Exhibit 10.3

                         EXECUTIVE EMPLOYMENT AGREEMENT
                         ------------------------------

     THIS AGREEMENT is made as of the 21st day of December, 2001, between
                                      ----        --------
Peoples Financial Corp., Inc.. (the "Corporation") and PFC (the
"Bank"), and R.B. Robertson (the "Executive").

     WHEREAS, the Bank is a subsidiary of the Corporation; and

     WHEREAS, any reference to "Corporation" shall mean Corporation or Bank;

     WHEREAS, the Corporation and Bank desire to employ the Executive as
President and Chief Executive Officer under the terms and conditions set forth
herein; and

     WHEREAS, the Executive desires to serve the Corporation and Bank in an
executive capacity under the terms and conditions set forth in this Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and intending to be legally bound hereby, the parties agree as
follows:

     1.   TERM OF EMPLOYMENT.
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          (a)  General. The Corporation and Bank hereby shall employ the
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               Executive and the Executive hereby accepts employment with the
               Corporation and Bank for a term of two (2) year(s) beginning on
               January 1, 2002, and ending two years later (the "Employment
               Period"), subject, however, to prior termination of this
               Agreement as set forth below.

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          (b)  At the end of the first Employment Period, this Agreement shall
               renew automatically and the Employment Period shall be modified
               to one year and extended for successive additional periods of one
               year each, unless the Executive or the Corporation and/or Bank,
               at least thirty (30) days before the expiration of first two year
               period or the expiration of any one year extension, pursuant to
               this Section 1(b) gives written notice to the other of intention
               not to renew this Agreement.

     2.   POSITION AND DUTIES. The Executive shall serve as the President and
          -------------------
          CEO of the Corporation and Bank, reporting only to the Board of
          Directors of the Corporation and Bank and shall have such other powers
          and duties as may from time to time be prescribed by the Board of
          Directors of the Corporation and Bank, provided that such duties are
          consistent with the Executive's position as President and CEO.

     3.   ENGAGEMENT IN OTHER EMPLOYMENT. The Executive will devote his full
          ------------------------------
          attention, time and energies to the business of Corporation, Bank and
          any of their subsidiaries or affiliates. The Executive shall neither
          engage in any business or commercial activities, duties or pursuits
          which compete with the business or commercial activities of the
          Corporation, Bank or any of their subsidiaries or affiliates, nor
          serve as a director or officer or in any other capacity in a company
          which competes with the Corporation, Bank or any of their subsidiaries
          or affiliates. The Corporation, the Executive may engage in voluntary
          or philanthropic endeavors.

     4.   COMPENSATION.
          ------------

          (a)  Annual Direct Salary. As compensation for services rendered the
               --------------------
               Corporation and Bank under this Agreement, the Executive shall be
               entitled to receive from the Corporation or Bank an annual direct
               salary of Two Hundred Thirty-Two Thousand, One Hundred
               Seventy-Five Dollars and Ninety-Seven Cents ($232,175.97) per
               year (the "Annual Direct Salary"), payable in substantially equal
               monthly installments (or such other intervals, consistent with
               the Bank's payroll policy), prorated for any partial

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               employment period. The Annual Direct Salary shall be reviewed
               annually, no later than December 31 of the then calendar year and
               shall be subject to such annual change (but not reduced below Two
               Hundred Thirty-Two Thousand One Hundred and Seventy-Five Dollars
               and Ninety-Seven Cents ($232,175.97) without the Executive's
               written consent, except in cases of national financial depression
               or emergency when compensation reduction has been implemented by
               the Board of Directors for the Bank's senior management) as may
               be set by the Board of Directors of the Corporation and Bank
               taking into account the position and duties of the Executive and
               the performance of the Corporation and Bank under the Executive's
               leadership.

          (b)  Bonus. The Board of Directors of the Corporation, in its sole
               -----
               discretion may provide for payment of a periodic bonus to the
               Executive in such an amount or nature as it may deem appropriate
               to provide incentive to the Executive and to reward the Executive
               for his performance. To assist the Board in evaluating the
               Executive's performance, for purposes of a bonus, the Board will,
               at its, discretion set target goals and objectives for the
               Executive at the beginning of each year.

