This AGREEMENT(Agreement) originally entered into as of March 31, 1998, is
amended and restated effective as of January 1, 2002, by and between
Northeast Pennsylvania Financial Corp. (the Company), a
corporation organized under the laws of Delaware, with its principal offices at
12 Broad Street, Hazleton, Pennsylvania, 18201, and E. Lee Beard(Executive). Any reference to the Bank in this
Agreement shall mean First Federal Bank, a wholly-owned subsidiary of the
Company, or any successor to First Federal Bank.

WHEREAS, the Company
desires to continue to assure itself of the services of Executive as President
and Chief Executive Officer for the period provided for in this Agreement; and

WHEREAS, the Company has
previously entered into an employment agreement with Executive dated March 31,
1998; and

WHEREAS, Executive and the
Board of Directors of the Company desire to enter into an updated and revised
agreement setting forth the terms and conditions of the continuing employment of
Executive and the related rights and obligations of each of the parties.

NOW, THEREFORE, in
consideration of the promises and mutual covenants herein contained, it is
agreed as follows:

1. Position
and Responsibilities.

(a) During the period of
Executives employment under this Agreement, Executive agrees to serve as
President and Chief Executive Officer of the Company. Executive shall have
responsibility for the general management and control of the business and
affairs of the Company and its subsidiaries and shall perform all duties and
shall have all powers which are commonly incident to the offices of President
and Chief Executive Officer or which, consistent with those offices, are
delegated to her by the Board or Directors. During the term of this Agreement,
Executive also agrees to serve as a director of the Company.

(b) During the period of
Executives employment under this Agreement, except for periods of absence
occasioned by illness, vacation, and reasonable leaves of absence, Executive
shall devote substantially all of her business time, attention, skill and
efforts to the faithful performance of her duties under this Agreement,
including activities and services related to the organization, operation and
management of the Company and its subsidiaries, as well as participation in
community, professional and civic organizations; provided, however, that,
Executive may serve, or continue to serve, on the boards of directors of, and
hold any other offices or positions in, companies or organizations listed by
Executive on her annual conflict of interest reporting.

(c) The Company will
furnish Executive with the working facilities and staff customary for executive
officers with the titles and duties set forth in this Agreement and as are
necessary for her to perform her duties. The location of such facilities and
staff shall be at the principal administrative offices of the Company.

2. Term of
Employment.

(a) The term of this
Agreement shall be (i) the initial term, consisting of the period commencing on
the date of this Agreement (the Effective Date) and ending on the
third anniversary of the Effective Date, plus (ii) any and all extensions of the
initial term made pursuant to this Section 2.

(b) Commencing on the
Effective Date and on each day thereafter, the term under this Agreement shall
be renewed automatically for an additional one (1) day period beyond the then
effective expiration date without action by any party, provided that neither the
Company, on the one hand, nor Executive, on the other, shall have given at least
sixty (60) days written notice of its or her desire that the term not be
renewed. In the case such notice is given by one party to the other, the term of
this Agreement shall become fixed and shall end on the third anniversary of the
date specified in such written notice.

(c) Notwithstanding
anything contained in this Agreement to the contrary, either Executive or the
Company may terminate Executives employment with the Company at any time
during the term of this Agreement, subject to the terms and conditions of this
Agreement.

3.
Compensation and Benefits.

(a) Base Salary.The
Company agrees to pay Executive during the term of this Agreement a base salary
at the rate of $220,562 per annum, payable in accordance with the Companys
customary payroll practices. The Board of Directors of the Company shall review
annually the rate of Executives base salary based upon factors they deem
relevant, and may maintain or increase her base salary, provided that no such
action shall reduce the rate of base salary below the rate in effect on the
Effective Date. In the absence of action by the Board of Directors of the
Company, Executive shall continue to receive a base salary at the per annum rate
specified on the Effective Date or, if another rate has been established under
the provisions of this Section 3, the rate last properly established by action
of the Board of Directors. Executives base salary shall include any
amounts of compensation deferred by Executive under any tax-qualified retirement
or welfare benefit plan or any other deferred compensation arrangement
maintained by the Company or the Bank.

(b) Board Fees.Executive shall be entitled to receive a retainer and fees for serving as a
director of the Board of Directors of the Company in amounts equal to the other
members of the Board of the Directors of the Company. Board remuneration paid to
Executive shall be in addition to and not in lieu of any other remuneration
provided under this Agreement.

(c) Incentive
Compensation. Executive shall be entitled to participate in discretionary
bonuses or other incentive compensation programs that the Board of Directors may
award from time to time to senior management employees pursuant to bonus plans,
or otherwise.

