EXHIBIT 10.4
                                 EAST PENN BANK
                SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT
                                       FOR
                                 BRENT L. PETERS

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                                 EAST PENN BANK
                SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT
                                       FOR
                                 BRENT L. PETERS

      THIS AGREEMENT is made and entered into this 31st day of May, 2001, by and
between EAST PENN BANK, a Pennsylvania banking institution having a place of
business at 731 Chestnut Street, Emmaus, Pennsylvania 18049 ("Bank"), and BRENT
L. PETERS ("Executive"), an individual residing at 3837 East View Drive,
Orefield, Pennsylvania 18069. This Agreement shall append the Split Dollar
Endorsement entered into on __________________, ______, or as subsequently
amended, by and between the aforementioned parties.

                                  INTRODUCTION

      To encourage Executive to remain an employee of Bank, Bank is willing to
provide to Executive with supplemental retirement benefits or to divide the
death proceeds of two life insurance policies on Executive's life. Bank will pay
the benefits and the life insurance premiums from its general assets.

                                    Article 1
                               General Definitions

      The following terms shall have the meanings specified:

      1.1 "Affiliate" means any company that controls, is controlled by, or is
under common control with Bank. For this Agreement, company includes any bank,
corporation, general or limited partnership, limited liability companies,
association or similar organization, business trust, or any other trust.

      1.2 "Change in Control" means any of the following:

            (A)   (A) a merger, consolidation or division involving Bank, (B) a
                  sale, exchange, transfer or other disposition of substantially
                  all of the assets of Bank, or (C) a purchase by Bank of
                  substantially all of the assets of another entity, unless (y)
                  such merger, consolidation, division, sale, exchange,
                  transfer, purchase or disposition is approved in advance by
                  seventy-five percent (75%) or more of the members of the Board
                  of Directors of Bank who are not interested in the transaction
                  and (z) a majority of the members of the Board of Directors of
                  the legal entity resulting from or existing after any such
                  transaction and of the Board of Directors of such entity's
                  parent corporation, if any, are former members of the Board of
                  Directors of Bank; or



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            (B)   any "person" (as such term is used in Sections 13(d) and 14(d)
                  of the Securities Exchange Act of 1934 (the "Exchange Act")),
                  other than Bank or any "person" who on the date hereof is a
                  director or officer of Bank, is or becomes the "beneficial
                  owner" (as defined in Rule 13d-3 under the Exchange Act),
                  directly or indirectly, of securities of Bank representing
                  twenty-five (25%) percent or more of the combined voting power
                  of Bank's then outstanding securities, or

            (C)   during any period of two (2) consecutive years during the term
                  of Executive's employment under this Agreement, individuals
                  who at the beginning of such period constitute the Board of
                  Directors of Bank cease for any reason to constitute at least
                  a majority thereof, unless the election of each director who
                  was not a director at the beginning of such period has been
                  approved in advance by directors representing at least
                  two-thirds of the directors then in office who were directors
                  at the beginning of the period; or

            (D)   any other change in control of Bank similar in effect to any
                  of the foregoing.

      Notwithstanding anything else to the contrary set forth in this Agreement,
if (i) an agreement is executed by Bank providing for any of the transactions or
events constituting a Change in Control as defined herein, and the agreement
subsequently expires or is terminated without the transaction or event being
consummated, and (ii) Executive's employment did not terminate during the period
after the agreement and prior to such expiration or termination, for purposes of
this Agreement it shall be as though such agreement was never executed and no
Change in Control event shall be deemed to have occurred as a result of the
execution of such agreement.

      1.3 "Disability" means Executive suffering a physical or mental
impairment, which, in the judgment of a physician satisfactory to Bank, prevents
Executive from performing all of the essential job functions of Executive's
position on a full time basis with or without reasonable accommodation and
without posing a direct threat to himself or others, for a period of one hundred
eighty days. As a condition to any benefits, Bank may require Executive to
submit to such physical or mental evaluations and tests as Bank's Board of
Directors deems appropriate.

      1.4 "Bank" or "Corporation" means East Penn Bank

      1.5 "Insured" means Executive.

      1.6 "Insurer" means The MONY Group and ING Southland.

      1.7 "Policy" means The MONY Group insurance policy no. B25014666 and ING
Southland insurance policy no. 06 009 3702.



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      1.8 "Net Death Proceeds" means the death proceeds of the Policy, in the
aggregate amount as provided in the attached endorsements.

      1.9 "Normal Retirement Age" means 62 years old.