     5.   FRINGE BENEFITS, VACATION, EXPENSES, AND PERQUISITES.
          ----------------------------------------------------

          (a)  Employee Benefit Plans. The Executive shall be entitled to
               ----------------------
               participate in or receive benefits under all Bank employment
               benefit plans including, but not limited to, any pension plan,
               profit-sharing plan, savings plan, life insurance plan or
               disability insurance plan as made available by the Bank to its
               employees, subject to and on a basis consistent with terms,
               conditions and overall administration of such plans and
               arrangements.

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          (b)  Vacation, Holidays, Sick Days and Personal Days. The Executive
               -----------------------------------------------
               shall be entitled to the number of paid vacation days in each
               calendar year determined by the Corporation and/or the Bank from
               time to time for its senior executive officers, but no less than
               three (3) weeks in any calender year. The Executive shall also be
               entitled to all paid holidays, sick days and personal days given
               by the Corporation and/or the Bank to its employees.

          (c)  Business Expenses. During the term of his employment hereunder,
               -----------------
               the Executive shall be entitled to receive prompt reimbursement
               for all reasonable expenses incurred by him, which are properly
               accounted for, in accordance with the policies and procedures
               established by the Board of Directors of the Corporation and/or
               the Bank for its senior executive officers.

          (d)  Special Disability Benefit. In addition to the Bank's regular
                -------------------------
               disability benefits available under the Bank's then existing
               short term and/or long term disability plans, in the event the
               Executive is fully or partially disabled, the Bank shall pay to
               the Executive, or upon his death, to his wife Joann Robertson, a
               gross monthly sum of $1,200.00 until the end of the applicable
               Employment Period as set forth in Section 1 of this Agreement.
               The terms "fully or partially disabled" shall have the meaning
               attributed to them in the current Bank group short term and/or
               long term disability program, or if said Bank group disability
               program is terminated, in the Bank's employment policies, as the
               same may be amended from time to time. In the event that
               Executive dies after becoming disabled, but prior to receiving
               all the monthly sums set forth above, Executive's wife shall
               receive any remaining payments due thereafter.

          (e)  Special Retirement Benefit. Commencing on the last day of
               --------------------------
               Executive's performance of any work or services for the Bank, the
               Bank shall pay the Executive or, upon his death, to his wife,
               Joann Robertson, until her death, a 100% Joint and Survivor
               Benefit consisting of a gross monthly sum of One Thousand Two
               Hundred dollars $1,200.00. In no event shall Executive or his

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               wife receive both the Special Disability Benefit and the Special
               Retirement Benefit; accordingly, if Executive becomes disabled
               and then retires, the Bank's obligations under the Special
               Disability Benefit provisions are released and the only Special
               Benefit obligations owed to Executive are those under this
               "Special Retirement Benefit" provision.

     6.   OFFICES. The Executive agrees to serve without additional compensation
          -------
          as a director on the Board of Directors of the Bank and Corporation
          and, if elected or appointed thereto, without additional compensation
          in one or more offices of the Bank and Corporation, and/or in one or
          more offices or as a director of any of the Bank and/or Corporation's
          non-banking subsidiaries; provided, however, the Executive shall not
          be required to serve in such additional offices or as a director of
          the Bank and/or Corporation or any subsidiary if such service would
          expose him to adverse financial consequences.

     7.   LIABILITY INSURANCE. The Bank and/or the Corporation shall use its
          -------------------
          best efforts to obtain insurance coverage for the Executive under an
          insurance policy covering officers and directors of the Bank and
          Corporation against lawsuits, arbitrations or other legal or
          regulatory proceedings; however, nothing herein shall be construed to
          require the Bank and/or the Corporation to obtain such insurance, if
          the Board of Directors of the Bank and/or the Corporation determine
          that such coverage cannot be obtained at a reasonable price.

