This AGREEMENT(Agreement) originally entered into as of March 31, 1998, is
amended and restated effective as of January 1, 2002, by and between First
Federal Bank (the Bank), a federally-chartered financial
institution, with its principal offices at 12 Broad Street, Hazleton,
Pennsylvania, 18201, Northeast Pennsylvania Financial Corp. (the
Company), a corporation organized under the laws of the state of
Delaware and the holding company of the Bank, and E. Lee Beard(Executive).

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

WHEREAS, Executive and the
Board of Directors of the Bank 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 Bank. Executive shall have
responsibility for the general management and control of the business and
affairs of the Bank and its subsidiaries, and shall perform all duties and shall
have all powers which are commonly incident to the offices of 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 Bank.

(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 Bank and its subsidiaries, as well as participation in
community, professional and civic organizations; provided, however, that, with
the approval of the Board of Directors, as evidenced by a resolution of the
Board of Directors, from time to time, Executive may serve, or continue to
serve, on the boards of directors of, and hold any other offices or positions
in, companies or organizations, which, in the judgment of the Board of

Directors, will not present any conflict of interest with the Bank or its
subsidiaries, or materially affect the performance of Executives duties
pursuant to this Agreement.

(c) The Bank will furnish
Executive with the working facilities and staff customary for executive officers
with the title 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 Bank.

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 first
anniversary of the Effective Date and on each anniversary thereafter, the
disinterested members of the Board of Directors may renew the term of this
Agreement for an additional one (1) year period beyond the then effective
expiration, provided that Executive shall not have given at least sixty (60)
days written notice of her desire that the term not be renewed.

(c) Notwithstanding
anything contained in this Agreement to the contrary, either Executive or the
Bank may terminate Executives employment with the Bank 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
Bank 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 Banks
customary payroll practices. The Board of Directors of the Bank 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 Bank,
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 fees for serving as a director of the
Bank or as a member of any committee of the Board of Directors in amounts equal
to the other

members of the Board of Directors of the Bank. Board fees paid to
Executive shall be in addition to and not in lieu of any other remuneration
provided for 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
- West Moreland 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 Bank 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 Bank.

(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 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 Bank offers to full-time employees or executive management in
the future. 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 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 Bank 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 Bank, 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 Bank 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 Bank or 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 Bank
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); (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 Bank 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) three (3) times Executives average
annual compensation for the five (5) preceding taxable years.

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 Bank 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
provisions of Section 5, in no event shall the aggregate payments or benefits to
be made or afforded to Executive under said paragraphs (the Termination
Benefits) constitute an excess parachute payment under Section
280G of the Code or any successor thereto, and in order to avoid such a result,
Termination Benefits will be reduced, if necessary, to an amount (the
Non-Triggering Amount), the value of which is one dollar ($1.00)
less than an amount equal to three (3) times Executives base
amount, as determined in accordance with said Section 280G. The allocation
of the reduction required hereby among the Termination Benefits provided by
Section 5 shall be determined by Executive.

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 Bank 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 Bank. Executive shall, upon reasonable notice, furnish such information and
assistance to the Company as may reasonably be required by the Bank 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 Bank 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 Bank 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 Bank
or its subsidiaries. The parties hereto, recognizing that irreparable injury
will result to the Bank 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 Bank 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 Bank 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 Bank or its subsidiaries from
pursuing any other remedies available to the Bank 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 Bank and its subsidiaries as it may exist from time
to time, is a valuable, special and unique asset of the business of the Bank 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 Bank 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 Bank or its
subsidiaries. In the event of a breach or threatened breach by Executive of the
provisions of this Section 10(b), the Bank 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 Bank 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 Bank from pursuing any other remedies available to the Bank 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 Bank
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 Bank 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 Bank 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 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
in this Agreement shall be timely paid in cash or check from the general funds
of the Bank. The Company, however, unconditionally guarantees payment and
provision of all amounts and benefits due hereunder to Executive and, if such
amounts and benefits due from the Bank are not timely paid or provided by the
Bank, such amounts and benefits shall be paid or provided by the Company.

(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 Company (the
Company Agreement), such compensation payments and benefits paid by
the Company will be subtracted from any amount due simultaneously to Executive
under similar provisions of this Agreement. Payments pursuant to this Agreement
and the Company 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 Bank or any predecessor of the Bank 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 Bank and Company and
their respective successors and assigns.

15.               Modification and Waiver.

(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 Pennsylvania 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
Bank, only if Executive is successful pursuant to a legal judgment, arbitration
or settlement.

21.               Indemnification.

(a) The Bank 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 applicable 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 Bank (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.

22.               Successor to the Bank and the Company.

The Bank and 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 Banks and the Companys obligations
under this Agreement, in the same manner and to the same extent that the Bank
and the Company would be required to perform if no such succession or assignment
had taken place.

23.               Required Provisions.

(a) The Bank may terminate
Executives employment at any time, but any termination by the Bank, other
than termination for Just Cause, shall not prejudice Executives right to
receive compensation or other benefits under this Agreement. Executive shall not
have the right to receive compensation or other benefits for any period after
termination for Just Cause as defined in Section 7 of this Agreement.

(b) If Executive is
suspended from office and/or temporarily prohibited from participating in the
conduct of the Banks affairs by a notice served under Section 8(e)(3) or
8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(3) or
(g)(1); the Bank s obligations under this contract 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 their contract obligations were
suspended; and (ii) reinstate (in whole or in part) any of the obligations which
were suspended.

(c) If Executive is removed
and/or permanently prohibited from participating in the conduct of the
Banks affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. §1818(e)(4) or (g)(1), all
obligations of the Bank under this contract shall terminate as of the effective
date of the order, but vested rights of the contracting parties shall not be
affected.

(d) If the Bank is in
default as defined in Section 3(x)(1) of the Federal Deposit Insurance Act, 12
U.S.C. §1813(x)(1) all obligations of the Bank under this contract shall
terminate as of the date of default, but this paragraph shall not affect any
vested rights of the contracting parties.

(e) All obligations of the
Bank under this contract shall be terminated, except to the extent determined
that continuation of the contract is necessary for the continued operation of
the institution: (i) by the Director of the OTS (or her designee), the FDIC or
the Resolution Trust Corporation, at the time the FDIC enters into an agreement
to provide assistance to or on behalf of the Bank under the authority contained
in Section 13(c) of the Federal Deposit Insurance Act, 12 U.S.C. §1823(c);
or (ii) by the Director of the OTS (or her designee) at the time the Director
(or her designee) approves a supervisory merger to resolve problems related to
the operations of the Bank or when the Bank is determined by the Director to be
in an unsafe or unsound condition. Any rights of the parties that have already
vested, however, shall not be affected by such action.

(f)      Any payments made to Executive  pursuant to this Agreement,  or otherwise,  are subject to and conditioned
upon  compliance  with 12  U.S.C.ss.1828(k)  and 12 C.F.R.ss.545.121  and any  rules  and  regulations  promulgated
thereunder.

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:                                        FIRST FEDERAL BANK



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



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`