      1.10 "Code" means the Internal Revenue Code of 1986, as amended.

      1.11 "Employment Agreement" means the Employment Agreement entered into
between Bank and Insured, dated April 12, 2001.

                                    Article 2
                                Lifetime Benefits

      2.1 Normal Retirement Benefit. If Executive terminates employment on or
after the Normal Retirement Age for reasons other than death, Bank shall pay to
Executive the benefit described in this Section 2.1

      2.1.1 Amount of Benefit. The benefit under this Section 2.1 is $60,000 per
year.

      2.1.2 Payment of Benefit. Bank shall pay the benefit to Executive on the
first day of the month following the Executive's birthday, commencing with the
month following the month in which Executive reaches Normal Retirement Age and
continuing for 15 years.

      2.2 Early Termination Benefit. If Executive's employment is terminated
before the Normal Retirement Age absent a change of control and for reasons of
Executive's voluntary termination of employment, non-renewal of the Employment
Agreement, Disability, or if Bank terminates Executive's employment for reasons
other than for Cause, Bank shall pay to Executive the benefit described in this
Section 2.2.

      2.2.1 Amount of Benefit. The Executive's benefit under this Section 2.2 is
the amount accrued for the benefit set forth in Section 2.1, as calculated in
accordance with GAAP and reflected in the accounting records of Bank, on the
date of termination of Executive's employment.

      2.2.2 Payment of Benefit. Bank shall pay, pro rata, the benefit to
Executive on the first day of the month following Executive's birthday,
commencing with the month following the month in which Executive reaches Normal
Retirement Age and continuing for 15 years.

      2.3 Change of Control Benefit. If Executive is actively employed by Bank
at the time of a Change of Control, Section 10.4 shall not apply and Bank shall
pay to Executive the benefit described in this Section 2.1.

      2.3.1 Payment of Benefit. Bank shall pay the benefit to Executive on the
first day of the month following Executive's birthday, commencing with the month
following the month in



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which Executive reaches Normal Retirement Age and continuing for 15 years.

      2.4 Exclusive Benefits. Any Lifetime Benefits paid under this Agreement
are exclusive; if Lifetime Benefits are paid, no Death Benefits will be paid
under this Agreement or the appended Endorsements.

                                    Article 3
                                 Death Benefits

      3.1 Death Before Normal Retirement Age. If Executive dies while actively
employed by Bank before reaching the Normal Retirement Age, Executive's
beneficiary shall receive from the Insurer the benefit described in this Section
3.1.

      3.1.1 Amount of Benefit. The benefit under Section 3.1 is a death benefit
in the amount as reflected in Schedule 3.1.1. The benefit paid is determined by
the Plan Year in which Executive dies. For example, if Executive dies in Plan
Year 1, the benefit is $209,915. Plan Year 1 commences on the date this
Agreement is executed and ends one year later. Plan Year 2 commences at the end
of Plan Year 1 and ends one year later. Each subsequent Plan Year runs
similarly. If such death benefit is paid, no Lifetime Benefits under this
Agreement will be paid.

      3.1.2 Payment of Benefit. The benefit shall be paid to the beneficiary by
Insurer, as provided in the Policy.

      3.2 Death After Normal Retirement Age, But Before Receipt of Lifetime
Benefits. If Executive dies after reaching the Normal Retirement Age, but before
receiving any Lifetime Benefit payments under this Agreement, the death benefit
identified in Section 3.1 shall be paid in accordance with Section 3.1.2. If
such death benefit is paid, no Lifetime Benefits under this Agreement will be
paid.

      3.3 Death Following Normal Retirement Age, But After Receipt of Lifetime
Benefits. In the event Executive dies after Normal Retirement Age and after the
Executive has begun to receive any Lifetime Benefits from the Bank, the Bank
shall continue to pay those benefits, as provided in Article 2, and the
Executive, Executive's estate or beneficiaries shall have no right to receive a
death benefit and the rights under the endorsements are terminated.

      3.4 Death After Change of Control. If Executive dies following a Change of
Control, but prior to the commencement of the Lifetime Benefit payments,
provided Executive was actively employed at the time of the Change of Control,
Executive's beneficiary shall be paid the death benefit described in Section 3.1
in accordance with Section 3.1.2. If such death benefit is paid, no Lifetime
Benefits under this Agreement will be paid.

      3.4.1 Payment of Benefit. The benefit shall be paid to the beneficiary by
Insurer in accordance with Section 3.1.2.



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      3.5 Endorsement. All death benefits paid under this Agreement shall be in
accordance with and as designated by the appended endorsements.