     8.   UNAUTHORIZED DISCLOSURE. During the term of his employment hereunder,
          -----------------------
          or at any later time, the Executive shall not, without the written
          consent of the Board of Directors of the Corporation or Bank or a
          person authorized thereby, knowingly disclose to any person, other
          than an employee of the Corporation or Bank or a person to whom
          disclosure is reasonably necessary or appropriate in connection with
          the performance by the Executive of his duties as an executive of the
          Corporation or Bank, any confidential information, trade secrets, or
          know how, obtained by him while in the employ of the Corporation or
          Bank. Confidential information includes any services, products,
          improvements, formulas, projects, proposals, designs or styles,
          processes, customers,

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          (including, but not limited to, customers of Corporation, Bank or any
          of their affiliates or subsidiaries on whom the Executive called or
          with whom he became acquainted during the term of his employment),
          methods of business or any business practices, research, product or
          business plans, customer lists, markets, software, developments,
          inventions, technology, drawings, engineering, marketing, distribution
          and sales methods and systems, finances, sales and profit figures, and
          other business information of Corporation, Bank or any of their
          subsidiaries or affiliates, the disclosure of which could be or will
          be materially damaging to the Corporation, Bank or any of their
          subsidiaries or affiliates, provided, however, that confidential
          information shall not include any information known generally to the
          public (other than as a result of unauthorized disclosure by the
          Executive or any person with the assistance, consent or direction of
          the Executive) or any information of a type not otherwise considered
          confidential by persons engaged in the same business or a business
          similar to that conducted by the Corporation or Bank or any
          information that must be disclosed as required by law.

     9.   WORK MADE FOR HIRE. Any work performed by the Executive under this
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          Agreement should be considered a "Work Made for Hire" as that phrase
          is defined by the U.S. patent laws and shall be owned by and for the
          express benefit of Corporation, Bank and any of their subsidiaries and
          affiliates. In the event it should be established that such work does
          not qualify as a Work Made for Hire, the Executive agrees to and does
          hereby assign to Corporation, Bank and their affiliates and
          subsidiaries, all of his rights, title, and/or interest in such work
          product, including, but not limited to, all copyrights, patents,
          trademarks, and proprietary rights.

     10.  RETURN OF COMPANY PROPERTY AND DOCUMENTS. The Executive agrees that,
          ----------------------------------------
          at the time of termination of his employment, regardless of the reason
          for termination, he will deliver to Corporation or Bank, any and all
          company property, including, but not limited to, equipment, keys,
          security codes or passes, mobile telephones, pagers, computers,
          devices, confidential information (as defined in this Agreement),
          records, data, notes, reports, proposals, lists, correspondence,
          specifications, drawings, blueprints, sketches,

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          software programs, other documents or property, or reproductions of
          any of the aforementioned items developed or obtained by the Executive
          during the course of his employment. The Executive further agrees to
          sign and return the "Termination Certificate" attached hereto as
          Exhibit "A," together with all company property within three (3) days
          of the date of termination of the Executive's employment.

     11.  RESTRICTIVE COVENANT.
          --------------------

          (a)  Non-competition and Non-solicitation. The Executive hereby
               ------------------------------------
               acknowledges and recognizes the highly competitive nature of the
               business of Corporation and Bank and accordingly agrees that, for
               the applicable period set forth in Section 11(c) hereof,
               Executive shall not:

               (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 or
                     financial services industry (including a bank or thrift
                     holding company), or (2) any other activity in which
                     Corporation, Bank or any of their subsidiaries or
                     affiliates are engaged during the Employment Period, in any
                     county in which, at any time during the Employment Period
                     or on the date of termination of the Executive's
                     employment, a branch, office or other facility of
                     Corporation or any of its subsidiaries is located, or in
                     any county contiguous to such a county, including
                     contiguous counties located outside of the Commonwealth of
                     Pennsylvania (the "Non-Competition Area"); or

