<PAGE>   1
                                                                    EXHIBIT 10.9


                                   AGREEMENT

         AGREEMENT, dated this 1st day of January 1997, between Commonwealth 
Bank (the "Bank"), a federally-chartered savings bank, and Patrick J. Ward 
(the "Executive").

                              W I T N E S S E T H:

         WHEREAS, the Executive is presently President and Chief Operating
Officer of the Bank; and

         WHEREAS, the Bank desires to be ensured of the Executive's continued
active participation in the business of the Bank; and

         WHEREAS, in order to induce the Executive to remain in the employ of
the Bank and in consideration of the Executive's agreeing to remain in the
employ of the Bank, the parties desire to specify the terms of such employment;

         NOW THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereby agree as follows:

         1.       DEFINITIONS.  The following words and terms shall have the
meanings set forth below for the purposes of this Agreement:

                 (a)     AVERAGE ANNUAL COMPENSATION.  The Executive's "Average
Annual Compensation" for purposes of this Agreement shall be deemed to mean the
average level of compensation paid to the Executive by the Bank or any
subsidiary thereof during the most recent five taxable years preceding the Date
of Termination, including Base Salary, as defined in Section 1.(b) hereof,  and
bonuses under any employee benefit plans of the Bank.

                 (b)     BASE SALARY.  "Base Salary" shall mean the Executive's
annual salary exclusive of any pension or other retirement benefit plan, profit
sharing, stock option, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Bank.

                 (c)     CAUSE.  Termination by the Bank of the Executive's
employment for "Cause" shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order or material breach of any provision of this
Agreement or for any act or failure to act on the Executive's part done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's action or omission was in the best interest of the
Bank.

                 (d)     CHANGE IN CONTROL OF THE BANK.  "Change in Control of
the Bank" shall mean a change in control of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934,





<PAGE>   2
as amended ("Exchange Act") or any successor thereto, whether or not the Bank
is registered under Exchange Act; provided that, without limitation, such a
change in control shall be deemed to have occurred if (i) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Bank representing 25% or more of the
combined voting power of the Bank's then outstanding securities; or (ii) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Bank cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by stockholders, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at
the beginning of the period; provided, however, that a "Change in Control" of
the Bank shall not be deemed to have occurred if Commonwealth Mutual Holding
Company ceases to own at least 51% of all outstanding shares of stock of the
Bank in connection with its conversion from mutual to stock form.

                 (e)     CODE.  "Code" shall mean the Internal Revenue Code of
1986, as amended.

                 (f)     DATE OF TERMINATION.  "Date of Termination" shall mean
the date the Executive's employment is terminated for any reason as specified
in the Notice of Termination.

                 (g)    DISABILITY.  Termination by the Bank of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits
under the applicable long-term disability plan maintained by the Bank or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.

                 (h)    GOOD REASON.  Termination by the Executive of the
Executive's employment for "Good Reason" shall mean termination by the
Executive within one year following a Change in Control of the Bank based on:

                          (i)     Without the Executive's express written
                                  consent, the failure to elect or to re-elect
                                  or to appoint or to re-appoint the Executive
                                  to the offices of Chairman, President and
                                  Chief Executive Officer of the Bank or a
                                  material adverse change made by the Bank in
                                  the Executive's functions, duties or
                                  responsibilities as Chairman, President and
                                  Chief Executive Officer of the Bank as they
                                  existed immediately prior to a Change in
                                  Control of the Bank;

                          (ii)    Without the Executive's express written
                                  consent, a reduction by the Bank in the
                                  Executive's Base Salary as the same may be
                                  increased from time to time or, except to the
                                  extent permitted by Section 3(b) hereof, a
                                  reduction in the package of fringe benefits
                                  provided to the Executive, taken as a whole;





                                       2
<PAGE>   3
                          (iii)   The principal executive office of the Bank is
                                  relocated more than 25 miles from the current
                                  principal executive office or, without the
                                  Executive's express written consent, the Bank
                                  requires the Executive to be based anywhere
                                  other than an area in which the Bank's
                                  principal executive office is located, except
                                  for required travel on business of the Bank
                                  to an extent substantially consistent with
                                  the Executive's present business travel
                                  obligations;

                          (iv)    Any purported termination of the Executive's
                                  employment for Cause, Disability or
                                  Retirement which is not effected pursuant to
                                  a Notice of Termination satisfying the
                                  requirements of paragraph (j) below; or

                          (v)     The failure by the Bank to obtain the
                                  assumption of and agreement to perform this
                                  Agreement by any successor as contemplated in
                                  Section 9 hereof.

