Exhibit 10.12

                           AGREEMENT

     AGREEMENT, dated this 1st day of December 2004, between
First Keystone Bank (the "Savings Bank"), a federally chartered
savings bank, and Donald S. Guthrie (the "Executive").

                           WITNESSETH

     WHEREAS, the Executive is presently an officer of First
Keystone Financial, Inc. (the Corporation) and the Savings Bank
(together, the Employers);

     WHEREAS, the Employers desire to be ensured of the
Executive's continued active participation in the business of the
Employers;

     WHEREAS, the Employers currently have an agreement with the
Executive dated May 26, 1999, which is being amended and
superseded by this Agreement to reflect certain mutually agreed
upon revisions, and in accordance with the provisions of Section
310 of the Thrift Activities Handbook ("Handbook") of the Office
of Thrift Supervision ("OTS"), the Corporation and the Savings
Bank desire to enter into separate agreements with the Executive
with respect to his employment by each of the Employers; and

     WHEREAS, in order to induce the Executive to remain in the
employ of the Employers and in consideration of the Executive's
agreeing to remain in the employ of the Employers, the parties
desire to modify the severance benefits which shall be due the
Executive by the Savings Bank in the event that his employment
with the Savings Bank is terminated under specified
circumstances.

     NOW THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereby agree as
follows:

     1.   Definitions.  The following words and terms shall have
the meanings set forth below for the purposes of this Agreement:

     (a)  Average Annual Compensation.  The Executive's "Average
Annual Compensation" for purposes of this Agreement shall be
deemed to mean the average level of compensation paid to the
Executive by the Employers or any subsidiary thereof during the
most recent five taxable years preceding the Date of Termination,
including Base Salary and benefits and bonuses under any employee
benefit plans of the Employers.

     (b)  Base Salary.  "Base Salary" shall have the meaning set
forth in Section 3(a) hereof.

     (c)  Cause. Termination of the Executive's employment for
"Cause" shall mean termination because of personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or final cease-and-
desist order or material breach of any provision of this
Agreement.

(d)  Change in Control of the Corporation.  The term Change in
Control of the Corporation shall mean the occurrence of any of
the following events:

          (i) approval by the stockholders of the Corporation of
     a transaction that would result and does result in the
     reorganization, merger or consolidation of the Corporation,
     with one or more other persons, other than a transaction
     following which:

               (A) at least 51% of the equity ownership interests
     of the entity resulting from such transaction are
     beneficially owned (within the meaning of Rule 13d-3
     promulgated under the Securities Exchange Act of 1934, as
     amended ("Exchange Act")) in substantially the same relative
     proportions by persons who, immediately prior to such
     transaction, beneficially owned (within the meaning of Rule
     13d-3 promulgated under the Exchange Act) at least 51% of
     the outstanding equity ownership interests in the
     Corporation; and

               (B) at least 51% of the securities entitled to
     vote generally in the election of directors of the entity
     resulting from such transaction are beneficially owned
     (within the meaning of Rule 13d-3 promulgated under the
     Exchange Act) in substantially the same relative proportions
     by persons who, immediately prior to such transaction,
     beneficially owned (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) at least 51% of the
     securities entitled to vote generally in the election of
     directors of the Corporation;

          (ii) the acquisition of all or substantially all of the
     assets of the Corporation or beneficial ownership (within
     the meaning of Rule 13d-3 promulgated under the Exchange
     Act) of 20% or more of the outstanding securities of the
     Corporation entitled to vote generally in the election of
     directors by any person or by any persons acting in concert,
     or approval by the stockholders of the Corporation of any
     transaction which would result in such an acquisition;

          (iii) a complete liquidation or dissolution of the
     Corporation or the Savings Bank, or approval by the
     stockholders of the Corporation of a plan for such
     liquidation or dissolution;

          (iv) the occurrence of any event if, immediately
     following such event, members of the Corporation Board of
     Directors who belong to any of the following groups do not
     aggregate at least a majority of the Corporation Board of
     Directors:

               (A) individuals who were members of the
     Corporation Board of Directors on the Effective Date of this
     Agreement; or

               (B) individuals who first became members of the
     Corporation Board of Directors after the Effective Date of
     this Agreement either:

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                    (1) upon election to serve as a member of the
     Corporation Board of Directors by the affirmative vote of
     two-thirds of the members of such Board, or of a nominating
     committee thereof, in office at the time of such first
     election; or

                    (2) upon election by the stockholders of the
     Corporation Board of Directors to serve as a member of the
     Corporation Board of Directors, but only if nominated for
     election by the affirmative vote of two-thirds of the
     members of such Board, or of a nominating committee thereof,
     in office at the time of such first nomination;

     provided that such individual's election or nomination did
     not result from an actual or threatened election contest or
     other actual or threatened solicitation of proxies or
     consents other than by or on behalf of the Corporation Board
     of Directors; or

          (v) any event which would be described in Section
     1(d)(i), (ii), (iii) or (iv) if the term "Savings Bank" were
     substituted for the term "Corporation" therein and the term
     "Bank Board of Directors" were substituted for the term
     "Corporation Board of Directors" therein.