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

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               (iii) directly or indirectly contact, solicit or induce any
                     person, firm, corporation or other entity who or which is a
                     customer or referral source of Corporation, Bank or any of
                     their subsidiaries or affiliates during the term of
                     Executive's employment or at the date of termination of
                     Executive's employment, to become a client, customer or
                     referral service of any other person, firm, Corporation or
                     other entity; or

               (iv)  directly or indirectly solicit, induce or encourage any
                     employee of Corporation, Bank or any of their subsidiaries
                     or affiliates, who is employed during the term of
                     Executive's employment or at the date of termination of
                     Executive's employment, to leave the employ of Corporation,
                     Bank or any of their subsidiaries or affiliates or to seek,
                     obtain or accept employment with any person or entity other
                     than Corporation, Bank or any of their subsidiaries or
                     affiliates.

          (b)  Amendment of Restrictive Covenant. It is expressly understood and
               ---------------------------------
               agreed that, although Executive, Corporation and Bank consider
               the restrictions contained in Section 11(a) reasonable for the
               purpose of preserving for Corporation, Bank and any of their
               subsidiaries or affiliates, their 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 11(a) is an unreasonable or
               otherwise unenforceable restriction against the Executive, the
               provisions of Section 11(a) 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.

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          (c)  Period of Restrictive Covenant. The provisions of this Section 11
               ------------------------------
               shall be applicable, commencing on the date this Agreement is
               entered and ending two (2) years after the effective date of
               termination of employment.

          (d)  Breach of Restrictive Covenant. It is expressly understood and
               ------------------------------
               agreed that if the Executive violates or breaches any provisions
               of this Section 11, then the provisions of this Section 11 shall
               apply to the Executive for an additional one (1) year following
               the date of such violation or breach.

     12.  TERMINATION.
          -----------

          (a)  Death. With the exception of the benefits provided under the
               -----
               Special Disability Benefits and/or Special Retirement Benefits
               provided in Section 5(d) and (e), notwithstanding any other
               provisions of this Agreement, this Agreement shall terminate
               automatically upon the Executive's death and the Executive's
               rights under this Agreement shall cease as of the date such
               termination.

          (b)  Disability. Notwithstanding any other provisions of this
               ----------
               Agreement, if, as a result of physical or mental injury or
               impairment, Executive is unable to perform all of the essential
               job functions of his position on a full time basis, with or
               without a reasonable accommodation, and without posing a direct
               threat to himself and others, for a period of sixty-five (65)
               days, all obligations of Bank and Corporation to pay Executive an
               Annual Direct Salary as set forth in Section 4(a) of this
               Agreement are suspended. Any paid time off, sick leave, or short
               term disability pay Executive may be entitled to receive,
               pursuant to an established disability plan or program of the Bank

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               and/or Corporation shall be considered part of the compensation
               Executive shall receive while disabled and shall not be in
               addition to the compensation received by Executive under this
               provision of the Agreement. Executive agrees that should he
               remain unable to perform all of the essential functions of his
               position on a full time basis, with or without a reasonable
               accommodation and without posing a direct threat to himself or
               others, after sixty-five (65) days, the Bank and/or Corporation
               will suffer an undue hardship by continuing Executive in his
               position. Upon this event, all compensation and employment
               obligations of the Bank and Corporation under this Agreement
               shall cease (with the exception of Executive's rights under
               Section 5(d) of this Agreement and the Bank's then existing short
               term and/or long term disability plans, if any), and this
               Agreement shall terminate.

