GENERAL RELEASE


         NOTICE to David P. Fennell (hereinafter "the undersigned"), if you sign
this Release, you will be giving up all rights you may have to sue (and to
institute other legal proceedings against) and to recover damages from PFC BANK
and PFC Financial Corporation (hereinafter "PFC") and/or any persons affiliated
with PFC on account of any act or omission alleged to have occurred prior to the
date this Release is signed and becomes effective.

         You are, therefore, advised to review this Release carefully and to
consult with an attorney of your choice before signing this Release. You have
twenty one (21) days after the date you receive this to decide whether or not to
sign it. If you decide to sign this, you can change your mind and revoke the
Release at any time within seven (7) days after the date you sign this Release.
To revoke your signature on this, you must give written notice of revocation to
PFC BANK. Notice is not deemed to be given until received by PFC BANK.


                                     RELEASE

                                       I.

         FOR AND IN CONSIDERATION of the execution of this Release by the
undersigned, PFC agrees to provide the following:

         1. continued health care coverage and other insurance benefits under
         the terms of the current contract until June 1, 1998;

         2. salary continuation under the terms of the current employment
         contract;

         3. a non-qualified pension benefit in the amount of the computed
         difference between the amount of pension benefit that the undersigned
         would have received had he continued to be employed at age fifty-five
         (55) and the amount of pension benefit that he will be eligible to
         receive upon election of this early retirement benefit as set forth in
         the following chart:

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              QUALIFIED        NONQUALIFIED            TOTAL
               1,341.19        $   1,658.93        $   3,000.12
               1,471.41        $   1,559.75        $   3,031.16
               1,615.41        $   1,449.97        $   3,065.38
               1,774.94        $   1,328.35        $   3,103.29
               1,951.81        $   1,193.52        $   3,145.33
               2,148.23        $   1,043.78        $   3,192.01
               3,517.43        $       0.00        $   3,517.43

         4. compensation in the amount of the undersigned's individual COBRA
         premiums for a period of eighteen months from June 1, 1998, or until
         the termination of his COBRA rights under the law, whichever occurs
         first.

Payment of the benefits cited above, to the undersigned, shall begin within a
reasonable time following written notice from the undersigned to PFC stating
affirmatively that he has not exercised his right to revoke this Release as
provided for in Paragraph IV. hereof. Such written notice shall be sent to:

                               Mr. R.B. Robertson
                                    Director
                                    PFC BANK
                          Ford Street and Fourth Avenue
                                  P.O. Box 311
                            Ford City, PA 16226-0311

         Such notice shall not be sent until the seven (7) day period for
revocation specified in Paragraph IV. hereof has expired.

                                       II.

         FOR AND IN CONSIDERATION of the agreements and commitments set forth in
Paragraph I. hereinabove, (and with the specific exceptions referred to in
Paragraph III. hereof relating to profit sharing or other retirement benefits
and benefits under COBRA) the undersigned does hereby knowingly and voluntarily
release and forever discharge, both jointly and severally, PFC and all of its
subsidiaries, divisions, affiliates, whether or not the existence of such
entities is now known to the undersigned, and their officers, directors,
employees, shareholders, servants, agents and attorneys, in their official and
individual capacities, together with their predecessors, successors and/or
assigns from any and all actions, causes of action, suits, debts, dues, sums of

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money, accounts, damages, judgments, claims and/or demands whatsoever, in law or
in equity, (hereinafter collectively referred to as "claims"), whether known or
unknown to the undersigned, which the undersigned ever had, now has or may or
might in the future have against PFC based on any acts, omissions, transactions
or occurrences whatsoever occurring prior to or on the date of execution of this
Release (hereinafter referred to as "Release"), and specifically, but not by way
of limitation, from those claims which are, or arise by reason of or are in any
way connected with or which are or may be based in whole or in part on, or do or
may arise out of, or are or may be related to or with (I) the employment
relationship which existed between the undersigned and PFC and subsequent
termination thereof; (ii) those claims arising under any state fair employment
practices act and/or any law, ordinance or regulation promulgated by any county,
municipality or other state subdivision; (iii) those claims for breach of duty
and/or implied covenant of good faith and fair dealing; (iv) those claims for
interference with and/or breach of contract (express or implied, in fact or in
law, oral or written); (v) those claims for retaliatory or wrongful discharge of
any kind; (vi) those claims for intentional or negligent infliction of emotional
distress or mental anguish; (vii) those claims for outrageous conduct; (viii)
those claims for interference with business relationships, contractual
relationships or employment relationships of any kind; (ix) those claims for
breach of duty, fraud, fraudulent inducement to contract, breach of right of
privacy, libel, slander, or tortious conduct of any kind; (x) those claims
arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. ss. 2000e, et
seq.; (xi) those claims arising under the Age Discrimination in Employment Act,
29 U.S.C. ss. 621 et seq.; (xii) those claims arising under the National Labor
Relations Act, 29 U.S.C. ss. 151 et seq.; (xiii) those claims arising under the
Americans with Disabilities Act, 42 U.S.C. ss. 12101 et seq.; (xiv) those claims
arising under the Civil Rights Act of 1866 or 1871, 42 U.S.C. ss. 1981 et seq.;
(xv) those claims arising under any state or federal handicap or disability
discrimination law or act; (xvi) those claims arising from any damages suffered
at any time after the date of this Release by reason of the effects or continued
effects of any alleged or actual discriminatory or wrongful acts which occurred
on or before the date of the execution of this Release; (xvii) those claims
arising under or in reliance upon any statute, regulation, rule or ordinance
(local, state or federal); (xviii) any and all other claims arising under the
law or in equity; and (xix) any and all other claims asserted or which could
have been asserted by the undersigned in any other charges or claims of alleged
violation of any applicable law, rule, ordinance or regulation.