(d)Club Dues. In addition to any other  compensation  provided for under this  Agreement,  the Company or the
Bank shall pay Executive an amount  sufficient,  on an after-tax basis, to maintain her membership at the following
clubs:

- Valley Country Club
- Club Corp. of America
- Westmoreland Club

(e) Automobile and
Cellular Phone. The Company or the Bank shall provide Executive with, and
Executive shall have the primary use of, an automobile owned or leased by the
Company or the Bank and the Company or the Bank shall pay (or reimburse
Executive) for all expenses of insurance, registration, operation and
maintenance of the automobile. Executive shall comply with reasonable reporting
and expense limitations on the use of such automobile, as the Company or the
Bank may establish from time to time, and the Company or the Bank shall annually
include on Executives Form W-2 any amount attributable to Executives
personal use of such automobile. The Company or the Bank shall also provide
Executive with a cellular phone and shall pay (or reimburse Executive) for all
reasonable expenses related to the business use of such phone.

(f) Vacation and
Holidays.Executive shall take vacation at a time mutually agreed upon by
the Company and Executive. Executive shall receive her base salary and other
benefits during periods of vacation. Executive shall also be entitled to paid
legal holidays in accordance with the policies of the Company.

(g) Annual Physical.The Company or the Bank shall provide Executive with or reimburse Executive
for all cost of an annual physical at the Greenbrier Clinic in White Sulpher
Springs, West Virginia, including the cost of travel and overnight
accommodations for Executive and Executives spouse.

(h) Other Employee
Benefits. In addition to any other compensation or benefits provided for
under this Agreement, Executive shall be entitled to continue to participate in
any employee benefit plans, arrangements and perquisites of the Company or the
Bank in which she participated or was eligible to participate as of the
Effective Date. Executive shall also be entitled to participate in any employee
benefits or perquisites the Company or the Bank offers to full-time employees or
executive management in the future. The Company or the Bank will not, without
Executives prior written consent, make any changes in such plans,
arrangements or perquisites which would adversely affect Executives rights
or benefits thereunder without separately providing for an arrangement that
ensures Executive receives or will receive the

economic value that Executive
would otherwise lose as a result of such adverse effect. Without limiting the
generality of the foregoing provisions of this paragraph, Executive shall be
entitled to participate in or receive benefits under all plans relating to stock
options, restricted stock awards, stock purchases, pension, profit sharing,
employee stock ownership, supplemental retirement, group life insurance, medical
and other health and welfare coverage that are made available by the Company or
the Bank at the Effective Time or at any time in the future during the term of
this Agreement, subject to and on a basis consistent with the terms, conditions
and overall administration of such plans and arrangements.

4. Payments to
Executive Upon an Event of Termination.

(a) Upon the occurrence of an
Event of Termination (as herein defined) during Executives term of
employment under this Agreement, the provisions of this Section 4 shall apply.
Unless Executive otherwise agrees, as used in this Agreement, an Event of
Termination shall mean and include any one or more of the following: (i)
the termination by the Company of Executives full-time employment for any
reason other than a termination governed by Section 7 of this Agreement; or (ii)
Executives resignation from the Company, upon, any (A) notice to Executive
of non-renewal of the term of this Agreement (B) failure to reappoint Executive
as President and Chief Executive Officer, (C) material change in
Executives function duties, or responsibilities with the Company or its
subsidiaries, which change would cause Executives position(s) to become of
lesser responsibility, importance, or scope from the position and attributes
thereof described in Section 1 of this Agreement, (D) relocation of
Executives principal place of employment by more than twenty-five (25)
miles from its location at the Effective Date of this Agreement, (E) material
reduction in the benefits and perquisites to Executive from those being provided
as of the Effective Date of this Agreement (except as provided for in Section
3(g) of this Agreement), (F) liquidation or dissolution of the Company or the
Bank, or (G) breach of this Agreement by the Company. Upon the occurrence of any
event described in clauses (A), (B), (C), (D), (E), (F) or (G), above, Executive
shall have the right to terminate her employment under this Agreement by
resignation upon not less than sixty (60) days prior written notice given within
six (6) full calendar months after the event giving rise to Executives
right to elect to terminate her employment.