In no event, however, shall a Change in Control of the
Corporation be deemed to have occurred as a result of any
acquisition of securities or assets of the Corporation, the
Savings Bank, or a subsidiary of either of them, by the
Corporation, the Savings Bank, or any subsidiary of either of
them, or by any employee benefit plan maintained by any of them.
For purposes of this Section 1(d), the term "person" shall
include the meaning assigned to it under Sections 13(d)(3) or
14(d)(2) of the Exchange Act.

     (e)  Code.  "Code" shall mean the Internal Revenue Code of
1986, as amended.

     (f)  Date of Termination.  "Date of Termination" shall mean
(i) if the Executive's employment is terminated for Cause or for
Disability, the date specified in the Notice of Termination, and
(ii) if the Executive's employment is terminated for any other
reason, the date on which a Notice of Termination is given or as
specified in such Notice.

     (g)  Disability.  Termination by the Savings Bank of the
Executive's employment based on "Disability" shall mean
termination because of any physical or mental impairment which
qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers
or any subsidiary or, if no such plan applies, which would
qualify the Executive for disability benefits under the Federal
Social Security System.

     (h)  Good Reason.  Termination by the Executive of the
Executive's employment for "Good Reason" shall mean termination
by the Executive following a Change in Control of the Corporation
based on:

          (i)  Without the Executive's express written consent, a
               reduction by the Employers in the Executive's Base
               Salary as the same may be increased from time to
               time or, except to the extent permitted by Section
               3(b) hereof, a
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               reduction in the package of fringe benefits provided
               to the Executive, taken as a whole;

          (ii) The principal executive office of the Employers is
               relocated outside of the Media, Pennsylvania, area
               or, without the Executive's express written
               consent, the Employers require the Executive to be
               based anywhere other than an area in which the
               Employers' principal executive office is located,
               except for required travel on business of the
               Employers to an extent substantially consistent
               with the Executive's present business travel
               obligations;

          (iii)Any purported termination of the Executive's
               employment for Cause, Disability or Retirement
               which is not effected pursuant to a Notice of
               Termination satisfying the requirements of
               paragraph (j) below; or

          (iv) The failure by the Savings Bank to obtain the
               assumption of and agreement to perform this
               Agreement by any successor as contemplated in
               Section 9 hereof.

     (i)  IRS.  IRS shall mean the Internal Revenue Service.

     (j)  Notice of Termination.  Any purported termination of
the Executive's employment by the Savings Bank for any reason,
including without limitation for Cause, Disability or Retirement,
or by the Executive for any reason, including without limitation
for Good Reason, shall be communicated by written "Notice of
Termination" to the other party hereto.  For purposes of this
Agreement, a "Notice of Termination" shall mean a dated notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after
such Notice of Termination is given, except in the case of the
Savings Bank's termination of Executive's employment for Cause;
and (iv) is given in the manner specified in Section 10 hereof.

     (k)  Retirement.  Termination by the Savings Bank of the
Executive's employment based on "Retirement" shall mean voluntary
termination by the Executive in accordance with the Employers'
retirement policies, including early retirement, generally
applicable to their salaried employees.

     2.   Term of Employment.

     (a)  The Savings Bank hereby employs the Executive as
President and Chief Executive Officer of the Savings Bank and
Executive hereby accepts said employment and agrees to render
such services to the Savings Bank on the terms and conditions set
forth in this Agreement.  The term of employment under this
Agreement shall be for three years, commencing on the date of
this
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Agreement and, subject to the requirements of the succeeding
sentence, shall be deemed automatically, without further action,
to extend for an additional year on each annual anniversary of
the date of this Agreement.  Prior to the anniversary of the date
of this Agreement and each annual anniversary thereafter, the
Board of Directors of the Savings Bank shall consider and review
(with appropriate corporate documentation thereof, and after
taking into account all relevant factors, including the
Executive's performance hereunder) extension of the term under
this Agreement, and the term shall continue to extend in the
manner set forth above unless either the Board of Directors does
not approve such extension and provides written notice to the
Executive of such event or the Executive gives written notice to
the Savings Bank of the Executive's election not to extend the
term, in each case with such written notice to be given not less
than thirty (30) days prior to any such anniversary date.
References herein to the term of this Agreement shall refer both
to the initial term and successive terms.