                                    Article 4
                           Policy Ownership/Interests

      4.1 Bank Ownership. Bank is the sole owner of the Policy and shall have
the right to exercise all incidents of ownership. Bank shall be the beneficiary
of the death proceeds of the Policy remaining after Executive's interest is
determined according to Section 4.2 below.

      4.2 Executive's Interest. Subject to the provisions of Article 10,
Executive shall have the right to designate the beneficiary of the Net Death
Proceeds. Executive shall also have the right to elect and change settlement
options that may be permitted.

      4.3 Comparable Coverage. Upon execution of this Agreement, Bank shall
maintain the Policy in full force and effect and in no event shall Bank amend,
terminate or otherwise abrogate Executive's interest in the Policy, unless Bank
replaces the Policy with a comparable insurance policy to cover the benefit
provided under this Agreement. The Policy or any comparable policy shall be
subject to the claims of Bank's creditors.

      4.4 Option to Purchase. Bank shall not sell, surrender or transfer
ownership of the Policy while this Agreement is in effect without first giving
Executive or Executive's transferee the option to purchase the Policy for a
period of 60 days from written notice of such intention. The purchase price
shall be an amount equal to the cash surrender value of the Policy. This
provision shall not apply if the Agreement has terminated pursuant to Article 9.

                                    Article 5
                                    Premiums

      5.1 Premium Payment. Bank shall pay any premiums due on the Policy.

      5.2 Imputed Income. Bank shall impute income to Executive in an amount
equal to the current term rate for Executive's age multiplied by the aggregate
death benefit payable to Executive's beneficiary. The "current term rate" is the
minimum amount required to be imputed under Revenue Rulings 64-328 and 66-110,
or any subsequent applicable authority.

                                    Article 6
                                   Assignment

      Executive may assign without consideration all interests in the Policy and
in this Agreement to any person, entity or trust. In the event Executive
transfers all of Executive's interest in the Policy, then all of Executive's
interest in the Policy and in the Agreement shall be vested in Executive's
transferee, who shall be substituted as a party hereunder and Executive shall
have no further interest in the Policy or in this Agreement.



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                                    Article 7
                                     Insurer

      The Insurer shall be bound only by the terms of the Policy. Any payments
the Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and demands of all entities or persons. The
Insurer shall not be bound by or be deemed to have notice of the provisions of
this Agreement.

                                    Article 8
                                Claims Procedure

      8.1 Claims Procedure. Bank shall notify any person or entity that makes a
claim under this Agreement (the "Claimant') in writing, within 90 days of
Claimant's written application for benefits, of his or her eligibility or
ineligibility for benefits under this Agreement. If Bank determines that the
Claimant is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of this Agreement on which the denial is based, (3) a description of
any additional information or material necessary for the Claimant to perfect his
or her claim, and a description of why it is needed, and (4) an explanation of
this Agreement's claims review procedure and other appropriate information as to
the steps to be taken if the Claimant wishes to have the claim reviewed. If Bank
determines that there are special circumstances requiring additional time to
make a decision, Bank shall notify the Claimant of the special circumstances and
the date by which a decision is expected to be made, and may extend the time for
up to an additional 90 days.

      8.2 Review Procedure. If the Claimant is determined by Bank not to be
eligible for benefits, or if the Claimant believes that he or she is entitled to
greater or different benefits, the Claimant shall have the opportunity to have
such claim reviewed by Bank by filing a petition for review with Bank within 60
days after receipt of the notice issued by Bank. Said petition shall state the
specific reasons which the Claimant believes entitle him or her to benefits or
to greater or different benefits. Within 60 days after receipt by Bank of the
petition, Bank shall afford the Claimant (and counsel, if any) an opportunity to
present his or her position to Bank verbally or in writing, and the Claimant (or
counsel) shall have the right to review the pertinent documents. Bank shall
notify the Claimant of its decision in writing within the sixty-day period,
stating specifically the basis of its decision, referencing the specific
provisions of this Agreement on which the decision is based. If, because of the
need for a hearing, the 60-day period is not sufficient, the decision may be
deferred for up to another 60-day period at the election of Bank, but notice of
this deferral shall be given to the Claimant.

                                    Article 9
                           Amendments and Termination

      This Agreement may be amended or terminated only by a written agreement
signed by



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Bank and Executive, except as provided in Article 10.