(b) Upon Executives
termination from employment in accordance with paragraph (a) of this Section 4,
on the Date of Termination, as defined in Section 8 of this Agreement, the
Company shall be obligated to pay Executive, or, in the event of her death
following the Date of Termination, her beneficiary or beneficiaries, or her
estate, as the case may be, an amount equal to the sum of: (i) the base salary
and incentive compensation that would have been paid to Executive for the
remaining term of this Agreement had the Event of Termination not occurred
(based on Executives then current base salary and most recently paid or
accrued bonus at the time of the Event of Termination) plus (ii) the value, as
calculated by a recognized firm customarily performing such valuation, of any
stock options which, as of the Date of Termination, have been granted to
Executive but are not exercisable by Executive and the value of any restricted
stock awards which have been granted to Executive, but in which Executive

does
not have a non-forfeitable or fully-vested interest as of the Date of
Termination plus (iii) the value of all employee benefits that would have been
provided to Executive for the remaining term of this Agreement had the Event of
Termination not occurred, based on the most recent level of contribution,
accrual or other participation by or on behalf of Executive. At the election of
Executive, which election is to be made prior to the Date of Termination, such
payments shall be made in a lump sum. In the event that no election is made,
payment to Executive will be made on a monthly basis in approximately equal
installments during the remaining unexpired term of this Agreement. Such
payments shall not be reduced in the event Executive obtains other employment
following termination of employment.

(c) In addition to the
payments provided for in paragraph (b) of this Section 4, upon Executives
termination of employment in accordance with the provisions of paragraph (a) of
this Section 4, to the extent that the Company or the Bank continues to offer
any life, medical, health, disability or dental insurance plan or arrangement in
which Executive or her dependents participates as of the date of the Event of
Termination (each being a Welfare Plan), Executive and her covered
dependents shall continue participating in such Welfare Plans, subject to the
same premium contributions on the part of Executive as were required immediately
prior to the Event of Termination until the earlier of (i) her death; (ii) her
employment by another employer other than one of which she is the majority
owner; or (iii) the end of the remaining term of this Agreement. If the Company
or the Bank does not offer the Welfare Plans at any time after the Event of
Termination, then the Company shall provide Executive with a payment equal to
the premiums for such benefits for the period which runs until the earlier of
(i) her death; (ii) her employment by another employer other than one of which
she is the majority owner; or (iii) the end of the remaining term of this
Agreement.

5. Change in
Control.

(a) For purposes of this Agreement,
a Change in Control shall mean an event that; (i) would be required
to be reported in response to Item 1(a) of the current report on Form 8-K, as in
effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the Exchange Act); or (ii) results in a Change
in Control of the Bank or the Company within the meaning of the Home
Owners Loan Act of 1933, as amended, the Federal Deposit Insurance Act, or
the Rules and Regulations promulgated by the Office of Thrift Supervision (or
its predecessor agency), as in effect on the date hereof (provided, that in
applying the definition of change in control as set forth under the rules and
regulations of the OTS, the Board of Directors shall substitute its judgment for
that of the OTS); or (iii) without limitation such a Change in Control shall be
deemed to have occurred at such time as (A) any person (as the 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 voting securities of the Bank or the Company
representing 20% or more of the Banks or the Companys outstanding
voting securities or right to acquire such securities except for any voting
securities of the Bank purchased by the Company and any voting securities
purchased by any employee benefit or stock-based compensation plan of the
Company or its subsidiaries; or (B) individuals who

constitute the Board of
Directors on the date hereof (the Incumbent Board) cease for any
reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters (3⁄4) of the directors comprising the
Incumbent Board, or whose nomination for election by the Companys
stockholders was approved by a Nominating Committee solely composed of members
which are Incumbent Board members, shall be, for purposes of this clause (B),
considered as though he or she were a member of the Incumbent Board; or (C) a
plan of reorganization, merger, consolidation, sale of all or substantially all
the assets of the Bank or the Company or similar transaction occurs or is
effectuated in which the Bank or Company is not the resulting entity; provided,
however, that such an event listed above will be deemed to have occurred or to
have been effectuated upon the receipt of all required federal regulatory
approvals not including the lapse of any statutory waiting periods; or (D) a
proxy statement has been distributed soliciting proxies from stockholders of the
Company, by someone other than the current management of the Company, seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Company or Bank with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to such plan or
transaction are exchanged for or converted into cash or property or securities
not issued by the Bank or the Company shall be distributed; or (E) a tender
offer is made for 20% or more of the voting securities of the Bank or Company
then outstanding.

(b) If any of the events
described in paragraph (a) of this Section 5, constituting a Change in Control,
have occurred or the Board of Directors determines that a Change in Control has
occurred, Executive shall be entitled to the benefits provided for in paragraphs
(c), (d), (e), (f) and (g) of this Section 5 upon her termination of employment
at any time during the term of this Agreement on or after the date the Change in
Control occurs due to (i) Executives dismissal, (ii) Executives
resignation following any demotion, loss of title, office or significant
authority or responsibility, reduction in annual compensation or benefits or
relocation of her principal place of employment by more than twenty-five (25)
miles from its location immediately prior to the Change in Control or (iii)
Executives resignation for any reason within the sixty (60) day period
following the date that is one year from the date the Change in Control
occurred, unless Executives termination is for Just Cause as defined in
Section 7 of this Agreement; provided, however, that such benefits shall be
reduced by any payment made under Section 4 of this Agreement.