          (c)  Cause. Notwithstanding any other provisions of this Agreement,
               -----
               the Bank and/or Corporation may terminate the Executive's
               employment hereunder for "Cause."As used in this Agreement, the
               Bank and/or Corporation shall have "Cause" to terminate the
               Executive's employment hereunder upon: (i) the willful failure by
               the Executive to substantially perform his duties hereunder
               (other than a failure resulting from the Executive's incapacity
               because of physical or mental illness, as provided in Section
               12(b) hereof), after notice from the Corporation or Bank and a
               failure to cure such violation within fifteen (15) days of said
               notice ; (ii) the willful engaging by the Executive in misconduct
               injurious to the Corporation or Bank; (iii) the willful violation
               by the Executive of the provisions of Sections 3, 8, 9 or 10
               hereof, after notice from the Corporation or Bank and a failure
               to cure such violation within fifteen (15) days of said notice;
               (iv) the dishonesty or gross negligence of the Executive in the
               performance of his duties; (v) the breach of Executive's
               fiduciary duty involving personal profit; (vi) the 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; (vii) conduct on the part of

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               Executive which brings public discredit to the Corporation or
               Bank; (viii) unlawful discrimination by the Executive, including
               harassment against Corporation or Bank's employees, customers,
               business associates, contractors, or visitors; (ix) theft or
               abuse by Executive of the Corporation or Bank's property or the
               property of Corporation or Bank's customers, employees,
               contractors, vendors, or business associates; (x) failure of the
               Executive to follow the good faith lawful instructions of the
               Board of Directors of Corporation or Bank with respect to its
               operations, after notice from the Corporation or Bank and a
               failure to cure such violation within fifteen (15) days of said
               notice; (xi) the direction or recommendation of a state or
               federal bank regulatory authority to remove the Executive's
               position with Corporation and/or Bank as identified herein; (xii)
               any final removal or prohibition order to which the Executive is
               subject, by a federal or state banking agency pursuant to Section
               8(e) of the Federal Deposit Insurance Act or Section 2005 of the
               Pennsylvania Banking Code of 1965; (xiii) the Executive's
               conviction of or plea of guilty or nolo contendere to a felony,
               crime of falsehood or a crime involving moral turpitude, or the
               actual incarceration of Executive; (xiv) any act of fraud,
               misappropriation or personal dishonesty; (xv) insubordination;
               (xvi) misrepresentation of a material fact, or omission of
               information necessary to make the information supplied not
               materially misleading, in an application or other information
               provided by the Executive to the Corporation or any
               representative of the Corporation in connection with the
               Executive's employment with Corporation; (xvii) the existence of
               any material conflict between the interests of Corporation and
               the Executive that is not disclosed in writing by the Executive
               to the Corporation and approved in writing by the Board of
               Directors of Corporation; or (xviii) the Executive takes action
               that is clearly contrary to the best interest of the Corporation.

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          (d)  Termination by Executive. The Executive may terminate his
               ------------------------
               employment hereunder if (i) his health should become impaired to
               an extent that it makes continued performance of his duties
               hereunder hazardous to his physical or mental health or his life,
               or (ii) for Good Reason. The term "Good Reason" shall mean (1)
               any assignment to the Executive, without his consent, of any
               duties other than those contemplated by, or any limitation of the
               powers of the Executive not contemplated by Section 2 hereof; or
               (2) any removal of the Executive from any of the positions
               indicated in Section 2 hereof, except as a result of his
               regulatory removal and/or in connection with termination of the
               Executive's employment for Cause; or (3) failure of the Bank to
               comply with Section 2 hereof, all after notice from the Executive
               to the Corporation and Bank that such action or limitation of the
               Bank or Corporation constitutes Good Reason and the failure to
               cure such situation within thirty (30) days of said notice, or if
               said situation cannot be cured within thirty (30) days, within a
               reasonable time thereafter if a diligent effort is being made by
               the Corporation and/or the Bank to cure such situation.

     13.  PAYMENTS UPON TERMINATION ABSENT A CHANGE IN CONTROL.
          ----------------------------------------------------

          (a)  If the Executive's employment is terminated by the Executive
               because of his health as described in Section 12(d)(i) hereof, or
               if the Executive's employment is terminated by the Bank or
               Corporation because of Executive's death, disability or for Cause
               (as defined herein), the Corporation shall pay the Executive his
               full Annual Direct Salary through the date of termination at the
               rate in effect at the time of termination and the Corporation and
               Bank shall have no further obligation to the Executive under this
               Agreement except in the event the Executive is terminated because
               of his health described in Section 12(d)(i), Executive shall
               receive the Special Disability Benefit or the Special Retirement
               Benefit as the case may be.