     (b)  During the term of this Agreement, the Executive shall
perform such executive services for the Savings Bank as may be
consistent with his titles and from time to time assigned to him
by the Savings Bank's Board of Directors.

     3.   Compensation and Benefits.

     (a)  The Employers shall compensate and pay Executive for
his services during the term of this Agreement at a minimum base
salary of $286,900 per year ("Base Salary"), which may be
increased from time to time in such amounts as may be determined
by the Boards of Directors of the Employers and may not be
decreased without the Executive's express written consent.  In
addition to his Base Salary, the Executive shall be entitled to
receive during the term of this Agreement such bonus payments as
may be determined by the Boards of Directors of the Employers.

     (b)  During the term of the Agreement, Executive shall be
entitled to participate in and receive the benefits of any
pension or other retirement benefit plan, profit sharing, stock
option, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Employers, to
the extent commensurate with his then duties and
responsibilities, as fixed by the Boards of Directors of the
Employers.  The Savings Bank shall not make any changes in such
plans, benefits or privileges which would adversely affect
Executive's rights or benefits thereunder, unless such change
occurs pursuant to a program applicable to all executive officers
of the Savings Bank and does not result in a proportionately
greater adverse change in the rights of or benefits to Executive
as compared with any other executive officer of the Savings Bank.
Nothing paid to Executive under any plan or arrangement presently
in effect or made available in the future shall be deemed to be
in lieu of the salary payable to Executive pursuant to Section
3(a) hereof.

     (c)  During the term of this Agreement, the Executive shall
be entitled to not less than  six weeks paid annual vacation.
The Executive shall be entitled to receive any additional
compensation from the Employers for failure to take a vacation
and shall be able to accumulate unused vacation time from one
year to the next.

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     (d)  During the term of this Agreement, including any
renewal thereof, the Employers shall provide the Executive with a
full-sized, four-door automobile for the Executive's use, which
automobile shall be replaced during the term hereof and any
renewal thereof no less frequently than every three years.

     (e)  The Employers shall provide medical insurance for the
benefit of the Executive and his spouse until the Executive shall
have attained the age of 72; furthermore, in the event of the
death of the Executive prior to attaining age 72, the Employers
shall provide the Executive's spouse with said medical insurance
until such spouse is eligible for state or federal government
subsidized medical benefits, but in no event shall such spouse be
entitled to said medical insurance after attaining age 72.

     (f)  The Employers shall pay for or reimburse Executive with
respect to expenses incurred thereby in obtaining dental care for
Executive and his spouse up to a maximum of $2,500 per person per
year, which amount may be increased from time to time as may be
determined by the Boards of Directors of the Employers.

     (g)  During the term of this Agreement, the Employers will
pay the Executive's annual membership dues at the Spring Haven
Country Club or such other club of his choice in an amount up to
$7,500 per year, subject to increase from time to time as may be
determined by the Boards of Directors of the Employers.

     (h)  In the event of the Executive's death during the term
of this Agreement, his spouse, estate, legal representative or
named beneficiaries (as directed by the Executive in writing)
shall be paid on a monthly basis the Executive's annual
compensation from the Employers at the rate in effect at the time
of the Executive's death for a period equal to the period then
remaining under this Agreement.

     (i)  The Executives compensation, benefits and expenses
shall be paid by the Corporation and the Savings Bank in the same
proportion as the time and services actually expended by the
Executive on behalf of each respective Employer.

     4.   Expenses.  The Employers shall reimburse Executive or
otherwise provide for or pay for all reasonable expenses incurred
by Executive in furtherance of, or in connection with the
business of the Employers, including, but not by way of
limitation, automobile (including costs of leasing, insurance,
repairs, maintenance, and licensing) and traveling expenses, and
all reasonable entertainment expenses (whether incurred at the
Executive's residence, while traveling or otherwise), subject to
such reasonable documentation and other limitations as may be
established by the Boards of Directors of the Employers.  If such
expenses are paid in the first instance by Executive, the
Employers shall reimburse the Executive therefor.