                 (i)     IRS.  IRS shall mean the Internal Revenue Service.

                 (j)     NOTICE OF TERMINATION.  Any purported termination of
the Executive's employment by the Bank for any reason, including without
limitation for Cause, Disability or Retirement, or by the Executive for any
reason, including without limitation for Good Reason, shall be communicated by
written "Notice of Termination" to the other party hereto.  For purposes of
this Agreement, a "Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision
so indicated, (iii) specifies a Date of Termination, which shall be not less
than thirty (30) nor more than ninety (90) days after such Notice of
Termination is given, except in the case of the Bank's termination of
Executive's employment for Cause; and (iv) is given in the manner specified in
Section 11 hereof.

                 (k)     RETIREMENT.  Termination by the Bank of the
Executive's employment based on "Retirement" shall mean voluntary termination
by the Employee in accordance with the Bank's retirement policies, including
early retirement, generally applicable to their salaried employees.

                 (l)     GENDER NEUTRAL PRONOUN USAGE.  The use of the
masculine pronoun shall be deemed to include the feminine pronoun throughout
this Agreement.

         2.       TERM OF EMPLOYMENT.

                 (a)     The Bank hereby employs the Executive as President and
Chief Operating Officer and Executive hereby accepts said employment and agrees
to render such services to the Bank on the terms and conditions set forth in
this Agreement.  The term of employment under this Agreement shall be for three
years, commencing on the date of this Agreement.  Prior to the first annual
anniversary of the date of this Agreement and each annual anniversary
thereafter, the





                                       3
<PAGE>   4
Board of Directors of the Bank shall consider and review (with appropriate
corporate documentation thereof, and after taking into account all relevant
factors, including the Executive's performance hereunder) extension of the term
under this Agreement.  If the Board of Directors does not approve such
extension it shall provide written notice to the Executive of such event or the
Executive may give written notice to the Bank of the Executive's election not
to extend the term.  In each case such written notice shall be given not less
than thirty (30) days prior to any such anniversary date.  If the Board of
Directors of the Bank elects to extend this Agreement after any anniversary
date of this Agreement, it may, in its discretion, relate back to the
anniversary date and extend this Agreement for up to three years from such
anniversary date.  References herein to the term of this Agreement shall refer
both to the initial term and successive terms.

                 (b)     During the term of this Agreement, the Executive shall
perform such executive services for the Bank as may be consistent with his
titles and from time to time assigned to him by the Bank's Board of Directors.

         3.       COMPENSATION AND BENEFITS.

                 (a)     The Bank shall compensate and pay Executive for his
services during the term of this Agreement at a minimum base salary of One
Hundred Ninety Five Thousand Dollars ($195,000) per year, which may be
increased from time to time in such amounts as may be determined by the Board
of Directors of the Bank and may not be decreased without the Executive's
express written consent ("Base Salary").  In addition to his Base Salary, the
Executive shall be entitled to receive during the term of this Agreement such
bonus payments as may be determined by the Board of Directors of the Bank.

                 (b)     During the term of the Agreement, Executive shall be
entitled to participate in and receive the benefits of any pension or other
retirement benefit plan, profit sharing, stock option, employee stock
ownership, or other plans, benefits and privileges given to employees and
executives of the Bank, to the extent commensurate with his then duties and
responsibilities, as fixed by the Board of Directors of the Bank.  The Bank
shall not make any changes in such plans, benefits or privileges which would
adversely affect Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executive officers of the Bank
and does not result in a proportionately greater adverse change in the rights
of or benefits to Executive as compared with any other executive officer of the
Bank.  Nothing paid to Executive under any plan or arrangement presently in
effect or made available in the future shall be deemed to be in lieu of the
salary payable to Executive pursuant to Section 3(a) hereof.