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          (b)  If the Executive's employment is terminated by the Corporation or
               Bank other than pursuant to Sections 12(a) Death; 12(b)
               Disability; or 12(c) Cause hereof, then the Corporation shall pay
               the Executive a lump sum equal to his full Annual Direct Salary
               from the date of termination through the last day of the current
               Employment Period or an amount equal to his then Annual Direct
               Salary, whichever is less.

          (c)  If the Executive shall terminate his employment for Good Reason,
               pursuant to Section 12(d)(ii)(1), (2), or (3), then the
               Corporation shall continue to pay the Executive on a periodic
               basis, amounts which total his full Annual Direct Salary from the
               date of termination through the last day of the current
               Employment Period.

     14.  PAYMENTS UPON TERMINATION FOLLOWING A CHANGE IN CONTROL.
          --------------------------------------------------------

          (a)  If a Change in Control (as defined herein) shall occur, then at
               the option of Executive, exercisable by Executive within thirty
               (30) days of the Change of Control, Executive may resign from
               employment with Corporation and Bank (or, if involuntarily
               terminated, give notice of intention to collect benefits under
               this Agreement) by delivering a notice in writing (the "Notice of
               Termination") to Corporation and Bank and the provisions of
               Section 14 (c) of this Agreement shall apply.

          (b)  During the period of time between the execution of an agreement
               to effect a Change in Control (as defined herein) and the Date of
               the Change in Control (as defined herein), Executive's employment
               may only be terminated by the Corporation or Bank for Death,
               Disability, or Cause (as defined herein). If, during that period
               of time, Executive's employment is terminated by the Corporation
               or Bank for Death, Disability or for Cause (as defined herein),
               then all rights of Executive, other than those specifically
               preserved in Section 5(d) and (e) under this Agreement shall
               cease as of the effective date of such termination. If, during
               that period Executive's employment is terminated by the
               Corporation or Bank other than for Death, Disability or

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               Cause (as defined herein), then Executive may give notice of
               intention to collect benefits under this Agreement by delivering
               a notice in writing ("Notice of Termination") to Corporation and
               Bank and the provisions of Section 14(c) of this Agreement shall
               apply.

          (c)  In the event that Executive delivers a Notice of Termination (as
               defined in Section 14(a) of this Agreement) to Corporation and
               Bank, following the Change in Control, Executive shall be
               entitled to receive the compensation and benefits set forth
               below:

               Corporation shall pay Executive a lump sum amount equal to and no
               greater than two (2.0) times the Executive's Annual Direct Salary
               as defined in Section 4(a), minus applicable taxes and
               withholdings. In addition, for a period of two (2) years from the
               date of termination of employment, or until Executive secures
               substantially similar benefits through other employment,
               whichever shall first occur, Executive shall receive a
               continuation of any group health care, life and disability
               insurance in effect with respect to Executive during the year
               prior to his termination of employment. If Executive is not
               permitted continued participation after termination, pursuant to
               the terms or conditions of the plans or contracts, Corporation
               shall pay to Executive, a dollar amount equal to the cost to
               Executive of obtaining such benefits (or substantially similar
               benefits). However, in the event the payment described herein,
               when added to all other amounts or benefits provided to or on
               behalf of the 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. Upon written notice to Executive, together with
               calculations of Corporation's independent auditors, Executive
               shall remit to Corporation 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.

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     15.  DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement, the
          -------------------------------
          term "Change in Control" shall mean: A change in control (other than
          one occurring by reason of an acquisition of the Corporation or Bank
          by Executive) of a nature that would be required to be reported in
          response to Item 6(e) of Schedule 14A of Regulation 14A and any
          successor rule or regulation promulgated under the Securities Exchange
          Act of 1934 (the "Exchange Act") if Corporation or Bank were subject
          to the Exchange Act reporting requirements; provided that, without
          limiting the foregoing, such a change in control shall be deemed to
          have occurred if:

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

          (b)  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
               the Corporation or 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;

          (c)  a merger, consolidation or business combination with the
               Corporation and/or Bank occurs.

