made by a duly appointed guardian or other legal
representative of such person, the Company may provide for such benefit or any
part thereof to be made to any other person or institution then contributing
toward or providing for the care and maintenance of such person.  Any such
payment shall be a payment for the account of such person and a complete
discharge of any liability of the Company and the Plan therefor.

                 IN WITNESS WHEREOF, Commonwealth Bank has caused these
presents to be duly executed on this 9th day of Dec, 1997.

                                  COMMONWEALTH BANK


Attest:


/s/ MICHAEL W. HARRINGTON         By: /s/ CHARLES M. JOHNSTON
-------------------------             -----------------------
Assistant Secretary                   Chief Financial Officer





                                      -17-
<PAGE>   18
                                   APPENDIX A

                 The Bank has designated the following persons as Participants
in its Supplemental Executive Retirement Plan:

                 1.       Charles H. Meacham, Chairman and Chief Executive
                          Officer, effective January 1, 1994.

                          Annual Accrued Benefit under Pension Plan:  
                          $ 73,061.52

                          Target SERP Benefit:  an amount equal to 50% of the
                          Participant's Final Average Earnings.


                 2.       Patrick J. Ward, President and Chief Operating
                          Officer, effective January 1, 1998.

                          Annual Accrued Benefit under Pension Plan:  
                          $ 6,591.84

                          Target SERP Benefit:  the sum of (1), (2) and (3),
                          where

                          (1) is 0.644% of "Average Annual Compensation," as
                          defined in the Target Benefit Plan, up to "Covered
                          Compensation," as defined in the Target Benefit Plan,
                          for a calendar year, multiplied by the Participant's
                          "Years of Projected Service," as defined in the
                          Target Benefit Plan, to the date of his actual
                          retirement, provided that the maximum number of years
                          taken into account shall be limited to 30 years;  and

                          (2)  is 1.03% of "Average Annual Compensation" in
                          excess of "Covered Compensation" for the calendar
                          year multiplied by the Participant's "Years of
                          Projected Service" to the date of his actual
                          retirement, provided that the maximum number of years
                          taken into account shall be limited to 30 years;  and

                          (3)  is 0.258% of "Average Annual Compensation"
                          multiplied by the Participant's "Years of Projected
                          Service" to the date of his actual retirement in
                          excess of 30 years;

                          determined without regard to the limitations
                          contained in the Target Benefit Plan and in Sections
                          401(a)(17) and 415 of the Internal Revenue Code of
                          1986, as amended.