(c) Upon the occurrence of
a Change in Control followed by Executives termination of employment, as
provided for in paragraph (b) of this Section 5, the Company shall pay
Executive, or in the event of her subsequent death, her beneficiary or
beneficiaries or her estate, as the case may be, as severance pay or liquidated
damages, or both, a sum equal to the greater of: 1) the payments and benefits
due for the remaining term of the Agreement or 2) greater of (i) five (5) times
Executives average annual compensation for the five (5) preceding taxable
years or (ii) five (5) times Executives annual compensation for the most
recent taxable year.

In determining
Executives annual compensation for purposes of this Section 5,
compensation shall include base salary and any other taxable income, including
but not limited to amounts related to the granting, vesting or exercise of
restricted stock or stock option awards (including the value realized on the
exercise of incentive stock options whether taxable or not at the time of
exercise), commissions, bonuses (whether paid or accrued for the applicable
period), as well as severance payments, retirement benefits, director or
committee fees and fringe benefits paid or to be paid to Executive or paid for
Executives benefit during any such year, profit sharing, employee stock
ownership plan and other retirement contributions or benefits, including any
tax-qualified or non-tax qualified plan or arrangement (whether or not taxable)
made or accrued on behalf of Executive of such year and the value (based on the
Black-Scholes valuation method) of stock options (based on the values determined
for purposes of the Companys FAS 123 determination in the Companys
financial statements for the year that includes and immediately follows the date
of vesting).

At the election of
Executive, which election is to be made prior to or within thirty (30) days of
the Date of Termination on or following a Change in Control, such payment may be
made in a lump sum (without discount for early payment) on or immediately
following the Date of Termination (which may be the date a Change in Control
occurs) or paid in equal monthly installments during the sixty (60) months
following Executives termination. In the event that no election is made,
payment to Executive will be made on a monthly basis during the sixty (60)
months following Executives termination.

(d) Upon the occurrence of
a Change in Control, Executive will be entitled to receive benefits due her
under or contributed by the Bank or the Company on her behalf pursuant to any
retirement, incentive, profit sharing or other retirement, bonus, performance,
disability or other employee benefit plan maintained by the Company or the Bank
on Executives behalf to the extent such benefits are not otherwise paid to
Executive under a separate provision of this Agreement. In addition, for
purposes of determining her vested accrued benefit, Executive shall be credited
either under any defined benefit pension plan maintained by the Bank or, if not
permitted under such plan, under a separate arrangement, with the additional
years of service that she would have earned for vesting and benefit
accrual purposes for the remaining term of the Agreement had her employment not
terminated.

(e) Upon the occurrence of
a Change in Control and Executives termination of employment in connection
therewith, the Company will cause to be continued life, medical and disability
coverage substantially identical to the coverage maintained by the Company or
the Bank for Executive and any of her dependents covered under such plans
immediately prior to the Change in Control. Such coverage and payments shall
cease upon the expiration of sixty (60) full calendar months following the Date
of Termination. In the event Executives participation in any such plan or
program is barred, the Company shall arrange to provide Executive and her
dependents with benefits substantially similar to those of which Executive and
her dependents would otherwise have been entitled to receive under such plans
and programs from which their continued participation is barred or at the
election of Executive, provide their economic equivalent.

(f) The use or provision of
any membership, license, automobile use, or other perquisites shall be continued
during the remaining term of the Agreement on the same financial terms and
obligations as were in place immediately prior to the Change in Control. To the
extent that any item referred to in this paragraph will, at the end of the term
of this Agreement, no longer be available to Executive, Executive will have the
option to purchase all rights then held by the Company or the Bank to such item
for a price equal to the then fair market value of the item.

(g) In the event that
Executive is receiving monthly payments pursuant to Section 5(c) hereof, on an
annual basis, thereafter, between the dates of January 1 and January 31 of each
year, Executive shall elect whether the balance of the amount payable under the
Agreement at that time shall be paid in a lump sum or on a pro rata basis
pursuant to such section. Such election shall be irrevocable for the year for
which such election is made by Executive.

