CHANGE OF CONTROL AGREEMENT

                                       FOR

                                 JAMES E. KELLY

     THIS CHANGE OF CONTROL AGREEMENT (this "Agreement"), made as of November
17, 1997, is by and among PRIME BANCORP, INC. ("Holding Company"), PRIME BANK, a
Pennsylvania bank with main office at 6425 Rising Sun Avenue, Philadelphia, PA
19111 ("Bank") (Holding Company and Bank are sometimes referred to individually
and collectively herein as the "Company") and JAMES E. KELLY, an individual
residing at 4043 Westaway Drive, Lafayette Hill, PA ("Executive").

                                   Background

     A. Company and Executive wish to enter into an agreement pursuant to which
Company wishes to secure the future services of Executive by providing Executive
the severance payments provided in this Agreement as additional incentive to
induce Executive to devote Executive's time and attention to the interests and
affairs of the Company.

     B. Executive is willing to enter into this Agreement upon the terms and
conditions herein set forth.

     C. The Boards of Directors of the Holding Company and the Bank have each
approved this Agreement and it is intended to be maintained as part of the
official records of the Holding Company and the Bank.

     NOW THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the parties agree as follows:

     1. Employment. Except strictly to such extent (if any) as may be provided
in another agreement between Holding Company or Bank and Executive, Executive
shall remain an employee at will of the Company hereafter. This Agreement is not
an employment agreement, but shall only be interpreted as governing the payment
of severance which may be due to Executive upon termination of Executive's
employment with Company under the specific circumstances described in this
Agreement. No provision of this Agreement shall be interpreted to derogate from
the power of the Company or its Board of Directors to terminate the employment
of the Executive, subject nevertheless to the terms of this Agreement.

     2. Compensation. The compensation to be paid by Company to Executive from
time to time, including any fringe benefits or other employee benefits, shall
not be governed by this Agreement. This agreement shall not be deemed to affect
the terms of any stock options, employee benefits or other agreements between
the Company and Executive.

     3. Severance Payments upon Termination of Employment After a "Change in
Control". This Agreement does not govern any termination of Executive's
employment with Company which occurs prior to a "change in control" as defined
in subsection (e) of this Section. No inference shall be drawn from any
provision of this Section 3 concerning the rights and obligations of the


<PAGE>


parties in connection with a termination of Executive's employment prior to such
a "change in control."

         (a) Termination by Company for Cause or Not for Cause. If Executive's
employment is terminated by Company for "cause" (as defined in subsection (c) of
this Section) at any time, or with or without "cause" prior to (or more than two
years after) a "change in control", Executive shall have no right to any
severance or other payments under this Agreement due to such termination. If
Executive is terminated by Company or Holding Company within two (2) years after
a "change in control" (as defined in subsection (e) of this Section) other than
for "cause", Executive shall be entitled to a severance payment as set forth in
this Section. A termination by Company of Executive's employment with Bank only
or Holding Company only shall be deemed a termination for purposes of this
Agreement, and Executive's right to severance payments (if any) hereunder, shall
be determined as if such termination were a termination from employment with
Company entirely.

         (b) Termination by Executive for Good Reason or Not for Good Reason. If
Executive terminates Executive's employment with Holding Company and Bank prior
to a change in control, or without "good reason" (as defined in subsection (d)
of this Section) at any time, Executive shall have no right to any severance or
other payments under this Agreement due to such termination. If Executive
terminates Executive's employment with Holding Company and Bank for "good
reason" after a "change in control" (as defined in subsection (e) of this
Section), Executive's shall be entitled to a severance payment as set forth in
this Section.

         (c) Definition of "Cause". For the purpose of this Agreement,
termination for "cause" shall mean termination for personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, conviction of a felony, suspension or removal from office or prohibition
from participation in the conduct of Holding Company's or Bank's affairs
pursuant to a notice or other action by any Regulatory Agency, or willful
violation of any law, rule or regulation or final cease-and-desist order which
in the reasonable judgment of the Board of Directors of the Company will
probably cause substantial economic damages to the Company, willful or
intentional breach or neglect by Executive of his duties, or material breach of
any material provision of this Agreement. For purposes of this paragraph, no
act, or failure to act on Executive's part shall be considered "willful" unless
done, or omitted to be done, by him without good faith and without reasonable
belief that this action or omission was in the best interest of Company;
provided that any act or omission to act by Executive in reliance upon an
approving opinion of counsel to the Company or counsel to the Executive shall
not be deemed to be willful. The terms "incompetence" and "misconduct" shall be
defined with reference to standards generally prevailing in the banking
industry. In determining incompetence and misconduct, Company shall have the
burden of proof with regard to the acts or omission of Executive and the
standards prevailing in the banking industry.

