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             HARBOR FEDERAL BANCORP, INC.
1995 STOCK OPTION AND INCENTIVE PLAN, AS AMENDED 1/

     
     1.  PURPOSE OF THE PLAN.

     The purpose of this Harbor Federal Bancorp, Inc. 1995
Stock Option and Incentive Plan (the "Plan") is to advance the
interests of the Company through providing select Employees and
Directors of the Bank, the Company, and their Affiliates with
the opportunity to acquire Shares.  By encouraging such stock
ownership, the Company seeks to attract, retain and motivate the
best available personnel for positions of substantial respon-
sibility and to provide additional incentive to Directors and
key Employees of the Company or any Affiliate to promote the
success of the business. 

     2.  DEFINITIONS.  

     As used herein, the following definitions shall apply.

     (a)  "Affiliate" shall mean any "parent corporation" or
"subsidiary corporation" of the Company, as such terms are
defined in Section 424(e) and (f), respectively, of the Code.

     (b)  "Agreement" shall mean a written agreement entered
into in accordance with Paragraph 5(c).

     (c)  "Awards" shall mean, collectively, Options and SARs,
unless the context clearly indicates a different meaning.

     (d)  "Bank" shall mean Harbor Federal Savings Bank. 

     (e)  "Board" shall mean the Board of Directors of the
Company.

     (f)  "Change in Control" shall mean any one of the
following events: (1) the acquisition of ownership, holding or
power to vote more than 25% of the Bank's or the Company's
voting stock, (2) the acquisition of the ability to control the
election of a majority of the Bank's or the Company's directors,
(3) the acquisition of a controlling influence over the
management or policies of the Bank or the Company by any person
or by persons acting as a "group" (within the meaning of Section
13(d) of the Securities Exchange Act of 1934) (except in the
case of (1), (2) and (3) hereof, ownership or control of the
Bank by the Company itself shall not constitute a "Change in
Control"), or (4) during any period of two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of the Company or the Bank (the "Existing
Board") (the "Continuing Directors") cease for any reason to
constitute at least two-thirds thereof, provided that any in-
dividual whose election or nomination for election as a member
of
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the Existing Board was approved by a vote of at least two-
thirds of the Continuing Directors then in office shall be
considered a Continuing Director.  For purposes of this
subparagraph only, the term "person" refers to an individual or
a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed
herein.  The decision of the Committee as to whether a change in
control has occurred shall be conclusive and binding.

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

     (h)  "Committee" shall mean the Stock Option Committee
appointed by the Board in accordance with Paragraph 5(a) hereof.

     (i)  "Common Stock" shall mean the common stock, par
value $.01 per share, of the Company.

     (j)  "Company" shall mean Harbor Federal Bancorp, Inc.

     (k)  "Continuous Service" shall mean the absence of any
interruption or termination of service as an Employee or
Director of the Company or an Affiliate.  Continuous Service
shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the
Company or in the case of transfers between payroll locations of
the Company or between the Company, an Affiliate, or a
successor.

     (l)  "Director" shall mean any member of the Board, and
any member of the board of directors of any Affiliate that the
Board has by resolution designated as being eligible for
participation in this Plan.

     (m)  "Effective Date" shall mean the date specified in
Paragraph 15 hereof.

     (n)  "Employee" shall mean any person employed by the
Company, the Bank, or an Affiliate.

     (o)  "Exercise Price" shall mean the price per Optioned
Share at which an Option or SAR may be exercised.

     (p)  "ISO" means an option to purchase Common Stock which
meets the requirements set forth in the Plan, and which is
intended to be and is identified as an "incentive stock option"
within the meaning of Section 422 of the Code.

     (q)  "Market Value" shall mean the fair market value of
the Common Stock, as determined under Paragraph 7(b) hereof.

     (r)  "Non-Employee Director" shall have the meaning
provided in Rule 16bb-3.
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     (s)  "Non-ISO" means an option to purchase Common Stock
which meets the requirements set forth in the Plan but which is
not intended to be and is not identified as an ISO.

     (t)  "Option" means an ISO and/or a Non-ISO.

     (u)  "Optioned Shares" shall mean Shares subject to an
Option granted pursuant to this Plan.

     (v)  "Participant" shall mean any person who receives an
Award pursuant to the Plan.

     (w)  "Plan" shall mean this Harbor Federal Bancorp, Inc.
1995 Stock Option and Incentive Plan.

     (x)  "Rule 16b-3" shall mean Rule 16b-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended.

     (y)  "Share" shall mean one share of Common Stock.

     (z)  "SAR" (or "Stock Appreciation Right") means a right
to receive the appreciation in value, or a portion of the
appreciation in value, of a specified number of shares of Common
Stock.

     3.  TERM OF THE PLAN AND AWARDS.

     (a)  Term of the Plan.  The Plan shall continue in effect
for a term of ten years from the Effective Date, unless sooner
terminated pursuant to Paragraph 17 hereof.  No Award shall be
granted under the Plan after ten years from the Effective Date.

     (b)  Term of Awards.  The term of each Award granted
under the Plan shall be established by the Committee, but shall
not exceed 10 years; provided, however, that in the case of an
Employee who owns Shares representing more than 10% of the
outstanding Common Stock at the time an ISO is granted, the term
of such ISO shall not exceed five years.