6. Change in
Control Related Provisions.

(a) Notwithstanding the
preceding provisions of Section 5 of this Agreement, for any taxable year in
which Executive shall be liable for the payment of an excise tax under Section
4999 of the Code (or any successor provision thereto), with respect to any
payment in the nature of the compensation made by the Company or its
subsidiaries to (or for the benefit of) Executive pursuant to this Agreement or
otherwise, the Company (or any successor thereto) shall pay to Executive an
amount determined under the following formula:

`An amount equal to:  (E x P) + X

         WHERE:

                  X  =                    E x P
                            -------------------------------------------------------------
                           1 - [(FI x (1 - SLI)) + SLI + E + M + PO]

                                            E        =        the rate at which the  excise tax is  assessed  under
                                                              Section 4999 of the Code;`

`P        =        the amount  with  respect to which such excise tax is
                                                              assessed, determined without regard to this Section 6;

                                           FI        =        the highest marginal rate of federal income, employment,
                                                              and other taxes (other than taxes imposed under Section 4999
                                                              of the Code) applicable to Executive for the taxable year
                                                              in question (including any effective increase in Executives
                                                              tax rate attributable to the disallowance of any deduction);

                                          SLI        =        the sum of the highest marginal rates of income and payroll
                                                              tax applicable to Executive under applicable state and local
                                                              laws for the taxable year in question (including any effective
                                                              increase in Executives tax rate attributable to the disallowance
                                                              of any deduction);

                                            M        =        highest marginal rate of Medicare tax; and


                                           PO        =        adjustment for phase out of or loss of deduction, personal
                                                              exemption or other similar items.`

With respect to any payment
in the nature of compensation that is made to (or for the benefit of) Executive
under the terms of this Agreement or otherwise and on which an excise tax under
Section 4999 of the Code may or will be assessed, the payment determined under
this Section 6 shall be made to Executive on the earliest of (i) the date the
Company is required to withhold such tax, (ii) the date the tax is required to
be paid by Executive, or (iii) at the time of the Change in Control.
Notwithstanding any provision in this Agreement to the contrary is the intention
of the parties that the Company provide Executive with a full tax gross-up under
the provisions of this Section 6, so that on a net after-tax basis, the result
to Executive shall be the same as if the excise tax under Section 4999 (or any
successor provisions) of the Code had not been imposed. The payment shall be
adjusted, as appropriate, if alternative minimum tax rules under the Code are
applicable to Executive.

(b) Notwithstanding the
foregoing, if it is (i) initially determined by the Companys tax advisors
that no excise tax under Section 4999 is due with respect to any payment or
benefit described in the first paragraph of Section 6(a) and, thereafter, it is
determined in a final judicial determination or a final administrative
settlement that the Section 4999 excise tax is due with respect to such payments
or benefits or (ii) subsequently determined in a final judicial determination or
a final administrative settlement to which Executive is a party that the excise
tax under Section 4999 is due or that the excess parachute payment as defined in
Section 4999 of the Code is more than the amount determined as P,
above (such revised determination under (i) or (ii) above being thereafter
referred to as the Determinative Excess Parachute Payment), then the
tax advisors of the Company (or any successor thereto) shall determine the
amount (the Adjustment Amount), the Company (or its successor) must
pay to Executive, in order to put Executive in the same position as Executive
would have been if the amount determined as P

above had been equal
to the Determinative Excess Parachute Payment. In determining the Adjustment
Amount, the tax advisors shall take into account any and all taxes (including
any penalties of any nature and interest) paid or payable by Executive in
connection with such final judicial determination or final administrative
settlement. As soon as practicable after the Adjustment Amount has been so
determined, the Company shall pay the Adjustment Amount to Executive.

(c) The Company (or its
successor) shall indemnify and hold Executive harmless from any and all losses,
costs and expenses (including without limitation, reasonable attorneys
fees, reasonable accountants fees, interest, fines and penalties of any
kind) which Executive incurs as a result of any administrative or judicial
review of Executives liability under Section 4999 of the Code by the
Internal Revenue Service or any comparable state agency through and including a
final judicial determination or final administrative settlement of any dispute
arising out of Executives liability for the Section 4999 excise tax or
otherwise relating to the classification for purposes of Section 280G of the
Code of any payment or benefit in the nature of compensation made or provided to
Executive by the Company or any successor thereto. Executive shall promptly
notify the Company in writing whenever Executive receives notice of the
commencement of any judicial or administrative proceeding, formal or informal,
in which the federal tax treatment under Section 4999 of the Code of any amount
paid or payable under this Agreement is being reviewed or is in dispute
(including a notice of audit or other inquiry concerning the reporting of
Executives liability under Section 4999). The Company (or its successor)
may assume control at its expense over all legal and accounting matters
pertaining to such federal or state tax treatment (except to the extent
necessary or appropriate for Executive to resolve any such proceeding with
respect to any matter unrelated to amounts paid or payable pursuant to this
contract) and Executive shall cooperate fully with the Company in any such
proceeding. Executive shall not enter into any compromise or settlement or
otherwise prejudice any rights the Company (or its successor) may have in
connection therewith without prior consent to the Company (or its successor). In
the event that the Company (or any successor thereto) elects not to assume
control over such matters, the Company (or any successor thereto) shall promptly
reimburse Executive for all expenses related thereto as and when incurred upon
presentation of appropriate documentation relating thereto.