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     5.   Termination.

     (a)  The Savings Bank shall have the right, at any time upon
prior Notice of Termination, to terminate the Executive's
employment hereunder for any reason, including without limitation
termination for Cause or Retirement, and Executive shall have the
right, upon prior Notice of Termination, to terminate his
employment hereunder for any reason.

     (b)  In the event that (i) Executive's employment is
terminated by the Savings Bank for Cause or Retirement or in the
event of the Executive's death, or (ii) Executive terminates his
employment hereunder other than for Good Reason, Executive shall
have no right pursuant to this Agreement to compensation or other
benefits for any period after the applicable Date of Termination
except as otherwise provided herein.

     (c)  In the event that (i) Executive's employment is
terminated (including termination due to Disability) by the
Savings Bank for other than for Cause, Retirement or the
Executive's death and in other than a Change in Control of the
Corporation or (ii) such employment is terminated by the
Executive due to a material breach of this Agreement by the
Savings Bank, which breach has not been cured within fifteen (15)
days after a written notice of non-compliance has been given by
the Executive to the Savings Bank, then the Savings Bank shall,
subject to the provisions of Section 6 hereof, if applicable

          (A)  pay to the Executive, in twenty-four (24) equal
     monthly installments beginning with the first business day
     of the month following the Date of Termination, a cash
     severance amount equal to two (2) times the Executive's Base
     Salary, and

          (B)  maintain and provide for a period ending at the
     earlier of (i) the expiration of the remaining term of
     employment pursuant hereto prior to the Notice of
     Termination or (ii) the date of the Executive's full-time
     employment by another employers (provided that the Executive
     is entitled under the terms of such employment to benefits
     substantially similar to those described in this
     subparagraph (B)), at no cost to the Executive, the
     Executive's continued participation in all group insurance,
     life insurance, health and accident, disability and other
     employee benefit plans, programs and arrangements in which
     the Executive was entitled to participate immediately prior
     to the Date of Termination (other than stock option and
     restricted stock plans of the Employers), provided that in
     the event that the Executive's participation in any plan,
     program or arrangement as provided in this subparagraph (B)
     is barred, or during such period any such plan, program or
     arrangement is discontinued or the benefits thereunder are
     materially reduced, the Savings Bank shall arrange to
     provide the Executive with benefits substantially similar to
     those which the Executive was entitled to receive under such
     plans, programs and arrangements immediately prior to the
     Date of Termination.

     (d)  In the event that (i) Executive's employment is
terminated by the Savings Bank for other than for Cause,
Disability, Retirement or the Executive's death but in connection
with a Change in Control of the Corporation or (ii) such
employment is terminated by the Executive for

                                    7

Good Reason, then the Savings Bank shall, subject to the provisions
of Section 6 hereof, if applicable

          (A)  pay to the Executive, in thirty-six (36) equal
     monthly installments beginning with the first business day
     of the month following the Date of Termination, a cash
     severance amount equal to three (3) times the Executive's
     Base Salary, and

          (B)  maintain and provide for a period ending at the
     earlier of (i) the expiration of the remaining term of
     employment pursuant hereto prior to the Notice of
     Termination or (ii) the date of the Executive's full-time
     employment by another employers (provided that the Executive
     is entitled under the terms of such employment to benefits
     substantially similar to those described in this
     subparagraph (B)), at no cost to the Executive, the
     Executive's continued participation in all group insurance,
     life insurance, health and accident, disability and other
     employee benefit plans, programs and arrangements in which
     the Executive was entitled to participate immediately prior
     to the Date of Termination (other than stock option and
     restricted stock plans of the Employers), provided that in
     the event that the Executive's participation in any plan,
     program or arrangement as provided in this subparagraph (B)
     is barred, or during such period any such plan, program or
     arrangement is discontinued or the benefits thereunder are
     materially reduced, the Savings Bank shall arrange to
     provide the Executive with benefits substantially similar to
     those which the Executive was entitled to receive under such
     plans, programs and arrangements immediately prior to the
     Date of Termination.

     (e)  In the event of the failure by the Employers to elect
or to re-elect or to appoint or to re-appoint the Executive to
the offices of Chairman and Chief Executive Officer of the
Corporation and the Savings Bank or a material adverse change
made by the Employers in the Executive's functions, duties or
responsibilities as Chairman and Chief Executive Officer of the
Corporation and the Savings Bank without the Executive's express
written consent, the Executive shall be entitled to terminate his
employment hereunder and shall be entitled to the payments and
benefits provided for in Section 5(c)(A) and (B); however, such
termination shall not otherwise constitute a material breach of
this Agreement by the Savings Bank.