     4.  SHARES SUBJECT TO THE PLAN.  

     (a)   General Rule.  Except as otherwise required by the
provisions of Paragraph 12 hereof, the aggregate number of
Shares deliverable pursuant to Awards shall not exceed 218,009
Shares, which equals 10% of the Shares issued in the Bank's
conversion from mutual-to-stock form.  Such Shares may either be
authorized but unissued Shares or Shares held in treasury.  If
Awards should expire, become unexercisable or be forfeited for
any reason without having been exercised or become vested in
full, the Optioned Shares shall, unless the Plan shall have been
terminated, be available for the grant of additional Awards
under the Plan.
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     (b)   Special Rule for SARs.  The number of Shares with
respect to which an SAR is granted, but not the number of Shares
which the Company delivers or could deliver to an Employee or
individual upon exercise of an SAR, shall be charged against the
aggregate number of Shares remaining available under the Plan;
provided, however, that in the case of an SAR granted in
conjunction with an Option, under circumstances in which the
exercise of the SAR results in termination of the Option and
vice versa, only the number of Shares subject to the Option
shall be charged against the aggregate number of Shares
remaining available under the Plan.  The Shares involved in an
Option as to which option rights have terminated by reason of
the exercise of a related SAR, as provided in Paragraph 10
hereof, shall not be available for the grant of further Options
under the Plan.

     5.  ADMINISTRATION OF THE PLAN.

     (a)  Composition of the Committee.  The Plan shall be
administered by the Committee, which shall consist of not less
than two (2) members of the Board who are Non-Employee
Directors.  Members of the Committee shall serve at the pleasure
of the Board.  In the absence at any time of a duly appointed
Committee, the Plan shall be administered by those members of
the Board who are Non-Employee Directors.

     (b)  Powers of the Committee.  Except as limited by the
express provisions of the Plan or by resolutions adopted by the
Board, the Committee shall have sole and complete authority and
discretion (i) to select Participants and grant Awards, (ii) to
determine the form and content of Awards to be issued in the
form of Agreements under the Plan, (iii) to interpret the Plan,
(iv) to prescribe, amend and rescind rules and regulations
relating to the Plan, and (v) to make other determinations
necessary or advisable for the administration of the Plan.  The
Committee shall have and may exercise such other power and
authority as may be delegated to it by the Board from time to
time.  A majority of the entire Committee shall constitute a
quorum and the action of a majority of the members present at
any meeting at which a quorum is present, or acts approved in
writing by a majority of the Committee without a meeting, shall
be deemed the action of the Committee.

     (c)  Agreement.  Each Award shall be evidenced by a
written agreement containing such provisions as may be approved
by the Committee.  Each such Agreement shall constitute a
binding contract between the Company and the Participant, and
every Participant, upon acceptance of such Agreement, shall be
bound by the terms and restrictions of the Plan and of such
Agreement.  The terms of each such Agreement shall be in
accordance with the Plan, but each Agreement may include such
additional provisions and restrictions determined by the
Committee, in its discretion, provided that such additional
provisions and restrictions are not inconsistent with the terms
of the Plan.  In particular, the Committee shall set forth in
each Agreement (i) the Exercise Price of an Option or SAR,
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(ii)the number of Shares subject to, and the expiration date of,
the Award, (iii) the manner, time and rate (cumulative or
otherwise) of exercise or vesting of such Award, and (iv) the
restrictions, if any, to be placed upon such Award, or upon
Shares which may be issued upon exercise of such Award.

     The Chairman of the Committee and such other officers as
shall be designated by the Committee are hereby authorized to
execute Agreements on behalf of the Company and to cause them to
be delivered to the recipients of Awards.

     (d)  Effect of the Committee's Decisions.  All decisions,
determinations and interpretations of the Committee shall be
final and conclusive on all persons affected thereby.

     (e)  Indemnification.  In addition to such other rights
of indemnification as they may have, the members of the
Committee shall be indemnified by the Company in connection with
any claim, action, suit or proceeding relating to any action
taken or failure to act under or in connection with the Plan or
any Award, granted hereunder to the full extent provided for
under the Company's governing instruments with respect to the
indemnification of Directors.

     6.  GRANT OF OPTIONS.

     (a)  General Rule.  Only Employees shall be eligible to
receive discretionary grants of Options pursuant to the Plan. 
Non-Employee Directors shall be ineligible to receive
discretionary grants of Options (or other Awards), but shall
receive formula grants pursuant to Paragraph 9 hereof.

     (b)  Automatic Grants to Employees.  On the Effective
Date, each of the following individuals shall receive an ISO to
purchase the number of Shares listed below, at an Exercise Price
per Share equal to the Market Value of a Share on the Effective
Date; provided that such grant shall not be made to an
individual whose Continuous Service terminates on or before the
Effective Date: 

                                  Percentage of Shares
          Optionee            Reserved under Paragraph 4(a)
          --------            -----------------------------

          Robert A. Williams            25.00
          Norbert J. Luken              13.33
          Lawrence W. Williams          13.33
          Glenda L. Neubert             13.33

     With respect to each of the above-named Optionees, the
Option granted to the Optionee hereunder (i) shall become vested
and exercisable, on a cumulative basis, with respect to 20% of
the Optioned Shares upon each of the first five annual
anniversary dates of the Effective Date, provided that vesting
shall not occur on a particular date if the Optionee's
Continuous Service has

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terminated on or before such date, (ii) shall have a term of ten
years from the Effective Date, and (iii) shall be subject to the
general rule set forth in Paragraph 8(c) with respect to the
effect of an Optionee's termination of Continuous Service on the
Optionees's right to exercise his Options.