         (d) Definition of "Good Reason". For purposes of this Agreement,
Executive shall have "good reason" for terminating his employment with Holding
Company and Bank if Executive terminates such employment within two (2) years
after the occurrence of any one or more of the following events (a "Triggering
Event") without Executive's express written consent, but only if the


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<PAGE>


Triggering Event occurs within two (2) years after a "change in control" (as
defined in subsection (e) of this Section) of Bank or Holding Company: (i) the
assignment to Executive of any duties inconsistent with Executive's positions,
duties, responsibilities, titles or offices with Bank or Holding Company as in
effect immediately prior to a change in control of Bank or Holding Company, (ii)
any removal of Executive from, or any failure to re-elect Executive to, any of
such positions, except in connection with a termination or suspension of
employment for cause, disability, death or retirement, (iii) a reduction by
Holding Company or Bank in Executive's base annual salary as in effect
immediately prior to a change in control or as the same may be increased from
time to time thereafter, or (iv) any purported termination of Executive's
employment with Bank or Holding Company when "cause" (as defined in this
Agreement) for such termination does not exist.

         (e) Definition of "Change in Control". For purposes of this Agreement,
a "change in control" of Company or Bank shall mean any one or more of the
following:

             (1) a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act") (or any successor
provision) as it may be amended from time to time; or

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

         (f) Amount of Severance Payment. If Executive is entitled to severance
payments under subsection (a) or (b) of this Section, and if Executive shall
have signed a release or releases as more fully described in Section 4 of this
Agreement, Company shall pay as severance to Executive an amount equal to the
sum of: (I) the product of multiplying (A) the highest annual base salary paid
to the Executive and includible in the Executive's gross income for federal
income tax purposes for any of the five calendar years preceding the calendar
year in which the date of termination occurs (or such lesser number of full
calendar years as the Executive has been employed by Company at the time of
termination), by (B) 2.00; plus (II) the "Pro-Rated Portion" (as defined below)
of an amount (the "Bonus Amount") equal to the cash bonus (if any) received by
Executive and includible in the Executive's gross income for federal income tax
purposes in the calendar year immediately preceding the calendar year in which
the date of termination occurs. For purposes of this Agreement, the "Pro-Rated
Portion" of the Bonus Amount shall be determined with reference to the date of
termination and the fiscal year of the Company in which such date of termination
occurs, and shall be equal to the product obtained by multiplying the Bonus
Amount by a fraction, the numerator of which is the number of days in the fiscal
year to and including the date of termination, and the denominator of which
shall be 365 (or 366 if the date of termination occurs in a leap year).


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<PAGE>


         (g) Time of Severance Payment. The severance payment provided for in
subsection (f) of this Section shall be made in a lump sum within one (1)
calendar week following the date of termination, but Company shall be entitled
to apply to such payment federal, state and local income or wage tax withholding
to the same degree it was withholding on account of such taxes from Executive's
salary immediately prior to termination.

         (h) Limitation on Severance Payments. Notwithstanding any provision of
this Agreement or any other agreement of the parties, if the severance payment
or payments under this Agreement, either alone or together with other payments
which the Executive has the right to receive from the Company, would constitute
a "parachute payment" (as defined in Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code") or any successor provision, such lump sum
severance payment shall be reduced to the largest amount as will result in no
portion of the lump sum severance payment under this Agreement being subject to
the excise tax imposed by Section 4999 of the Code.

         (i) Form of Notice. Any termination of Executive's employment by
Company or by Executive after a "change in control" shall be communicated by a
dated, written notice, signed by the party giving the notice, which shall (A)
indicate the specific termination provision in this Agreement relied upon; (B)
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive's employment under the provision so
indicated; (C) specify the effective date of termination.

         (j) Subject to Regulatory Requirements. All obligations under this
Agreement are subject to termination by any bank regulatory agency having
jurisdiction over Holding Company or Bank ("Regulatory Agency") in accordance
with any applicable provisions of law or regulations granting such authority,
but rights of the Executive to compensation earned as of the date of termination
shall not be affected.

         (k) No Obligation to Mitigate. Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise. The severance payments provided for in this
Agreement shall not be reduced by any compensation or other payments received by
Executive after the date of termination of Executive's employment from any
source.