     6.   Limitation of Benefits under Certain Circumstances.  If
the payments and benefits pursuant to Section 5 hereof, either
alone or together with other payments and benefits which
Executive has the right to receive from the Savings Bank, would
constitute a "parachute payment" under Section 280G of the Code,
the payments and benefits pursuant to Section 5 hereof shall be
reduced, in the manner determined by the Executive,  by the
amount, if any, which is the minimum necessary to result in no
portion of the payments and benefits under Section 5 being
non-deductible to the Savings Bank pursuant to Section 280G of
the Code and subject to the excise tax imposed under Section 4999
of the Code. The parties hereto agree that the payments and
benefits payable pursuant to this Agreement to the Executive upon
termination shall be limited to three times the Executives
Average Annual Compensation in accordance with the provisions of
Section 310 of the Handbook.   The determination of any reduction
in the payments and benefits to be made pursuant to Section 5
shall be based upon the opinion of independent tax counsel
selected by the Savings Bank's
                                    8

independent public accountants and paid by the Savings Bank.  Such
counsel shall be reasonably acceptable to the Savings Bank and the
Executive; shall promptly prepare the foregoing opinion, but in no
event later than thirty (30) days from the Date of Termination; and
may use such actuaries as such counsel deems necessary or advisable
for the purpose.  In the event that the Savings Bank and/or the
Executive do not agree with the opinion of such counsel, (i) the
Savings Bank shall pay to the Executive the maximum amount of
payments and benefits pursuant to Section 5, as selected by the
Executive, which such opinion indicates that there is a high
probability do not result in any of such payments and benefits being
non-deductible to the Savings Bank and subject to the imposition
of the excise tax imposed under Section 4999 of the Code and (ii)
the Savings Bank may request, and Executive shall have the right
to demand that the Savings Bank request, a ruling from the IRS as
to whether the disputed payments and benefits pursuant to Section
5 hereof have such consequences.  Any such request for a ruling
from the IRS shall be promptly prepared and filed by the Savings
Bank, but in no event later than thirty (30) days from the date
of the opinion of counsel referred to above, and shall be subject
to Executive's approval prior to filing, which shall not be
unreasonably withheld. The Savings Bank and Executive agree to be
bound by any ruling received from the IRS and to make appropriate
payments to each other to reflect any such rulings, together with
interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code.  Nothing contained herein shall result in
a reduction of any payments or benefits to which the Executive
may be entitled upon termination of employment under any
circumstances other than as specified in this Section 6, or a
reduction in the payments and benefits specified in Section 5
below zero.

     7.   Mitigation; Exclusivity of Benefits.

     (a)  The Executive shall not be required to mitigate the
amount of any benefits hereunder by seeking other employment or
otherwise, nor shall the amount of any such benefits be reduced
by any compensation earned by the Executive as a result of
employment by another employers after the Date of Termination or
otherwise.

     (b)  The specific arrangements referred to herein are not
intended to exclude any other benefits which may be available to
the Executive upon a termination of employment with the Employers
pursuant to employee benefit plans of the Employers or otherwise.

     8.   Withholding.  All payments required to be made by the
Savings Bank hereunder to the Executive shall be subject to the
withholding of such amounts, if any, relating to tax and other
payroll deductions as the Savings Bank may reasonably determine
should be withheld pursuant to any applicable law or regulation.

     9.   Assignability.  The Savings Bank may assign this
Agreement and its rights and obligations hereunder in whole, but
not in part, to any corporation, bank or other entity with or
into which the Savings Bank may hereafter merge or consolidate or
to which the Savings Bank may transfer all or substantially all
of its assets, if in any such case said corporation, bank or
other entity shall by operation of law or expressly in writing
assume all obligations of the Savings Bank hereunder as fully as
if it had been originally made a party hereto, but may not
otherwise assign this

                                    9

Agreement or its rights and obligations hereunder.  The Executive
may not assign or transfer this Agreement or any rights or obligations
hereunder.

     10.  Notice.  For the purposes of this Agreement, notices
and all other communications provided for in this Agreement shall
be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective
addresses set forth below:

     To the Savings Bank:  President
                           First Keystone Federal Savings Bank
                           22 West State Street
                           Media, Pennsylvania  19063

     To the Executive:     Donald S. Guthrie
                           At the address last appearing on the
                           personnel records of the Savings Bank

     11.  Amendment; Waiver.  No provisions of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the
Executive and such officer or officers as may be specifically
designated by the Board of Directors of the Savings Bank to sign
on its behalf.  No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time.