                                      III.

         Without limiting the generality of the foregoing, the undersigned
acknowledges and covenants that, in consideration for the agreements and
commitments set forth in Paragraph I. hereof, the undersigned has knowingly and
voluntarily relinquished, waived and forever released any and all remedies which
might otherwise be available to him including, without limitation, claims for
contract or tort damages, punitive or exemplary damages, special damages,
compensatory damages, consequential damages, lost benefits of any kind
including, without limitation, life insurance, sick pay, severance pay or
medical benefits, recovery of attorneys' fees, costs, expenses of any kind,
reinstatement to a position of employment or reemployment with PFC. [It is
understood and agreed that the waiver of benefits contained in the preceding
sentence does not include the waiver of any vested, nonforfeitable pension,
profit sharing or other

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retirement benefits to which the undersigned is entitled through an existing or
prior retirement or profit sharing program, nor does that waiver include
benefits to which the undersigned is entitled under COBRA.] The undersigned
further covenants not to sue PFC or to participate in any way in any suit or
proceeding or to execute, seek to impose, collect or recover upon or otherwise
enforce or accept any judgment, decision, award, warranty or attainment upon any
claim released herein.

                                       IV.

         The undersigned agrees and covenants that he has carefully reviewed,
studied and thought over the terms of this Release and that all questions
concerning this Release have been answered to his satisfaction. The undersigned
acknowledges that he is hereby advised and encouraged to consult with his
private attorney prior to executing this Release. The undersigned further agrees
and covenants that prior to execution of this Release, he was encouraged and
afforded the opportunity to review it with anyone else he desired to consult
including his accountant or tax advisor, and that, to the extent desired, he has
availed himself of that opportunity. The undersigned does further acknowledge
and agree that he was given a period of at least twenty one (21) days within
which to consider this Release, that he has had this Release in his possession
for a reasonable amount of time, and that he has had the opportunity to consider
and reflect upon the terms of this Release before signing or executing it. The
undersigned does further acknowledge and agree that he knowingly and voluntarily
entered into and executed this Release after deliberate consideration and that
he was not coerced, pressured or forced in any way by PFC or anyone else to
accept the terms of this Release, and that the decision to accept the terms of
this Release was entirely his own after full consultation with his attorney. The
undersigned also acknowledges and agrees that he fully understands that he may
be giving up certain legal rights by entering into this Release and that he
shall have no right to reinstatement or reemployment with PFC following his
execution of this Release based upon any claim(s) released herein. The
undersigned also acknowledges that no promise or inducement to enter into and
execute this Release has been offered or made except as herein set forth. The
undersigned also acknowledges that he understands that he has seven (7) days to
revoke this Release following its execution by mailing written notice or
revocation within that seven (7) day period to:

                               Mr. R.B. Robertson
                                    Director
                                    PFC BANK
                          Ford Street and Fourth Avenue
                                  P.O. Box 311
                            Ford City, PA 16226-0311

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                                       V.

         The undersigned acknowledges and agrees that, should he fail or refuse
to execute this Release, or should he revoke this Release as provided in
Paragraph IV. above, all obligations of PFC, including the obligation to provide
payments to the undersigned as set forth herein shall be entirely null, void and
of no effect.

                                       VI.

         Notwithstanding any other provisions of this Release, no term or
provision of this Release is to be interpreted as waiving or releasing any
prospective claims based upon acts, omissions or events occurring after its
execution.

                                      VII.

         This Release shall be binding upon the undersigned and his heirs,
executors, administrators, assigns, successors, beneficiaries, employees and
agents, and all other persons asserting claims by, on behalf of, or through the
undersigned based or founded upon any of the claims released herein. All terms
of this Release shall inure to the benefit of PFC and its predecessors,
successors and assigns.

                                      VIII.

         It is understood and agreed that the provisions of this Release are
severable, and should any provision or provisions hereof be found unenforceable,
the other provisions shall remain fully valid and enforceable.

                                       IX.

         The undersigned covenants and agrees not to disclose any of the
consideration provided to him pursuant to this Release to any person other than
his attorney or tax advisor without the prior written consent of PFC. The
undersigned covenants and agrees that should he disclose the terms of this
Release to his attorney or his tax advisor, he shall obtain from each such
person an agreement to not disclose the consideration provided according to this
Release.

                                       X.

         This Release constitutes the entire agreement between the undersigned
and PFC pertaining to the subjects contained in them and supersedes any and all
prior and/or contemporaneous agreements, representations, or understandings,
written or oral. It is expressly understood and agreed that this Release may not
be altered, amended, modified or otherwise changed in any respect or particular
whatsoever except in writing duly executed by the undersigned and an authorized
representative of PFC. The pronouns "he," "his," and "him" used in this Release
are intended to refer to the undersigned regardless of the undersigned's gender.
This Release is

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intended to fully, completely and forever resolve all disputes based upon
events, omissions or acts occurring on or prior to its execution as well as all
other issues or claims in any way arising out of or connected with the prior
employment of the undersigned with PFC and/or its predecessors or the
termination of that employment.

         IN WITNESS WHEREOF, the undersigned has executed this Release on the
date set forth below.

WITNESS:

---------------------------------           ------------------------------------
                                                    David P. Fennell

                                            ------------------------------------
                                                          Date

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