                 (c)     During the term of this Agreement, Executive shall be
entitled to paid annual vacation in accordance with the policies as established
from time to time by the Board of Directors of the Bank, which shall in no
event be less than four weeks per annum.  Executive shall not be entitled to
receive any additional compensation from the Bank for failure to take a
vacation, nor shall Executive be able to accumulate unused vacation time from
one year to the next, except to the extent authorized by the Board of Directors
of the Bank.





                                       4
<PAGE>   5
                 (d)     During the term of this Agreement, Bank agrees to
provide Executive with the use of a Bank-owned automobile appropriate to his
positions with the Bank and to pay all costs associated with such automobile,
including registration, licensing, insurance and costs of operation.

         4.       EXPENSES.  The Bank shall reimburse Executive or otherwise
provide for or pay for all reasonable expenses incurred by Executive in
furtherance or in connection with the business of the Bank, including, but not
by way of limitation, automobile and traveling expenses, and all reasonable
entertainment expenses (whether incurred at the Executive's residence, while
traveling or otherwise), subject to such reasonable documentation and other
limitations as may be established by the Board of Directors of the Bank.  If
such expenses are paid in the first instance by Executive, the Bank shall
reimburse the Executive therefor.

         5.       TERMINATION.

                 (a)     The Bank shall have the right, at any time upon prior
Notice of Termination, to terminate the Executive's employment hereunder for
any reason, including without limitation termination for Cause, Disability or
Retirement, and Executive shall have the right, upon prior Notice of
Termination, to terminate his employment hereunder for any reason.

                 (b)     The Executive's employment, and his status as an
officer of the Bank shall terminate (i) immediately upon being given a Notice
of Termination for Cause, or (ii) on the Date of Termination for any other
reason.  A Notice of Termination for other than Cause shall not affect the
Executive's right to compensation to the Date of Termination or for such other
period of time after the Date of Termination as specified in Section 5(c)(i)
and (ii) hereof, if applicable.

                 (c)(i)   In the event that Executive's employment is
terminated by the Bank for other than Cause, Disability, Retirement or the
Executive's death, or such employment is terminated by the Executive due to a
material breach of this Agreement by the Bank which has not been cured within
fifteen (15) days after a written notice of non-compliance has been given by
the Executive to the Bank, and as of the Executive's Date of Termination no
Change in Control of the Bank has occurred, no written agreement which
contemplates a Change in Control of the Bank and which still is in effect has
been entered into by Commonwealth Mutual Holding Company and/or the Bank and no
discussions and/or negotiations are being conducted by either of such entities
which relate to same, then the Bank shall, subject to the provisions of Section
6 hereof, if applicable:

                          (A)     pay to the Executive, in twelve (12) equal
                                  monthly installments beginning with the first
                                  business day of the month following the Date
                                  of Termination, a cash severance amount equal
                                  to two (2) times the Executive's Base Salary
                                  as of his Date of Termination, and

                          (B)     maintain and provide for a period ending at
                                  the earlier of (i) the expiration of twelve
                                  (12)  months from the Executive's Date of





                                       5
<PAGE>   6
                                  Termination or (ii) the date of the
                                  Executive's full-time employment by another
                                  employer (provided that the Executive is
                                  entitled under the terms of such employment
                                  to benefits substantially similar to those
                                  described in this subparagraph (B)), at no
                                  cost to the Executive, the Executive's
                                  continued participation in all group
                                  insurance (other than disability insurance
                                  unless the Executive was disabled and was
                                  receiving disability insurance benefits prior
                                  to the Date of Termination), life insurance,
                                  health and accident, and other employee
                                  benefit plans, programs and arrangements in
                                  which the Executive was entitled to
                                  participate immediately prior to the Date of
                                  Termination (other than stock option and
                                  restricted stock plans of the Bank).