     4. Execution of Release Required. Executive agrees that, as a precondition
to receiving the payments provided for in this Agreement, Executive shall have
executed and delivered to Holding Company and Bank a release or releases, in
form satisfactory to Holding Company and Bank, releasing all claims which
Executive may then have against Holding Company or Bank, including without
limitation any claims related to employment, termination of employment,
discrimination, harassment, compensation or benefits, but excluding any claims
for payments due or to become due under this Agreement.

     5. Payment Obligations Absolute. Provided that the preconditions for
payment set forth in this Agreement are fully satisfied, Company's obligation to
pay Executive the severance payments provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including,


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<PAGE>


without limitation, any set-off counter claim, recoupment, defense or other
right which Company may have against Executive. All amounts payable by Company
hereunder shall be paid without notice or demand.

     6. Continuing Obligations. Executive shall retain in confidence any
confidential information known to him concerning Company and its business so
long as such information is not publicly disclosed.

     7. Reimbursement of Legal Fees. The Company shall pay all reasonable costs,
including attorneys' fees incurred by Executive (a) in seeking to obtain any
amount or benefit granted pursuant to this Agreement which the Executive in good
faith shall believe the Company has not paid or provided, or shall not be
intending to pay or provide when due, or (b) in seeking to enforce any
obligation which the Executive in good faith shall believe the Company has to
the Executive under the Agreement, or (c) in interpreting or negotiating the
terms of this Agreement in good faith. Such reasonable cost and fees shall be
paid by the Company whether or not the Executive shall have commenced litigation
or any other similar proceedings.

     8. Amendments. No amendments to this Agreement shall be binding unless in a
writing, signed by both parties, which states expressly that it amends this
Agreement.

     9. Notices. Notices under this Agreement shall be deemed sufficient and
effective if (i) in writing and (ii) either (A) when delivered in person or by
facsimile, telecopier, telegraph or other electronic means capable of being
embodied in written form or (B) forty-eight (48) hours after deposit thereof in
the U.S. mails by certified or registered mail, return receipt requested,
postage prepaid, addressed to each party at such party's address first set forth
above and, in the case of Company, to the attention of the Chairman of the
Board, or to such other notice address as the party to be notified may have
designated by written notice to the sending party.

     10. Prior Agreements. There are no other agreements between Company and
Executive regarding Executive's employment. This Agreement is the entire
agreement of the parties with respect to its subject matter and supersedes any
and all prior or contemporaneous discussions, representations, understandings or
agreements regarding its subject matter.

     11. Assigns and Successors. The rights and obligations of Company and
Executive under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of Company and Executive respectively,
provided, however, that Executive shall not assign or anticipate any of his
rights hereunder, whether by operation of law or otherwise. For purposes of this
Agreement, "Company" shall also refer to any successor to Holding Company or
Bank, whether such succession occurs by merger, consolidation, purchase and
assumption, sale of assets or otherwise.

     12. Executive's Acknowledgment of Terms. Executive acknowledges that he has
read this Agreement fully and carefully, understands its terms and that it has
been entered into by Executive voluntarily. Executive acknowledges that any
payments to be made hereunder will constitute additional compensation to
Executive. Executive further acknowledges that Executive has had sufficient
opportunity to consider this Agreement and discuss it with


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Executive's own advisors, including Executive's attorney and accountants.
Executive has been informed that Executive has the right to consider this
Agreement for a period of at least twenty one (21) days prior to entering into
it. Executive acknowledges that Executive has taken sufficient time to consider
this Agreement before signing it. Executive also acknowledges that Executive has
the right to revoke this Agreement for a period of seven (7) days following this
Agreement's execution by giving written notice of revocation to Company.

     IN WITNESS WHEREOF, the parties hereto have caused the due execution of
this Agreement as of the date first set forth above.

                                            Holding Company:
Attest:                                     PRIME BANCORP, INC.


/s/ Seth Mackler                            By: /s/ James J. Lynch
------------------------                        -------------------------------
    Secretary                                   President

                                            Bank:
Attest:                                     PRIME BANK


/s/ Seth Mackler                            By: /s/ James J. Lynch
------------------------                        -------------------------------
    Secretary                                   President


Witness:                                    Executive:


/s/ Seth Mackler                            /s/ James E. Kelly
------------------------                        -------------------------------
                                                James E. Kelly, Individually