     16.  DEFINITION OF DATE OF CHANGE IN CONTROL. For purposes of this
          ---------------------------------------
          Agreement, the Date of Change in Control shall mean:

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          (a)  the first date on which a single person and/or entity, or group
               of affiliated persons and/or entities, acquire the beneficial
               ownership of twenty-five percent (25%) or more of the
               Corporation's voting securities, or

          (b)  the date of the closing of an Agreement, transferring all or
               substantially all of the Bank or Corporation's assets, or

          (c)  the date on which a merger, consolidation or business combination
               is consummated, as applicable, or

          (d)  the date on which individuals who formerly constituted a majority
               of the Board of Directors of the Bank or Corporation under
               Section 16(b) hereof, ceased to be a majority.

     17.  DAMAGES FOR BREACH OF CONTRACT. In the event of a breach of this
          ------------------------------
          Agreement by either the Corporation, Bank or the Executive resulting
          in damages to another party to this Agreement, that party may recover
          from the party breaching the Agreement, only those damages as set
          forth herein. In no event shall any party be entitled to the recovery
          of attorney's fees or costs.

     18.  ARBITRATION. Corporation, Bank and Executive recognize that in the
          -----------
          event a dispute should arise between them concerning the
          interpretation or implementation of this Agreement, lengthy and
          expensive litigation will not afford a practical resolution of the
          issues within a reasonable period of time. Consequently, with the
          exception of the Restrictive Covenant provisions in Section 11, which
          the Corporation or Bank may seek to enforce in any court of competent
          jurisdiction, each party agrees that all disputes, disagreements and
          questions of interpretation concerning this Agreement are to be
          submitted for resolution, in Harrisburg, Pennsylvania, to the American
          Arbitration Association (the "Association") in accordance with the
          Association's National Rules for the Resolution of Employment Disputes
          or other applicable rules

                                       16

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          then in effect ("Rules"). Corporation, Bank or Executive may initiate
          an arbitration proceeding at any time by giving notice to the other in
          accordance with the Rules. Corporation, Bank and Executive may, as a
          matter or right, mutually agree on the appointment of a particular
          arbitrator from the Association's pool. The arbitrator shall not be
          bound by the rules of evidence and procedure of the courts of the
          Commonwealth of Pennsylvania but shall be bound by the substantive law
          applicable to this Agreement. The arbitration proceeding and all
          filing, testimony, documents, and information, relating to or
          presented during the evaluation proceeding, shall be disclosed
          exclusively for the purpose of facilitating the arbitration process
          and for no other purpose and shall be deemed to be information subject
          to the confidentiality provisions of this Agreement. The decision of
          the arbitrator, absent fraud, duress, incompetence or gross and
          obvious error of fact, shall be final and binding upon the parties and
          shall be enforceable in courts of proper jurisdiction. Following
          written notice of a request for arbitration, Corporation, Bank and
          Executive shall be entitled to an injunction restraining all further
          proceedings in any pending or subsequently filed litigation concerning
          this Agreement, except as otherwise provided herein.

     19.  NOTICE. For the purposes of this Agreement, notices and all other
          ------
          communications provided for in the Agreement shall be in writing and
          shall be deemed to have been duly given when hand-delivered or mailed
          by United States certified mail, return receipt requested, postage
          prepaid, addressed as follows:


          If to the Executive:     R.B. Robertson
                                   P.O. Box 190
                                   New Bethlehem, PA 16242


          If to the Bank:          Frank T. Baker
                                   Chairman of the Board
                                   PFC Bank
                                   P.O. Box 311
                                   Ford City, PA 16226

                                       17

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          If to the Corporation:   Frank T. Baker
                                   Chairman of the Board
                                   Peoples Financial Corporation
                                   P.O. Box 311
                                   Ford City, PA 16226

          or to such other address as any party may have furnished to the other
          in writing in accordance herewith, except that notices of change of
          address shall be effective only upon receipt.