     (c) Special Rules for ISOs.  The aggregate Market Value,
as of the date the Option is granted, of the Shares with respect
to which ISOs are exercisable for the first time by an Employee
during any calendar year (under all incentive stock option
plans, as defined in Section 422 of the Code, of the Company or
any present or future Parent or Subsidiary of the Company) shall
not exceed $100,000.  Notwithstanding the foregoing the
Committee may grant Options in excess of the foregoing
limitations, in which case such Options granted in excess of
such limitation shall be Options which are Non-ISOs.

     7.  EXERCISE PRICE FOR OPTIONS.  

     (a)  Limits on Committee Discretion.  The Exercise Price
as to any particular Option granted under the Plan shall not be
less than the Market Value of the Optioned Shares on the date of
grant.  In the case of an Employee who owns Shares representing
more than 10% of the Company's outstanding Shares of Common
Stock at the time an ISO is granted, the Exercise Price shall
not be less than 110% of the Market Value of the Optioned Shares
at the time the ISO is granted.

     (b)  Standards for Determining Exercise Price.  If the
Common Stock is listed on a national securities exchange
(including the NASDAQ National Market System) on the date in
question, then the Market Value per Share shall be not less than
the average of the highest and lowest selling price on such
exchange on such date, or if there were no sales on such date,
then the Exercise Price shall be not less than the mean between
the bid and asked price on such date.  If the Common Stock is
traded otherwise than on a national securities exchange on the
date in question, then the Market Value per Share shall be not
less than the mean between the bid and asked price on such date,
or, if there is no bid and asked price on such date, then on the
next prior business day on which there was a bid and asked
price.  If no such bid and asked price is available, then the
Market Value per Share shall be its fair market value as
determined by the Committee, in its sole and absolute
discretion. 

     8.  EXERCISE OF OPTIONS.

     (a)  Generally.  Any Option granted hereunder shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement
granted to a Participant.  An Option may not be exercised for a
fractional Share.
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     (b)  Procedure for Exercise.  A Participant may exercise
Options, subject to provisions relative to its termination and
limitations on its exercise, only by (1) written notice of
intent to exercise the Option with respect to a specified number
of Shares, and (2) payment to the Company (contemporaneously
with delivery of such notice) in cash, in Common Stock, or a
combination of cash and Common Stock, of the amount of the
Exercise Price for the number of Shares with respect to which
the Option is then being exercised.  Each such notice (and
payment where required) shall be delivered, or mailed by prepaid
registered or certified mail, addressed to the Treasurer of the
Company at the Company's executive offices.  Common Stock
utilized in full or partial payment of the Exercise Price for
Options shall be valued at its Market Value at the date of
exercise.

     (c)  Period of Exercisability.  Except to the extent
otherwise provided in the terms of an Agreement, an Option may
be exercised by a Participant only while he is an Employee and
has maintained Continuous Service from the date of the grant of
the Option, or within three months after termination of such
Continuous Service (but not later than the date on which the
Option would otherwise expire), except if the Employee's
Continuous Service terminates by reason of --

     (1)  "Just Cause" which for purposes hereof shall have the
     meaning set forth in any unexpired employment or severance
     agreement between the Participant and the Bank and/or the
     Company (and, in the absence of any such agreement, shall
     mean termination because of the Employee's 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), then
     the Participant's rights to exercise such Option shall
     expire on the date of such termination;

     (2)  death, then to the extent that the Participant would
     have been entitled to exercise the Option immediately
     prior to his death, such Option of the deceased
     Participant may be exercised within two years from the
     date of his death (but not later than the date on which
     the Option would otherwise expire) by the personal
     representatives of his estate or person or persons to whom
     his rights under such Option shall have passed by will or
     by laws of descent and distribution;

     (3)  Permanent and Total Disability (as such term is
     defined in Section 22(e)(3) of the Code), then to the
     extent that the Participant would have been entitled to
     exercise the Option immediately prior to his Permanent and
     Total Disability, such Option may be exercised within one
     year from the date of such Permanent and Total Disability,
     but not later than the date on which the Option would
     otherwise expire.
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     Notwithstanding the provisions of any Option which
provides for its exercise in installments as designated by the
Committee, such Option shall become immediately exercisable upon
the Participant's death or Permanent and Total Disability.

     Notwithstanding any other provision of this Plan to the
contrary, common stock of the Company that is purchased upon
exercise of an Option or SAR may not be sold within the six-
month period following the grant date of that Option or SAR.

     (d)  Effect of the Committee's Decisions.  The Committee's
determination whether a Participant's Continuous Service has
ceased, and the effective date thereof shall be final and
conclusive on all persons affected thereby.     

     9.   GRANTS OF OPTIONS TO NON-EMPLOYEE DIRECTORS

     (a)  Automatic Grants.  Notwithstanding any other
provisions of this Plan, each Director who is not an Employee
but is a Director on the Effective Date shall receive, on said
date, Non-ISOs to purchase 4% of the Shares reserved under
Paragraph 4(a) of the Plan.  Such Non-ISOs shall have an
Exercise Price per Share equal to the Market Value of a Share on
the date of grant.

     Each Director who joins the Board after the Effective Date
and is not then an Employee shall receive, on the date of
joining the Board, NON-ISOs to purchase 2% of the Shares
reserved under Paragraph 4(a) of the Plan, at an Exercise Price
per Share equal to its Market Value on the date of grant.