                          (ii)    In the event that Executive's employment is
terminated by the Bank for other than Cause, Disability, Retirement or the
Executive's death, or such employment is terminated by the Executive due to a
material breach of this Agreement by the Bank which has not been cured within
fifteen (15) days after a written notice of non-compliance has been given by
the Executive to the Bank or for Good Reason, and prior to the Executive's Date
of Termination there has been a Change in Control of the Bank or a written
agreement which contemplates a Change in Control of the Bank and which still is
in effect has been entered into by Commonwealth Mutual Holding Company and/or
the Bank or discussions and/or negotiations are being conducted by either of
such entities which relate to the same, then the Bank shall, subject to the
provisions of Section 6 hereof, if applicable:


                          (A)     pay to the Executive, within thirty (30) days
                                  following the Date of Termination, a lump sum
                                  cash severance amount equal to three (3)
                                  times the Executive's Average Annual
                                  Compensation as set forth on the W-2 forms
                                  issued by the Bank to the Executive and as
                                  determined in Section 1.(a) hereof, and
                 
                          (B)     maintain and provide for a period ending at
                                  the earlier of (i) the expiration of twenty
                                  four (24) months from the Executive's Date of
                                  Termination or (ii) the date of the
                                  Executive's full-time employment by another
                                  employer (provided that the Executive is
                                  entitled under the terms of such employment
                                  to benefits substantially similar to those
                                  described in this subparagraph (B)), at no
                                  cost to the Executive, the Executive's
                                  continued participation in all group
                                  insurance (other than disability insurance
                                  unless the Executive was disabled and was
                                  receiving disability insurance benefits prior
                                  to the Date of Termination), life insurance,
                                  health and accident, and other employee
                                  benefit plans, programs and arrangements in
                                  which the Executive was entitled to
                                  participate immediately prior to the Date of
                                  Termination (other than stock option and
                                  restricted stock plans of the Bank).





                                       6
<PAGE>   7
         6.       ARBITRATION   The Executive agrees to submit to final and
binding arbitration, pursuant to the rules of the American Arbitration
Association, any and all claims arising from the termination, for any reason,
of the Executive's employment by the Bank including, but not limited to:

                          (a)     any and all claims for wages and benefits
                                  (including without limitation salary, stock,
                                  commissions, royalties, license fees, health
                                  and welfare benefits, Severance pay, vacation
                                  pay, and bonuses):

                          (b)     any and all claims for wrongful discharge and
                                  breach of contract (whether express or
                                  implied), and implied covenants of good faith
                                  and fair dealing;

                          (c)     any and all claims for alleged employment
                                  discrimination on the basis of age, race,
                                  color, religion, sex, national origin,
                                  veteran status, disability and/or handicap,
                                  in violation of any federal, state or local
                                  statute, ordinance, judicial precedent or
                                  executive order, including but not limited to
                                  claims for discrimination under the following
                                  statutes:  Title VII of the Civil Rights Act
                                  of 1964, 42 U.S.C. Section 2000 et seq., the
                                  Civil Rights Act of 1866, 42 U.S.C.  Section
                                  1981, the Age Discrimination in Employment
                                  Act, as amended,  29 U.S.C. Section 621 et.
                                  seq., the Older Workers Benefit Protection
                                  Act, the Rehabilitation Act of 1972, as
                                  amended, 29 U.S.C. Section 701 et seq., the
                                  Americans with Disabilities Act, 42
                                  U.S.C.Section 12101 et. seq., and the
                                  Pennsylvania Human Relations Act, 43 P.S.
                                  Section 951 et seq.

                          (d)     any and all claims under any federal or state
                                  statute relating to employee benefits or
                                  pensions;

                          (e)     any and all claims in tort (including but not
                                  limited to any claims for misrepresentation,
                                  defamation, interference with contract or
                                  prospective economic advantage, intentional
                                  infliction of emotional distress and
                                  negligence; and

                          (f)     any and all claims for attorney's fees and
                                  costs.