     12.  Governing Law.  The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the United States where applicable and otherwise
by the substantive laws of the Commonwealth of Pennsylvania.

     13.  Nature of Obligations.  Nothing contained herein shall
create or require the Savings Bank to create a trust of any kind
to fund any benefits which may be payable hereunder, and to the
extent that the Executive acquires a right to receive benefits
from the Savings Bank hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Savings
Bank.

     14.  Headings.  The section headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.

     15.  Validity.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.

     16.  Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.

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     17.  Regulatory Actions.  The following provisions shall be
applicable to the parties to the extent that they are required to
be included in employment agreements between a savings
association and its employees pursuant to Section 563.39(b) of
the Regulations Applicable to all Savings Associations, 12 C.F.R.
563.39(b), or any successor thereto, and shall be controlling in
the event of a conflict with any other provision of this
Agreement, including without limitation Section 5 hereof.

     (a)  If the Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of the
Savings Bank's affairs pursuant to notice served under Section
8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance Act
("FDIA")(12 U.S.C. 1818(e)(3) and 1818(g)(1)), the Savings Bank's
obligations under this Agreement shall be suspended as of the
date of service, unless stayed by appropriate proceedings.  If
the charges in the notice are dismissed, the Savings Bank may, in
its discretion:  (i) pay Executive all or part of the
compensation withheld while its obligations under this Agreement
were suspended, and (ii) reinstate (in whole or in part) any of
its obligations which were suspended.

     (b)  If the Executive is removed  from office and/or
permanently prohibited from participating in the conduct of the
Savings Bank's affairs by an order issued under Section 8(e)(4)
or Section 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)),
all obligations of the Savings Bank under this Agreement shall
terminate as of the effective date of the order, but vested
rights of the Executive and the Savings Bank as of the date of
termination shall not be affected.

     (c)  If  the Savings Bank is in default, as defined in
Section 3(x)(1) of the FDIA (12 U.S.C. 1813(x)(1)), all
obligations under this Agreement shall terminate as of the date
of default, but vested rights of the Executive and the Savings
Bank as of the date of termination shall not be affected.

     (d)  All obligations under this Agreement shall be
terminated pursuant to 12 C.F.R. 563.39(b)(5) (except to the
extent that it is determined that continuation of the Agreement
for the continued operation of the Savings Bank is necessary):
(i) by the Director of the OTS, or his/her designee, at the time
the Federal Deposit Insurance Corporation ("FDIC") enters into an
agreement to provide assistance to or on behalf of the Savings
Bank under the authority contained in Section 13(c) of the FDIA
(12 U.S.C. 1823(c)); or (ii) by the Director of the OTS, or
his/her designee, at the time the Director or his/her designee
approves a supervisory merger to resolve problems related to
operation of the Savings Bank or when the Savings Bank is
determined by the Director of the OTS to be in an unsafe or
unsound condition, but vested rights of the Executive and the
Savings Bank as of the date of termination shall not be affected.

     18.  Regulatory Prohibition.  Notwithstanding any other
provision of this Agreement to the contrary, any payments made to
the Executive pursuant to this Agreement, or otherwise, are
subject to and conditioned upon their compliance with Section
18(k) of the FDIA (12 U.S.C. 1828(k)) and any regulations
promulgated thereunder.

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     19.  Entire Agreement.  This Agreement embodies the entire
agreement between the Savings Bank and the Executive with respect
to the matters agreed to herein.  All prior agreements between
the Savings Bank and the Executive with respect to the matters
agreed to herein, including without limitation the Agreement
between the Savings Bank and the Executive dated May 26, 1999,
are hereby superseded and shall have no force or effect.
Notwithstanding the foregoing, nothing contained in this
Agreement shall affect the agreement of even date being entered
into between the Corporation and the Executive.
































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     IN WITNESS WHEREOF, this Agreement has been executed as of
the date first above written.




Attest:                      FIRST KEYSTONE BANK



/s/Carol Walsh               By:  /s/Thomas M. Kelly
----------------------            --------------------------------
Carol Walsh                       Thomas M. Kelly
                                  Executive Vice President


Attest:                      EXECUTIVE



/s/Carol Walsh               By:  /s/Donald S. Guthrie
----------------------            -------------------------------
Carol Walsh                       Donald S. Guthrie, Individually























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