7. Termination
for Just Cause

The phrase termination for Just
Cause shall mean termination because of Executives personal
dishonesty, incompetence willful misconduct, any breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than traffic violations or similar
offenses), final cease and desist order or material breach of any provision of
this Agreement. Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for Just Cause unless and until there shall have been
delivered to her a Notice of Termination which shall include a copy of a
resolution duly adopted by the affirmative vote of not less than three-fourths
(3⁄4) of the members of the Board of Directors at a meeting of the Board of
Directors called and held for that purpose (after reasonable notice to

Executive
and an opportunity for her, together with counsel, to be heard before the Board
of Directors), finding that in the good faith opinion of the Board of Directors,
Executive was guilty of conduct justifying termination for Just Cause and
specifying the particulars thereof in detail. Executive shall not have the right
to receive compensation or other benefits for any period after termination for
Just Cause. During the period beginning on the date of the Notice of Termination
for Just Cause pursuant to Section 8 hereof through the Date of Termination,
stock options granted to Executive under any stock option plan shall not be
exercisable nor shall any unvested awards granted to Executive under any stock
benefit plan of the Bank, the Company or any subsidiary or affiliate thereof,
vest. At the Date of Termination, such stock options and any such unvested
awards shall become null and void and shall not be exercisable by or delivered
to Executive at any time subsequent to such termination for Just Cause.

8.Notice.

(a) Any purported
termination by the Company or by Executive shall be communicated by Notice of
Termination to the other party hereto. For purposes of this Agreement, a
Notice of Termination shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executives employment under the
provision so indicated.

(b) Date of
Termination shall mean the date specified in the Notice of Termination
(which, in the case of a termination for Just Cause, shall not be less than
thirty (30) days from the date such Notice of Termination is given).

(c) If, within thirty (30)
days after any Notice of Termination is given, the party receiving such Notice
of Termination notifies the other party that a dispute exists concerning the
termination, except upon the occurrence of a Change in Control and voluntary
termination by Executive in which case the Date of Termination shall be the date
specified in the Notice, the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award or by a final judgment, order or decree
of a court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected), and provided further that the Date
of Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay Executive her full compensation in
effect when the notice giving rise to the dispute was given (including, but not
limited to, base salary) and continue her as a participant in all compensation,
benefit and insurance plans in which she was participating when the notice of
dispute was given, until the dispute is finally resolved in accordance with this
Agreement. Amounts paid pursuant to this provision shall be in addition to all
other amounts due under this Agreement and shall not be offset against or reduce
any other amounts due under this Agreement.

9.Post-Termination Obligations.

All payments and benefits
to Executive under this Agreement shall be subject to Executives
compliance with this Section 9 for one (1) full year after the earlier of the
expiration of this Agreement or termination of Executives employment with
the Company. Executive shall, upon reasonable notice, furnish such information
and assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party.

10.Non-Competition and Non-Disclosure.

(a) Upon any termination of
Executives employment pursuant to Section 4 of this Agreement, Executive
agrees not to compete with the Company or its subsidiaries for a period of one
(1) year following such termination in any city, town or county in which
Executives normal business office is located and the Company or any of its
subsidiaries has an office or has filed an application for regulatory approval
to establish an office, determined as of the effective date of such termination,
except as agreed to pursuant to a resolution duly adopted by the Board of
Directors. Executive agrees that during such period and within said cities,
towns and counties, Executive shall not work for or advise, consult or otherwise
serve with, directly or indirectly, any entity whose business materially
competes with the depository, lending or other business activities of the
Company or its subsidiaries. The parties hereto, recognizing that irreparable
injury will result to the Company or its subsidiaries, its business and property
in the event of Executives breach of this Subsection 10(a) agree that in
the event of any such breach by Executive, the Company or its subsidiaries, will
be entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executives
partners, agents, servants, employees and all persons acting for or under the
direction of Executive. Executive represents and admits that in the event of the
termination of her employment pursuant to Section 4 of this Agreement,
Executives experience and capabilities are such that Executive can obtain
employment in a business engaged in other lines and/or of a different nature
than the Company or its subsidiaries, and that the enforcement of a remedy by
way of injunction will not prevent Executive from earning a livelihood. Nothing
herein will be construed as prohibiting the Company or its subsidiaries from
pursuing any other remedies available to the Company or its subsidiaries for
such breach or threatened breach, including the recovery of damages from
Executive.