         7.       LIMITATION OF BENEFITS UNDER CERTAIN CIRCUMSTANCES.  If the
payments and benefits pursuant to Section 5 hereof, either alone or together
with other payments and benefits which Executive has the right to receive from
the Bank, would constitute a "parachute payment" under Section 280G of the
Code, the payments and benefits pursuant to Section 5 hereof shall be reduced,
in the manner determined by the Executive, by the amount, if any, which is the
minimum necessary to result in no portion of the payments and benefits under
Section 5 being non-deductible to either of the Bank pursuant to Section 280G
of the Code and subject to the excise tax imposed under Section 4999 of the
Code.  The determination of any reduction in the payments and benefits to be
made pursuant to Section 5 shall be based upon the opinion of independent tax





                                       7
<PAGE>   8
counsel selected by the Bank's independent public accountants and paid by the
Bank.  Such counsel shall be reasonably acceptable to the Bank and the
Executive; shall promptly prepare the foregoing opinion, but in no event later
than thirty (30) days from the Date of Termination; and may use such actuaries
as such counsel deems necessary or advisable for the purpose.  In the event
that the Bank and/or the Executive do not agree with the opinion of such
counsel, (i) the Bank shall pay to the Executive the maximum amount of payments
and benefits pursuant to Section 5, as selected by the Executive, which such
opinion indicates that there is a high probability do not result in any of such
payments and benefits being non-deductible to the Bank and subject to the
imposition of the excise tax imposed under Section 4999 of the Code and (ii)
the Bank may request, and Executive shall have the right to demand that the
Bank request, a ruling from the IRS as to whether the disputed payments and
benefits pursuant to Section 5 hereof have such consequences.  Any such request
for a ruling from the IRS shall be promptly prepared and filed by the Bank, but
in no event later than thirty (30) days from the date of the opinion of counsel
referred to above, and shall be subject to Executive's approval prior to
filing, which shall not be unreasonably withheld.  The Bank and Executive agree
to be bound by any ruling received from the IRS and to make appropriate
payments to each other to reflect any such rulings, together with interest at
the applicable federal rate provided for in Section 7872(f)(2) of the Code.
Nothing contained herein shall result in a reduction of any payments or
benefits to which the Executive may be entitled upon termination of employment
under any circumstances other than as specified in this Section 6, or a
reduction in the payments and benefits specified in Section 5 below zero.  The
payments and benefits specified in Section 5 hereof may in no event exceed the
Executive's Average Base Salary and benefits over the most recent three years
prior to termination.

         8.       MITIGATION; EXCLUSIVITY OF BENEFITS.

                 (a)     The Executive, unless terminated for Retirement,
Change in Control of the Bank,  or Disability, shall be required to mitigate
the amount of any payments and benefits hereunder by seeking other employment
or otherwise.  In the event that the Executive obtains other employment during
the period that the Executive is receiving payments pursuant to Section
5(c)(i)(A) hereof, the cash amounts to be paid to the Executive pursuant
thereto shall be reduced by any compensation received by the Executive as a
result of employment by another employer after the Date of Termination.

                 (b)     The specific arrangements referred to herein are not
intended to exclude any other benefits which may be available to the Executive
upon a termination of employment with the Bank pursuant to employee benefit
plans of the Bank or otherwise, provided, however, that any payments or
benefits the Executive receives from sources other than the Bank shall serve to
reduce the cash amount paid to the Executive pursuant to Section 5(c)(i)(A)
hereof.

         9.       CONFIDENTIALITY.  The Executive acknowledges that by virtue
of his employment hereunder, he will maintain an intimate knowledge of the
activities and affairs of the Bank, including confidential matters.  As a
result, the Executive agrees to maintain the confidentiality of all
confidential information relating to the Bank during the term of employment
hereunder and any period that the Executive may be receiving payments pursuant
to Section 5 hereof, provided that





                                       8
<PAGE>   9
nothing in this Section 8 shall be deemed to prevent the Executive from being
employed by any other corporation, firm or entity upon termination of
Executive's employment by the Bank as long as Executive does not violate the
foregoing proscription.