     (b)  Terms of Exercise.  Options received under the
provisions of this Paragraph may be exercised from time to time
by (a) written notice of intent to exercise the Option with
respect to all or a specified number of the Optioned Shares, and
(b) payment to the Company (contemporaneously with the delivery
of such notice), in cash, in Common Stock, or a combination of
cash and Common Stock, of the amount of the Exercise Price for
the number of the Optioned Shares with respect to which the
Option is then being exercised.  Each such notice and payment
shall be delivered, or mailed by prepaid registered or certified
mail, addressed to the Treasurer of the Company at the Company's
executive offices.  A Director who exercises Options pursuant to
this paragraph may satisfy all applicable federal, state and
local income and employment tax withholding obligations, in
whole or in part, by irrevocably electing to have the Company
withhold shares of Common Stock, or to deliver to the Company
shares of Common Stock that he already owns, having a value
equal to the amount required to be withheld; provided that to
the extent not inconsistent herewith, such election otherwise
complies with those requirements of Paragraphs 8 and 20 hereof.

     Options granted under this Paragraph shall have a term of
ten years, and may be exercised at any time and from time to
time prior

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to their expiration.  In the event of such Director's death
during the term of his directorship, Options granted under
this Paragraph may be exercised within two years from the date
of his death by the personal representatives of his estate or
person or persons to whom his rights under such Option shall
have passed by will or by laws of descent and distribution, but
in no event later than the date on which such Options would
otherwise expire.  Options granted under this Paragraph shall
expire one year after the date on which a Director terminates
Continuous Service on the Board, but in no event later than the
date on which such Options would otherwise expire.  Unless
otherwise inapplicable or inconsistent with the provisions of
this paragraph, the Options to be granted to Directors hereunder
shall be subject to all other provisions of this Plan.     

     (c)  Deferral of Stock Options.  A Participant may elect
to transfer to the Company unexercised Non-ISOs  that he or she
has received pursuant to the Plan, in consideration of the
Bank's credit of a Phantom Stock Option to the Participant's
account ("Account")  under the Bank's Deferred Compensation
Plan.  Such an election must (i) be made on the Stock Option
Surrender Form attached hereto, and (ii) be accepted by the
Committee.  At any time and from time to time, a Participant who
transfers stock options to the Company and whose Account is
credited with a Phantom Stock Option may direct the Committee to
exercise all or any part of the Phantom Stock Option.  The
Company shall collect the exercise price associated with the
Phantom Stock Options through reduction of the Participant's
Account (which shall not be permitted to have a negative
balance), and shall credit the Participant's Account with the
shares purchased upon exercise, as well as any future cash or
stock dividends on such shares.  The shares acquired upon
exercise of the Phantom Stock Options may, in the Company's
discretion, be held in the trust established under the Bank's
Deferred Compensation Plan until distributed to the Participant. 
The portion of the Participant's Account that consists of shares
of Common Stock will be distributed, in kind, in accordance with
the Participant's distribution election form made with respect
to the Participant's Account.   

     10.  SARS (STOCK APPRECIATION RIGHTS)

     (a) Granting of SARs.  In its sole discretion, the
Committee may from time to time grant SARs to Employees either
in conjunction with, or independently of, any Options granted
under the Plan.  An SAR granted in conjunction with an Option
may be an alternative right wherein the exercise of the Option
terminates the SAR to the extent of the number of shares
purchased upon exercise of the Option and, correspondingly, the
exercise of the SAR terminates the Option to the extent of the
number of Shares with respect to which the SAR is exercised. 
Alternatively, an SAR granted in conjunction with an Option may
be an additional right wherein both the SAR and the Option may
be exercised.  An SAR may not be granted in conjunction with an
ISO under circumstances in which the exercise
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of the SAR affects the right to exercise the ISO or vice versa,
unless the SAR, by its terms, meets all of the following
requirements:

     (1)  The SAR will expire no later than the ISO;

     (2)  The SAR may be for no more than the difference
     between the Exercise Price of the ISO and the Market Value
     of the Shares subject to the ISO at the time the SAR is
     exercised;

     (3)  The SAR is transferable only when the ISO is
     transferable, and under the same conditions;

     (4)  The SAR may be exercised only when the ISO may be
     exercised; and

     (5)  The SAR may be exercised only when the Market Value
     of the Shares subject to the ISO exceeds the Exercise
     Price of the ISO.

     (b)  Exercise Price.  The Exercise Price as to any
particular SAR shall not be less than the Market Value of the
Optioned Shares on the date of grant.

     (c)  Timing of Exercise.  Any election by a Participant
to exercise SARs shall be made during the period beginning on
the 3rd business day following the release for publication of
quarterly or annual financial information and ending on the 12th
business day following such date.  This condition shall be
deemed to be satisfied when the specified financial data is
first made publicly available.  In no event, however, may an SAR
be exercised within the six-month period following the date of
its grant.

     The provisions of Paragraph 8(c) regarding the period of
exercisability of Options is incorporated by reference herein,
and shall determine the period of exercisability of SARs.

     (d)  Exercise of SARs.  An SAR granted hereunder shall be
exercisable at such times and under such conditions as shall be
permissible under the terms of the Plan and of the Agreement
granted to a Participant, provided that an SAR may not be
exercised for a fractional Share.  Upon exercise of an SAR, the
Participant shall be entitled to receive, without payment to the
Company except for applicable withholding taxes, an amount equal
to the excess of (or, in the discretion of the Committee if
provided in the Agreement, a portion of) the excess of the then
aggregate Market Value of the number of Optioned Shares with
respect to which the Participant exercises the SAR, over the
aggregate Exercise Price of such number of Optioned Shares. 
This amount shall be payable by the Company, in the discretion
of the Committee, in cash or in Shares valued at the then Market
Value thereof, or any combination thereof.
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     (e)  Procedure for Exercising SARs.  To the extent not
inconsistent herewith, the provisions of Paragraph 8(b) as to
the procedure for exercising Options are incorporated by
reference, and shall determine the procedure for exercising
SARs. 
 