                                   Article 10
                               General Limitations

      10.1 Excess Parachute or Golden Parachute Payment. Notwithstanding any
provision of this Agreement to the contrary, any benefit provided under this
Agreement, when added to all other amounts or benefits provided to or on behalf
of Executive in connection with his termination of employment, would result in
the imposition of an excise tax under Code Section 4999, such payments shall be
retroactively (if necessary) reduced to the extent necessary to avoid such
excise tax imposition or shall be forfeited to the extent the benefit would be a
prohibited golden parachute payment pursuant to 12 C.F.R. ss.359.2 and for which
the appropriate federal banking agency has not given written consent to pay
pursuant to 12 C.F.R. ss.359.4. Upon written notice to Executive, together with
calculations of Bank's independent auditors, Executive shall remit to Bank the
amount of the reduction plus such interest as may be necessary to avoid the
imposition of such excise tax. Notwithstanding the foregoing or any other
provision of this contract to the contrary, if any portion of the amount herein
payable to the Executive is determined to be non-deductible pursuant to the
regulations promulgated under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), the Corporation shall be required only to pay to
Executive the amount determined to be deductible under Section 280G.

      10.2 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the benefit provided under this Agreement shall be
forfeited if Bank terminates Executive's employment for:

            (A)   Executive's conviction of or plea of guilty or nolo contendere
                  to a felony, a crime of falsehood or a crime involving moral
                  turpitude, or the actual incarceration of Executive for a
                  period of thirty (30) consecutive days or more;

            (B)   Executive's failure to follow the good faith lawful
                  instructions of the Board of Directors of Bank with respect to
                  its operations, after written notice from Bank and a failure
                  to cure such violation within sixty (60) days of said written
                  notice;

            (C)   Executive's willful failure to substantially perform
                  Executive's duties for Bank, other than a failure resulting
                  from Executive's incapacity because of physical or mental
                  illness, as provided in subsection (d) of this Section 4,
                  after written notice from Bank and a failure to cure such
                  violation within sixty (60) days of said written notice;

            (D)   Executive's intentional violation of the provisions of this
                  Agreement, after written notice from Bank and a failure to
                  cure such violation within sixty



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                  (60) days of said written notice;

            (E)   dishonesty of Executive in the performance of his duties;

            (F)   gross misconduct on the part of Executive as determined by an
                  affirmative vote of eighty percent (80%) of the disinterested
                  members of the Board of Directors which brings public
                  discredit to Bank;

            (G)   Executive's breach of fiduciary duty involving personal
                  profit; or

            (H)   Executive's willful violation of any law, rule or regulation
                  governing banks or bank officers or any final cease and desist
                  order issued by a bank regulatory authority, unless
                  Executive's conduct that lead to the violation was authorized
                  by or occurred at the instruction of Bank's Board of
                  Directors.

      10.3 Removal. Notwithstanding any provision of this Agreement to the
contrary, Bank shall not pay any benefit under this Agreement if Executive is
subject to a final removal or prohibition order issued by an appropriate federal
banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

      10.4 Competition After Termination of Employment. Executive shall forfeit
his right to any further benefits if Executive, without the prior written
consent of Bank, violates the following described restrictive covenants.

            10.4.1  Covenant Not to Compete. Executive hereby acknowledges and
                    recognizes the highly competitive nature of the business of
                    Bank and accordingly agrees that, during, for and after the
                    term of his employment with Bank and until Executive reaches
                    the age of sixty-five (65), Executive shall not, except as
                    otherwise permitted in writing by Bank:

                    (i)   be engaged, directly or indirectly, either for his own
                          account or as agent, consultant, employee, partner,
                          officer, director, proprietor, investor (except as an
                          investor owning less than 5% of the stock of a
                          publicly owned company) or otherwise of any person,
                          firm, corporation or enterprise engaged in (1) the
                          banking (including bank or financial institution
                          holding company), insurance or financial services
                          industry, or (2) any other activity in which Bank is
                          engaged during the Employment Period, and remain so
                          engaged at the end of the Employment Period, in any
                          area in which, at any time during the Employment
                          Period or at the date of termination of Executive's
                          employment, is within twenty (20) miles of any branch
                          location, office or other facility of Bank, unless
                          Executive



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                          exclusively performs all such activity outside of said
                          twenty (20) mile area (the "Non-Competition Area"); or

                    (ii)  provide financial or other assistance to any person,
                          firm, corporation, or enterprise engaged in (1) the
                          banking (including bank or financial institution
                          holding company), insurance or financial services
                          industry, or (2) any other activity in which Bank is
                          engaged during the Employment Period, in the
                          Non-Competition Area; or

                    (iii) if employed in a capacity provided in (i) and (ii),
                          solicit current customers, during the term of this
                          Agreement, of Bank in the Non-Competition Area; or

                    (iv)  solicit employees of Bank who are employed during the
                          term of this Agreement.