         10.     WITHHOLDING.  All payments required to be made by the Bank
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation.

         11.     ASSIGNABILITY.  The Bank may assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which the Bank may hereafter merge or
consolidate or to which the Bank may transfer all or substantially all of its
assets, if in any such case said corporation, bank or other entity shall by
operation of law or expressly in writing assume all obligations of the Bank
hereunder as fully as if it had been originally made a party hereto, but may
not otherwise assign this Agreement or its rights and obligations hereunder.
The Executive may not assign or transfer this Agreement or any rights or
obligations hereunder.

         12.     NOTICE.  For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by certified
or registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:

                 To the Bank:         Commonwealth Bank
                                      70 Valley Stream Parkway
                                      Valley Forge, Pennsylvania 19482-2104
                                      
                 To the Executive:




         13.     AMENDMENT; WAIVER.  No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer or officers as
may be specifically designated by the Board of Directors of the Bank to sign on
its behalf.   No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

         14.     GOVERNING LAW.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United
States where applicable and otherwise by the substantive laws of the
Commonwealth of Pennsylvania.





                                       9
<PAGE>   10
         15.     NATURE OF OBLIGATIONS.  Nothing contained herein shall create
or require the Bank to create a trust of any kind to fund any benefits which
may be payable hereunder, and to the extent that the Executive acquires a right
to receive benefits from the Bank hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Bank.

         16.     HEADINGS.  The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

         17.     VALIDITY.  The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.

         18.     COUNTERPARTS.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

         19.     REGULATORY ACTIONS.  The following provisions shall be
applicable to the parties to the extent that they are required to be included
in employment agreements between a savings association and its employees
pursuant to Section 563.39(b) of the Regulations Applicable to all Savings
Associations, 12 C.F.R. Section 563.39(b), or any successor thereto, and shall
be controlling in the event of a conflict with any other provision of this
Agreement, including without limitation Section 5 hereof

                 (a)      If Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
pursuant to notice served under Section 8(e)(3) or Section 8(g)(1) of the
Federal Deposit Insurance Act ("FDIA")(12 U.S.C. Sections 1818(e)(3) and
1818(g)(1)), the Bank'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, the Bank may, in its discretion: (i) pay
Executive all or part of the compensation withheld while its obligations under
this Agreement were suspended, and (ii)reinstate (in whole or in part) any of
its obligations which were suspended.

                 (b)     If Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C. Sections
1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
Executive and the Bank as of the date of termination shall not be affected.

                 (c)     If the Bank is in default, as defined in Section
3(x)(1) of the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under this
Agreement shall terminate as of the date of default, but vested rights of the
Executive and the Bank as of the date of termination shall not be affected.

                 (d)     All obligations under this Agreement shall be
terminated pursuant to 12 C.F.R. Section 563.39(b)(5) (except to the extent
that it is determined that continuation of the Agreement for the continued
operation of the Bank is necessary): (i) by the Director of the Office





                                       10
<PAGE>   11
of Thrift Supervision ("OTS"), or his/her designee, at the time the Federal
Deposit Insurance Corporation ("FDIC") or Resolution Trust Corporation enters
into an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of the FDIA (12 U.S.C. Section 1823(c));
or (ii) by the Director of the OTS, or his/her designee, at the time the
Director or his/her designee approves a supervisory merger to resolve problems
related to operation of the Bank or when the Bank is determined by the Director
of the OTS to be in an unsafe or unsound condition, but vested rights of the
Executive and the Bank as of the date of termination shall not be affected.

         20.     REGULATORY PROHIBITION.  Notwithstanding any other provision
of this Agreement to the contrary, any payments made to the Executive pursuant
to this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)) and any
regulations promulgated thereunder.


         IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.


Attest:                               COMMONWEALTH BANK
                                      
                                      
                                      
                                      By:                                      
------------------------------            --------------------------------------
                                      
                                      
                                      
                                      
                                      
Witness:                              
                                      
                                      
                                                                               
------------------------------           ---------------------------------------
                                        PATRICK J. WARD
                                      
                                                       
                                                       


                                       11