     11.  CHANGE IN CONTROL

     (a)  General Rule.  Notwithstanding the provisions of any
Award which provides for its exercise or vesting in
installments, for a period of 60 days beginning on the date of a
Change in Control, all Options and SARs shall be immediately
exercisable and fully vested.  With respect to Options, at the
time of a Change in Control, the Participant shall, at the
discretion of the Committee, be entitled to receive cash in an
amount equal to the excess of the Market Value of the Common
Stock subject to such Option over the Exercise Price of such
Shares, in exchange for the cancellation of such Options by the
Participant. 

     (b)  Exception to General Rule.  Notwithstanding
subparagraph (a) of this Paragraph, in no event may an SAR be
exercised, or an Option be canceled in exchange for cash, within
the six-month period following the date of its grant. 

     12.  EFFECT OF CHANGES IN COMMON STOCK SUBJECT TO THE
PLAN.

     (a)  Recapitalizations; Stock Splits, Etc.  The number
and kind of shares reserved for issuance under the Plan, and the
number and kind of shares subject to outstanding Awards (and the
Exercise Price thereof in the case of Options and SARs), shall
be proportionately adjusted for any increase, decrease, change
or exchange of Shares for a different number or kind of shares
or other securities of the Company which results from a merger,
consolidation, recapitalization, reorganization, reclassifi-
cation, stock dividend, split-up, combination of shares, or
similar event in which the number or kind of shares is changed
without the receipt or payment of consideration by the Company.

     (b)  Transactions in which the Company is Not the
Surviving Entity.  Subject to Paragraph 11 hereof, in the event
of (i) the liquidation or dissolution of the Company, (ii) a
merger or consolidation in which the Company is not the
surviving entity, or (iii) the sale or disposition of all or
substantially all of the Company's assets (any of the foregoing
to be referred to herein as a "Transaction"), all outstanding
Awards shall be surrendered.  With respect to each Award so
surrendered, the Committee shall in its sole and absolute
discretion determine whether the holder of the surrendered Award
shall receive --

     (1)  for each Share then subject to an outstanding Award
     the number and kind of shares into which each outstanding
     Share (other than Shares held by dissenting stockholders)
     is changed or exchanged, together with an appropriate
     adjustment to the Exercise Price in the case of Options
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     (2)  a cash payment (from the Company or the successor
     corporation), in an amount equal to the Market Value of
     the Shares subject to the Award on the date of the
     Transaction, less the Exercise Price of the Award in the
     case of Options and SARs. 

     (c)  Special Rule for ISOs.  Any adjustment made pursuant
to subparagraphs (a) or (b)(1) hereof shall be made in such a
manner as not to constitute a modification, within the meaning
of Section 424(h) of the Code, of outstanding ISOs.

     (d)  Conditions and Restrictions on New, Additional, or
Different Shares or Securities.  If, by reason of any adjustment
made pursuant to this Paragraph, a Participant becomes entitled
to new, additional, or different shares of stock or securities,
such new, additional, or different shares of stock or securities
shall thereupon be subject to all of the conditions and
restrictions which were applicable to the Shares pursuant to the
Award before the adjustment was made.

     (e)  Other Issuances.  Except as expressly provided in
this Paragraph, the issuance by the Company or an Affiliate of
shares of stock of any class, or of securities convertible into
Shares or stock of another class, for cash or property or for
labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, shall not affect,
and no adjustment shall be made with respect to, the number,
class, or Exercise Price of Shares then subject to Awards or
reserved for issuance under the Plan.

     13.  NON-TRANSFERABILITY OF AWARDS.  

     Awards may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or
by the laws of descent and distribution.  Notwithstanding the
foregoing, or any other provision of this Plan, a Participant
who holds Awards may transfer such Awards (but not ISOs) to his
or her spouse, lineal ascendants, lineal descendants, or to a
duly established trust for the benefit of one or more of these
individuals.  Awards so transferred may thereafter be
transferred only to the Participant who originally received the
grant or to an individual or trust to whom the Participant could
have initially transferred the Awards pursuant to this Paragraph
Awards which are transferred pursuant to this Paragraph shall be
exercisable by the transferee according to the same terms and
conditions as applied to the Participant.

     14.  TIME OF GRANTING AWARDS.  

     The date of grant of an Award shall, for all purposes, be
the later of the date on which the Committee makes the deter-
mination of granting such Award, and the Effective Date.  Notice
of the determination shall be given to each Participant to whom
an Award
<PAGE>
<PAGE>
is so granted within a reasonable time after the date
of such grant.

     15.  EFFECTIVE DATE.  

     The Plan shall become effective immediately upon its
approval by all regulatory agencies required by applicable law
and a favorable vote of stockholders owning at least a majority
of the Shares present or represented, and entitled to vote, at a
meeting duly held in accordance with applicable laws, provided
that the Plan shall not be submitted for such approval before
the first annual meeting of the Company's stockholders.  No
Awards may be made prior to approval of the Plan by the
stockholders of the Company.

     16.  MODIFICATION OF AWARDS.  

     At any time, and from time to time, the Board may autho-
rize the Committee to direct execution of an instrument
providing for the modification of any outstanding Award,
provided no such modification shall confer on the holder of said
Award any right or benefit which could not be conferred on him
by the grant of a new Award at such time, or impair the Award
without the consent of the holder of the Award.

     17.  AMENDMENT AND TERMINATION OF THE PLAN.  

     The Board may from time to time amend the terms of the
Plan and, with respect to any Shares at the time not subject to
Awards, suspend or terminate the Plan.