(b) Executive recognizes
and acknowledges that the knowledge of the business activities and plans for
business activities of the Company and its subsidiaries as it may exist from
time to time, is a valuable, special and unique asset of the business of the
Company and its subsidiaries. Executive will not, during or after the term of
her employment, disclose any knowledge of the past, present, planned or
considered business activities of the Company and its subsidiaries thereof to
any person, firm, corporation or other entity for any reason or purpose
whatsoever unless expressly authorized by the Board of Directors or required by
law. Notwithstanding the foregoing, Executive may disclose any knowledge of
banking, financial and/or economic

principles, concepts or ideas which are not
solely and exclusively derived from the business plans and activities of the
Company or its subsidiaries. In the event of a breach or threatened breach by
Executive of the provisions of this Section 10(b), the Company will be entitled
to an injunction restraining Executive from disclosing, in whole or in part, the
knowledge of the past, present, planned or considered business activities of the
Company or its subsidiaries or from rendering any services to any person, firm,
corporation or other entity to whom such knowledge, in whole or in part, has
been disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Company from pursuing any other remedies available
to the Company for such breach or threatened breach, including the recovery of
damages from Executive.

11.Death and Disability.

(a) Death.
Notwithstanding any other provision of this Agreement to the contrary, in the
event of Executives death during the term of this Agreement, the Company
shall immediately pay her estate any salary and bonus accrued but unpaid as of
the date of her death, and, for a period of six (6) months after
Executives death, the Company shall continue to provide her dependents
medical insurance benefits existing on the date of her death and shall pay
Executives designated beneficiary all compensation that would otherwise be
payable to her pursuant to Section 3(a) of this Agreement. This provision shall
not negate any rights Executive or her beneficiaries may have to death benefits
under any employee benefit plan of the Company or the Bank.

(b)Disability

(i)       The  Company  or  Executive  may  terminate  Executive's   employment  after  having  established
Executive's  Disability.  For purposes of this agreement,  "Disability"  means a physical or mental  infirmity that
impairs  Executive's  ability  to  substantially  perform  her  duties  under this  Agreement  and that  results in
Executive  becoming  eligible  for  long-term  disability  benefits  under the  Company's  or the Bank's  long-term
disability  plan (or, if the Company or the Bank has no such plan in effect,  that impairs  Executive's  ability to
substantially  perform  her duties  under this  Agreement  for a period of one  hundred  eighty  (180)  consecutive
days).  The Board of  Directors  shall  determine  whether or not  Executive  is and  continues  to be  permanently
disabled for purposes of this Agreement in good faith,  based upon competent  medical advice and other factors that
they  reasonably  believe to be  relevant.  As a condition  to any  benefits,  the Board of  Directors  may require
Executive to submit to such physical or mental evaluations and tests as it deems reasonably appropriate.

(ii)       In the event of  Disability,  Executive's  obligation to perform  services  under this  Agreement
will  terminate.  In the event of such  termination,  Executive  shall continue to receive (x) one hundred  percent
(100%) of her  monthly  Base  Salary  (at the annual  rate in effect on the Date of  Termination)  through  the one
hundred  eightieth  (180th) day following  the Date of  Termination  by reason of Disability  and (y) sixty percent
(60%) of her monthly base salary from

the one hundred  eighty-first  (181st) day following  termination through the
earlier of the date of her death or the date she attains age 65.  Such  payments  shall be reduced by the amount of
any short- or long-term  disability  benefits  payable to Executive under any disability  program  sponsored by the
Company or the Bank.  In  addition,  during any period of  Executive's  Disability,  Executive  and her  dependents
shall,  to the  greatest  extent  possible,  continue to be covered  under all benefit  plans  (including,  without
limitation,  retirement  plans and medical,  dental and life  insurance  plans) of the Company or the Bank in which
Executive  participated prior to the occurrence of Executive's  Disability,  on the same terms as if Executive were
actively employed by the Company.

12.Source of Payments.

(a) All payments provided
for in this Agreement shall be timely paid in cash or check from the general
funds of the Company subject to Section 12(b).

(b) Notwithstanding any
provision herein to the contrary, to the extent that payments and benefits, as
provided by this Agreement, are paid to or received by Executive under the
Employment Agreement in effect between Executive and the Bank (the Bank
Agreement), such compensation payments and benefits paid by the Bank will
be subtracted from any amount due simultaneously to Executive under similar
provisions of this Agreement. Payments pursuant to this Agreement and the Bank
Agreement shall be allocated in proportion to the level of activity and the time
expended on such activities by Executive as determined by the Company and the
Bank.