     20.  SUCCESSORS. This Agreement shall inure to the benefit of and be
          ----------
          binding upon the Executive, his personal representatives,
          heirs or assigns and to the Bank and/or the Corporation and any of
          their successors or assigns.

     21.  SEVERABILITY. If any provision of this Agreement is declared
          ------------
          unenforceable for any reason, the remaining provisions of
          this Agreement shall be unaffected thereby and shall remain in full
          force and effect.

     22.  AMENDMENT. This Agreement may be amended or canceled only by mutual
          ---------
          agreement of the parties in writing.

     23.  PAYMENT OF MONEY DUE DECEASED EXECUTIVE. In the event of Executive's
          ---------------------------------------
          death, any monies that may be due him from the Corporation or Bank
          under this Agreement as of the date of death, shall be paid to the
          person designated by him in writing for this purpose, or in the
          absence of any such designation, to his spouse or estate.

     24.  LAW GOVERNING. This Agreement shall be governed by and construed in
          -------------
          accordance with the laws of the Commonwealth of Pennsylvania.

     25.  ENTIRE AGREEMENT. This Agreement supersedes any and all agreements,
          ----------------
          either oral or in writing, between the parties with respect to the
          employment of the Executive by the Corporation and Bank, and this
          Agreement contains all the covenants and agreements between the
          parties with respect to the subject matter of this Agreement.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Agreement to be duly executed in their respective names and, in
the case of the Corporation and Bank, by its authorized representatives the day
and year above mentioned.

                                       18

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 ATTEST:                                 PEOPLES FINANCIAL CORP., INC.


 S/Timothy P. Reddinger                  By: S/Frank T. Baker
 --------------------------------            --------------------------------
 Timothy P. Reddinger                        Frank T. Baker
 Secretary                                   Chairman



 ATTEST:                                 PFC BANK, INC.


 S/Timothy P. Reddinger                  By: S/Frank T. Baker
 --------------------------------            --------------------------------
 Timothy P. Reddinger                        Frank T. Baker
 Secretary                                   Chairman



 WITNESS:


 S/James L. Kifer                            S/R. B. Robertson
 --------------------------------            --------------------------------
                                             R.B. Robertson
                                             "Executive":


                                    EXHIBIT A

                             TERMINATION CERTIFICATE


     This is to certify that I do not have in my possession, nor have I failed
to return, any equipment, keys, security codes or passes, mobile telephones,
pagers, computers, devices, confidential information, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints,
or reproductions of any aforementioned items belonging to Peoples Financial
Corp., Inc., PFC Bank or any of their affiliates or subsidiaries, or any of
their respective successors or assigns (together, the "Company").

     I further certify that I have complied and will continue to comply with all
the terms of the Executive Employment Agreement entered by me, which took effect
on January 1, 2002.

     Without limiting the generality of the preceding paragraph, I will, in
accordance with my Employment Agreement, preserve as confidential, all
proprietary and confidential information, trade secrets and know-how of Peoples
Financial Corp., Inc., PFC Bank or any of their affiliates or subsidiaries,
including, but not limited to, research, product or business plans, products,
services,

                                       19


<PAGE>

projects, proposals, customer lists or customers (including, but not limited to,
customers of Peoples Financial Corp., Inc., PFC Bank or any of their affiliates
or subsidiaries on whom I called or with whom I became acquainted during the
term of my employment), markets, software, developments, inventions, processes,
formulas, technology, designs or styles, drawings, engineering, marketing,
distribution, and sales methods and systems, sales and profit figures, finances
and other business information disclosed to me by Peoples Financial corp., Inc.,
The PFC Bank or any of their affiliates or subsidiaries, either directly or
indirectly in writing, orally or by drawings or inspection of documents or on
other tangible property.


Date:
     ------------------------------        ------------------------------------
                                            Signature



-----------------------------------        ------------------------------------
Witness                                    R.B. Robertson

                                       20

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