     No amendment, suspension or termination of the Plan shall,
without the consent of any affected holders of an Award, alter
or impair any rights or obligations under any Award theretofore
granted.  

     18.  CONDITIONS UPON ISSUANCE OF SHARES.  

     (a)  Compliance with Securities Laws.  Shares of Common
Stock shall not be issued with respect to any Award unless the
issuance and delivery of such Shares shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law, and
the requirements of any stock exchange upon which the Shares may
then be listed.  The Plan is intended to comply with Rule 16b-3,
and any provision of the Plan which the Committee determines in
its sole and absolute discretion to be inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative
and null and void, and shall not affect the validity of the
remaining provisions of the Plan.

<PAGE>
<PAGE>
     (b)  Special Circumstances.  The inability of the Company
to obtain approval from any regulatory body or authority deemed
by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder shall relieve the Company of
any liability in respect of the non-issuance or sale of such
Shares.  As a condition to the exercise of an Option or SAR, the
Company may require the person exercising the Option or SAR to
make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration
requirements of federal or state securities law.

     (c)  Committee Discretion.  The Committee shall have the
discretionary authority to impose in Agreements such
restrictions on Shares as it may deem appropriate or desirable,
including but not limited to the authority to impose a right of
first refusal, or to establish repurchase rights, or both of
these restrictions.

     19.  RESERVATION OF SHARES.  

     The Company, during the term of the Plan, will reserve and
keep available a number of Shares sufficient to satisfy the
requirements of the Plan.

     20.  WITHHOLDING TAX.

     The Company's obligation to deliver Shares upon exercise
of Options and/or SARs shall be subject to the Participant's
satisfaction of all applicable federal, state and local income
and employment tax withholding obligations.  The Committee, in
its discretion, may permit the Participant to satisfy the
obligation, in whole or in part, by irrevocably electing to have
the Company withhold Shares, or to deliver to the Company Shares
that he already owns, having a value equal to the amount
required to be withheld.  The value of Shares to be withheld, or
delivered to the Company, shall be based on the Market Value of
the Shares on the date the amount of tax to be withheld is to be
determined.  As an alternative, the Company may retain, or sell
without notice, a number of such Shares sufficient to cover the
amount required to be withheld.

     21.  NO EMPLOYMENT OR OTHER RIGHTS.

     In no event shall an Employee's or Director's eligibility
to participate or participation in the Plan create or be deemed
to create any legal or equitable right of the Employee,
Director, or any other party to continue service with the
Company, the Association, or any Affiliate of such corporations. 
Except to the extent provided in Paragraphs 6(b) and 9(a), no
Employee or Director shall have a right to be granted an Award
or, having received an Award, the right to again be granted an
Award.  However, an Employee or Director who has been granted an
Award may, if otherwise eligible, be granted an additional Award
or Awards.
<PAGE>
<PAGE>
     22.  GOVERNING LAW.

     The Plan shall be governed by and construed in accordance
with the laws of the State of Maryland, except to the extent
that federal law shall be deemed to apply.


<PAGE>
<PAGE>
                   TRUST AGREEMENT 
        UNDER THE HARBOR FEDERAL BANCORP, INC.
            STOCK OPTION AND INCENTIVE PLAN


     This Agreement made this 28th day of August, 1995, by
and between Harbor Federal Bancorp, Inc. (the "Company") and
Joseph J. Lacy, John N. Riehl, III, and Gideon N. Stieff, Jr.
(acting by majority, the "Trustee").

     WHEREAS, the Company maintains the Harbor Federal Bancorp,
Inc. Stock Option and Incentive Plan (the "Plan"); and

     WHEREAS, the Company has incurred or expects to incur
liability under the terms of the Plan with respect to the
individuals participating in the Plan ("Participants"); and

     WHEREAS, the Company wishes to establish a trust (the
"Trust") and to contribute to the Trust assets that shall be
held therein, subject to the claims of the Company's general
creditors in the event of Insolvency, as defined in Section 3(a)
hereof, until paid to Participants and their beneficiaries in
such manner and at such times as specified in the Plan; 

     WHEREAS, it is the intention of the parties that this
Trust shall constitute an unfunded arrangement and shall not
affect the status of the Plan as an unfunded plan maintained for
the purpose of providing compensation for a select group of
management or other employees for purposes of Title I of the
Employee Retirement Income Security Act of 1974;

     WHEREAS, it is the intention of the Company to make
contributions to the Trust to provide itself with a source of
funds to assist it in the meeting of its liabilities under the
Plan;


     NOW, THEREFORE, the parties do hereby establish this Trust
and agree that the Trust shall be comprised, held and disposed
of as follows:

     Section 1.  Establishment of Trust
     ----------------------------------

     (a)  The Company hereby deposits, or will from time to
time deposit, with the Trustee in trust an amount expected to be
sufficient to permit the Trust to purchase up to 218,009 shares
of common stock ("Common Stock") of Harbor Federal Bancorp, Inc. 
Said amount shall become the initial principal of the Trust to
be held, administered and disposed of by the Trustee as provided
in this Trust Agreement.

     (b)  The Trust shall be irrevocable.

     (c)  The Trust is intended to be a grantor trust, of
which the Company is the grantor, within the meaning of subpart
E, part I, subchapter J, chapter 1,
<PAGE>
<PAGE>
subtitle A of the Internal Revenue Code of 1986, as amended (the
"Code"), and shall be construed accordingly.