            10.4.2  Judicial Remedies. In the event of a breach or threatened
                    breach by Executive of any provision of these restrictions,
                    Executive recognizes the substantial and immediate harm that
                    a breach or threatened breach will impose upon Bank or any
                    of its subsidiaries or Affiliates, and further recognizes
                    that in such event monetary damages may be inadequate to
                    fully protect Bank or any of its subsidiaries or Affiliates.
                    Accordingly, in the event of a breach or threatened breach
                    of this Agreement, Executive consents to Bank's or any of
                    its subsidiaries or Affiliates' entitlement to such
                    preliminary, interlocutory, temporary or permanent
                    injunctive, or any other equitable relief, protecting and
                    fully enforcing Bank's or any of its subsidiaries or
                    Affiliates' rights hereunder and preventing Executive from
                    further breaching any of his obligations set forth herein.
                    Executive expressly waives any requirement, based on any
                    statute, rule of procedure, or other source, that Bank or
                    any of its subsidiaries or Affiliates post a bond as a
                    condition of obtaining any of the above-described remedies.
                    Nothing herein shall be construed as prohibiting Bank or any
                    of its subsidiaries or Affiliates from pursuing any other
                    remedies available to Bank or any of its subsidiaries or
                    Affiliates at law or in equity for such breach or threatened
                    breach, including the recovery of damages from Executive.
                    Executive expressly acknowledges and agrees that: (i) the
                    restrictions set forth in Section 10.4.1 are reasonable, in
                    terms of scope, duration, geographic area, and otherwise,
                    (ii) the protections afforded Bank or any of its
                    subsidiaries or Affiliates in Section 10.4.1 are necessary
                    to protect its legitimate business interest, (iii) the
                    restrictions set forth in Section 10.4.1 will not be
                    materially adverse to Executive's employment with Bank, and
                    (iv) his agreement to observe such restrictions



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                    forms a material part of the consideration for this
                    Agreement.

            10.4.3  Overbreadth of Restrictive Covenant. It is expressly
                    understood and agreedthat, although Executive and Bank
                    consider the restrictions contained in Section 10.4.1 hereof
                    reasonable for the purpose of preserving for Bank its good
                    will and other proprietary rights, if a final judicial
                    determination is made by a court having jurisdiction that
                    the time or territory or any other restriction contained in
                    Section 10.4.1 hereof is an unreasonable or otherwise
                    unenforceable restriction against Executive, the provisions
                    of Section 10.4.1 hereof shall not be rendered void but
                    shall be deemed amended to apply as to such maximum time and
                    territory and to such other extent as such court may
                    judicially determine or indicate to be reasonable.

            10.4.4  Change of Control. This Section 10.4 shall not apply if
                    there is a Change of Control.

      10.5 Suicide or Misstatement. If Executive commits suicide within two (2)
years after the date of this Agreement, or if the Insurer denies coverage for
material misstatements of fact made by Executive on any application for life
insurance purchased by Bank, or any other reason, provided however that Bank
shall evaluate the reason for the denial, and upon advice of Counsel and in its
sole discretion, consider judicially challenging any denial.

                                   Article 11
                                  Miscellaneous

      11.1 Binding Effect. This Agreement shall bind Executive and Bank and
their beneficiaries, survivors, executors, administrators and transferees, and
any Policy beneficiary.

      11.2 No Guarantee of Employment. This Agreement is not an employment
policy or contract and does not affect nor is affected by the Employment
Agreement executed by Executive and Bank on or about April 12, 2001 or any other
employment agreement that Executive and Bank have executed or may execute in the
future, except as specifically stated in this Agreement. It does not give
Executive the right to remain an employee of Bank, nor does it interfere with
Bank's right to discharge Executive. It also does not require Executive to
remain an employee nor interfere with Executive's right to terminate employment
at any time.

      11.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the Commonwealth of
Pennsylvania, except to the extent preempted by the laws of the United States of
America.

      11.4 Successors. Bank shall not merge or consolidate into or with another
company, or reorganize, or sell substantially all of its assets to another
company, firm or person unless such



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succeeding or continuing company, firm or person agrees to assume and discharge
the obligations of Bank.