13.Effect of Prior Agreements and Existing Benefit Plans.

This Agreement contains the
entire understanding between the parties hereto and supersedes any prior
employment agreement between the Company or any predecessor of the Company and
Executive, except that this Agreement shall not affect or operate to reduce any
benefit or compensation inuring to Executive of a kind elsewhere provided. No
provision of this Agreement shall be interpreted to mean that Executive is
subject to receiving fewer benefits than those available to her without
reference to this Agreement.

14. No Attachment.

(a) Except as required by
law, no right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance, charge,
pledge or hypothecation, or to execution, attachment, levy or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
affect any such action shall be null, void and of no effect.

(b) This Agreement shall be
binding upon, and inure to the benefit of, Executive, the Company and their
respective successors and assigns.

15. Modification and Waiver.

(a)      This  Agreement may not be modified or amended  except by an  instrument in writing  signed by the parties
hereto.

(b) No term or condition of
this Agreement shall be deemed to have been waived, nor shall there be any
estoppel against the enforcement of any provision of this Agreement, except by
written instrument of the party charged with such waiver or estoppel. No such
written waiver shall be deemed a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or
condition waived and shall not constitute a waiver of such term or condition for
the future as to any act other than that specifically waived.

16. Severability.

If, for any reason, any
provision of this Agreement, or any part of any provision, is held invalid, such
invalidity shall not affect any other provision of this Agreement or any part of
such provision not held so invalid, and each such other provision and part
thereof shall to the full extent consistent with law continue in full force and
effect.

17. Headings for Reference Only.

The headings of sections and
paragraphs herein are included solely for convenience of reference and shall not
control the meaning or interpretation of any of the provisions of this
Agreement.

18. Governing Law.

This Agreement shall be
governed by the laws of the State of Delaware without regard to principles of
conflicts of law of that State.

19. Arbitration.

Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration, conducted before a panel of three (3) arbitrators sitting in a
location selected by Executive within fifty (50) miles from the location of the
Bank, in accordance with the rules of the American Arbitration Association then
in effect. Judgment may be entered on the arbitrators award in any court
having jurisdiction; provided, however, that Executive shall be entitled to seek
specific performance of her right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in connection
with this Agreement.

In the event any dispute or
controversy arising under or in connection with Executives termination is
resolved in favor of Executive, whether by judgment, arbitration or settlement,
Executive shall be entitled to the payment of all back-pay, including salary,
bonuses and any

other cash compensation, fringe benefits and any compensation
and benefits due Executive under this Agreement.

20.Payment of Legal Fees.

All reasonable legal fees
paid or incurred by Executive pursuant to any dispute or question of
interpretation relating to this Agreement shall be paid or reimbursed by the
Company, only if Executive is successful pursuant to a legal judgment,
arbitration or settlement.

21.Indemnification.

(a) The Company shall
provide Executive (including her heirs, executors and administrators) with
coverage under a standard directors and officers liability insurance
policy at its expense and shall indemnify Executive (and her heirs, executors
and administrators) to the fullest extent permitted under Delaware law against
all expenses and liabilities reasonably incurred by her in connection with or
arising out of any action, suit or proceeding in which she may be involved by
reason of her having been a director or officer of the Company (whether or not
she continues to be a director or officer at the time of incurring such expenses
or liabilities), such expenses and liabilities to include, but not be limited
to, judgments, court costs and attorneys fees and the cost of reasonable
settlements.

(b) Any payments made to
Executive pursuant to this Section are subject to and conditioned upon
compliance with 12 U.S.C. Section 1828(k) and 12 C.F.R. Part 359 and any rules
or regulations promulgated thereunder.

22.Successor to the Company.

The
Company shall require any successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Bank or the Company, expressly and unconditionally to assume and agree to perform the Companys
obligations under this Agreement, in the same manner and to the same extent that
the Company would be required to perform if no such succession or assignment had taken place.

IN WITNESS WHEREOF,
Northeast Pennsylvania Financial Corp. has caused this Agreement to be executed
and its seal to be affixed hereunto by its duly authorized officer and its
directors, and Executive has signed this Agreement, on the 29th day of March,
2002.

`ATTEST:                                         NORTHEAST PENNSYLVANIA FINANCIAL CORP.



/s/ Megan Kennedy                             By:/s/ Thomas Kennedy
------------------------------------             -----------------------------------------------------
Corporate Secretary                                  For the Entire Board of Directors



                  [SEAL]


WITNESS:                                         EXECUTIVE, E. Lee Beard



/s/ Megan Kennedy                                /s/ E. Lee Beard
------------------------------------             ----------------------------------------------------------
Corporate Secretary`