     (d)  The principal of the Trust, and any earnings
thereon, shall be held separate and apart from other funds of
the Company and shall be used exclusively for the uses and
purposes of Participants and general creditors as herein set
forth.  Participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any
assets of the Trust.  Any rights created under the Plan and this
Trust Agreement shall be mere unsecured contractual rights of
Participants and their beneficiaries against the Company.  Any
assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 3(a) herein.

     (e)  The Company, in its sole discretion, may at any
time, or from time to time, make additional deposits of cash or
other property in trust with the Trustee to augment the
principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.  Neither the Trustee nor any
Participant or beneficiary shall have any right to compel such
additional deposits.

     Section 2.  Payments to Plan Participants and Their
     ---------------------------------------------------
Beneficiaries.
-------------

     (a)  The Company shall deliver to the Trustee a schedule
(the "Payment Schedule") that indicates the amounts payable in
respect of each Participant (and his or her beneficiaries), that
provides a formula or other instructions acceptable to the
Trustee for determining the amounts so payable, the form in
which such amount is to be paid (as provided for or available
under the Plan, and including transfers of Common Stock from the
Trust to Participants), and the time of commencement for payment
of such amounts.  Except as otherwise provided herein, the
Trustee shall make payments to Participants and their
beneficiaries in accordance with such Payment Schedule.  The
Trustee shall make provision for the reporting and withholding
of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts
have been reported, withheld and paid by the Company.

     (b)  The entitlement of a Participant or his or her
beneficiaries to benefits under the Plan shall be determined by
the Company or such party as it shall designate under the Plan,
and any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plan.  

     (c)  The Company may make payment of benefits directly to
Participants or their beneficiaries as they become due under the
terms of the Plan.  The Company shall notify the Trustee of its
decision to make payment of benefits directly prior to the time
amounts are payable to Participants or their beneficiaries.  In
addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plan, the Company shall make
the balance of each such payment as it falls due.  The Trustee
shall notify the Company where principal and earnings are not
sufficient.
                             2<PAGE>
<PAGE>
     Section 3.  Trustee Responsibility Regarding Payments to
     --------------------------------------------------------
Trust Beneficiary When Company Is Insolvent.
-------------------------------------------

     (a)  The Trustee shall cease payment of benefits to
Participants and their beneficiaries if the Company is
Insolvent.  The Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company becomes
subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.

     (b)  At all times during the continuance of this Trust,
as provided in Section 1(d) hereof, the principal and income of
the Trust shall be subject to claims of general creditors of the
Company under federal and state law as set forth below.

     (c)  The Board of Directors and the Chief Executive
Officer of the Company shall have the duty to inform the Trustee
in writing of the Company's Insolvency.  If a person claiming to
be a creditor of the Company alleges in writing to the Trustee
that the Company has become Insolvent, the Trustee shall
determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits
to Participants or their beneficiaries.

          (1)  Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or
a person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent.  The Trustee may in all events rely on
such evidence concerning the Company's solvency as may be
furnished to the Trustee and that provides the Trustee with a
reasonable basis for making a determination concerning the
Company's solvency.

          (2)  If at any time the Trustee has determined that
the Company is Insolvent, the Trustee shall discontinue payments
to Plan participants or their beneficiaries, shall liquidate the
Trust's investment in Common Stock, and shall hold the assets of
the Trust for the benefit of the Company's general creditors. 
Nothing in this Trust Agreement shall in any way diminish any
rights of Participants or their beneficiaries as general
creditors of the Company with respect to benefits due under the
Plan or otherwise.

          (3)  The Trustee shall resume the payment of
benefits to Participants or their beneficiaries in accordance
with Section 2 of this Trust Agreement only after the Trustee
has determined that the Company is not Insolvent (or is no
longer Insolvent).

     (d)  Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Participants
or their beneficiaries under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any
payments made to Participants or their beneficiaries by the
Company in lieu of the payments provided for hereunder during
any such period of discontinuance.

                              3<PAGE>
<PAGE>
     Section 4.  Payments to the Company.
     -----------------------------------

     Except as provided in Section 3 hereof, the Company shall
have no right or power to direct the Trustee to return to the
Company or to divert to others any of the Trust assets before
all payment of benefits have been made to Plan Participants and
their beneficiaries pursuant to the terms of the Plan.

     Section 5.  Investment Authority.
     --------------------------------

     (a)  The Trustee shall have sole discretion as to the
investment of Trust assets, except that to the extent reasonably
practicable, the Trustee shall invest all assets of the Trust in
Common Stock; provided that the Trust shall not purchase, in the
aggregate, more than 218,009 shares of Common Stock.

     (b)  All rights associated with assets of the Trust shall
be exercised by the Trustee or the person designated by the
Trustee, and shall in no event be exercisable by or rest with
Participants, except that voting rights with respect to Common
Stock will be exercised in accordance with the terms and
conditions for the exercise of voting rights of unallocated
shares under the Company's Employee stock Ownership Plan, as in
effect on the date hereof.

     (c)  Subject to applicable federal and state securities
laws, if for any reason the Trustee will be selling shares of
Common Stock, the Trustee shall sell such shares by (i) giving
each Participant 20 business days within which to purchase, at
fair market value, all or part of any shares of Common Stock
that the Trustee holds for the benefit of the Participant, and
(ii) to the extent purchases by Participants are insufficient to
eliminate the Trust's excess holdings of Common Stock, to offer
to sell, and to sell, all or any part of the excess shares held
by the Trust to the following purchasers, listed here by order
of priority: first, the Company; second, any benefit plan
maintained by the Company or the Bank; third, directors of the
Bank; forth, officers of the Bank; fifth, members of the general
public (through sales on the open market).