      11.5 Notice. Any notice, consent or demand required or permitted to be
given under the provisions of this Supplemental Executive Retirement Plan
Agreement by one party to another shall be in writing, shall be signed by the
party giving or making the same, and may be given either by delivering the same
to such other party personally, or by mailing the same, by United States
certified mail, postage prepaid, to such party, addressed to his or her last
known address as shown on the records of Bank. The date of such mailing shall be
deemed the date of such mailed notice, consent or demand.

      11.6 Recovery of Estate Taxes. If Executive's gross estate for federal
estate tax purposes includes any amount determined by reference to and on
account of this Agreement, and if the beneficiary is other than Executive's
estate, then Executive's estate shall be entitled to recover from the
beneficiary receiving such benefit under the terms of the Agreement, an amount
by which the total estate tax due by Executive's estate, exceeds the total
estate tax which would have been payable if the value of such benefit had not
been included in Executive's gross estate. If there is more than one person
receiving such benefit, the right of recovery shall be against each such person.
In the event the beneficiary has a liability hereunder, the beneficiary may
petition Bank for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.

      11.7 Entire Agreement. This Agreement constitutes the entire agreement
between Bank and Executive as to the subject matter hereof. No rights are
granted to Executive by virtue of this Agreement other than those specifically
set forth herein.

      11.8 Administration. Bank shall have powers which are necessary to
administer this Agreement, including but not limited to:

            (a)   Interpreting the provisions of the Agreement;

            (b)   Establishing and revising the method of accounting for the
                  Agreement;

            (c)   Maintaining a record of benefit payments; and

            (d)   Establishing rules and prescribing any forms necessary or
                  desirable to administer the Agreement.

      11.9 Named Fiduciary. Bank shall be the named fiduciary and plan
administrator under the Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

      IN WITNESS WHEREOF, Executive and a duly authorized Bank officer have
signed this



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Agreement.

ATTEST:                               EAST PENN BANK ("BANK")

____________________________       By __________________________________________
Dale A. Dries, Secretary              Forrest A. Rohrbach, Chairman of the Board


WITNESS:

____________________________          __________________________________________
                                      Brent L. Peters ("Executive")
:130359



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                            SPLIT DOLLAR POLICY FOR

                SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

Policy No. _________________                            Insured: Brent L. Peters

Supplementing and amending the application for insurance to____________________
("Insurer") on _______________, the applicant requests and directs that:

                                 BENEFICIARIES

      1.    EAST PENN BANK, a Pennsylvania Banking institution located in
            Emmaus, Pennsylvania ("Bank") shall be the direct beneficiary of
            death proceeds of the Policy remaining after the Insured's interest
            is determined according to paragraph (2) below.

      2.    The Insured shall have the right to designate the beneficiary of
            Brent L. Peters the death proceeds in the amounts for representative
            years enumerated on Schedule 3.1.1 attached hereto and incorporated
            by reference.

                                    OWNERSHIP

      3.    The Owner of the policy shall be Bank. The Owner shall have all
            ownership rights in the Policy except as may be specifically granted
            to the Insured or the Insured's transferee in paragraph (4) of this
            endorsement.

      4.    The Insured or the Insured's transferee shall have the right to
            assign his or her rights and interests in the Policy with respect to
            that portion of the death proceeds designated in paragraph (2) of
            this endorsement, and to exercise all settlement options with
            respect to such death proceeds.

      5.    Notwithstanding the provisions of paragraph (4) above, the Insured
            or the Insured's transferee shall have no rights or interests in the
            Policy with respect to that portion of the death proceeds designated
            in paragraph (2) of this endorsement if the Insured does not comply
            with the General Limitations specified in Article 10 of East Penn
            Bank Supplemental Executive Retirement Plan Agreement for Brent L.
            Peters, unless agreed to in writing by Bank and the Insured.

               MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY

Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.

<PAGE>

                                OWNER'S AUTHORITY

The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer.

Any transferee's rights shall be subject to this Endorsement.

The Owner accepts and agrees to this split dollar endorsement.

Signed at __________________, Pennsylvania, this _______ day of _________, 2001.

EAST PENN BANK


___________________________________________
Forrest A. Rohrbach, Chairman of the Board

The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates _______________________________________ as
primary beneficiary and _____________________________________________________ as
secondary beneficiary of the portion of the proceeds described in (1) above.

Signed at __________________, Pennsylvania, this _______ day of _________, 2001.

THE INSURED:


___________________________________________
Brent L. Peters