     Section 6. - Disposition of Income.
     ----------------------------------

     During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and
reinvested.

     Section 7.  Accounting by Trustee.
     ---------------------------------

     The Trustee shall keep accurate and detailed records of
all investments, receipts, disbursements, and all other
transactions required to be made, including such specific
records as shall be agreed upon in writing between the Company
and the Trustee.  Within 60 days following the close of each
calendar year and within 20 days after the removal or
resignation of the Trustee, the Trustee shall deliver to the
Company a written account of its administration of the Trust
during such year or during the period from the close of the last
preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all
securities and investments purchased and sold with the cost or
net proceeds of such purchased and sold with the cost or net
proceeds of such purchases or sales (accrued interest paid or
receivable being shown
                             4<PAGE>
<PAGE>
separately), and showing all cash, securities and other property
held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.

     Section 8.  Responsibility of Trustee.
     -------------------------------------

     (a)  The Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that Trustee
shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the
Company which is contemplated by, and in conformity, the terms
of the Plan or this Trust and is given in writing by the
Company.  In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent
jurisdiction to resolve the dispute.

     (b)  If the Trustee undertakes or defends any litigation
arising in connection with this Trust, the Company agrees to
indemnify the Trustee against Trustee's costs, expenses and
liabilities (including, without limitation, attorneys' fees and
expenses) relating thereto and to be primarily liable for such
payments, except in those cases where the Trustee shall have
been found by a court of competent jurisdiction to have acted
with gross negligence or willful misconduct.  If the Company
does not pay such costs, expenses and liabilities in a
reasonably timely manner, the Trustee may obtain payment from
the Trust.

     (c)  The Trustee may consult with legal counsel with
respect to any of its duties or obligations hereunder.

     (d)  The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder.

     (e)  The Trustee shall have, without exclusion, all
powers conferred on trustees by applicable law, unless expressly
provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, the Trustee
shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from
conversion of the policy to a different form) other than to a
successor the Trustee, or to loan to any person the proceeds of
any borrowing against such policy.

     (f)  Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or to applicable law, the
Trustee shall not have any power that could give this Trust the
objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to
the Code.
<PAGE>
     Section 9.  Compensation and Expenses of Trustee.
     ------------------------------------------------

     The Company shall pay all administrative expenses and the
Trustee's fees and expenses relating to the Plan and this Trust. 
If not so paid, the fees and expenses shall be paid from the
Trust.
                            5<PAGE>
<PAGE>
     Section 10.  Resignation and Removal of Trustee.
     -----------------------------------------------

     The Trustee may resign at any time by written notice to
the Company, which resignation shall be effective 30 days after
the Company receives such notice (unless the Company and the
Trustee agree otherwise).  The Trustee may be removed by the
Company on 30 days notice or upon shorter notice accepted by the
Trustee.

     If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the
effective date or resignation or removal under this section.  If
no such appointment has been made, the Trustee may apply to a
court of competent jurisdiction for appointment of a successor
or for instructions.  All expenses of the Trustee in connection
with the proceeding shall be allowed as administrative expenses
of the Trust.  Upon resignation or removal of the Trustee and
appointment of a successor trustee, all assets shall
subsequently be transferred to the successor trustee.  The
transfer shall be completed within 60 days after receipt of
notice of resignation, removal or transfer, unless the Company
extends the time limit.

     Section 11.  Appointment of Successor.
     -------------------------------------

     If the Trustee resigns or is removed in accordance with
Section 10 hereof, the Company may appoint any other party as a
successor to replace the Trustee upon resignation or removal. 
The appointment shall be effective when accepted in writing by
the new trustee, who shall have all of the rights and powers of
the former trustee, including ownership rights in the Trust
assets.  The former trustee shall execute any instrument
necessary or reasonably requested by the Company or the
successor trustee to evidence the transfer.

     A successor trustee need not examine the records and acts
of any prior trustee and may retain or dispose of existing Trust
assets, subject to Sections 7 and 8 hereof.  The successor
trustee shall not be responsible for, and the Company shall
indemnify and defend the successor trustee from, any claim or
liability resulting from any action or inaction of any prior
trustee or from any other past event, or any condition existing
at the time it becomes successor trustee.

     Section 12.  Amendment or Termination.
     -------------------------------------

     (a)  This Trust Agreement may be amended by a written
instrument executed by the Trustee and the Company, provided
that no such amendment shall make the Trust revocable.

     (b)  The Trust shall not terminate until the date on
which no Participant or his or her beneficiaries is entitled to
benefits pursuant to the terms hereof.  Upon termination of the
Trust, the Trustee shall return any assets remaining in the
Trust to the Company.

     (c)  Upon written approval of all Participants (or their
beneficiaries if they are then entitled to payment of benefits),
the Company may terminate this Trust prior to the time all
benefit payments under the Plan have been made.  All assets in
the Trust at termination shall be returned to the Company.
<PAGE>
<PAGE>
     Section 13.  Miscellaneous.
     --------------------------

     (a)  Any provision of this Trust Agreement prohibited by
law shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.

     (b)  Benefits payable to Participants and their
beneficiaries under this Trust Agreement may not be anticipated,
assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process, except pursuant
to the terms of the Plan.

     (c)  This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland,
to the extent not preempted by federal law.

     (d)  The Trustee agrees to be bound by the terms of the
Plan, as in effect from time to time.

     (e)  The Trustee shall act by vote or written consent of a
majority of its then duly-appointed members.

     Section 14.  Effective Date.
     ---------------------------

     The effective date of this Trust shall be the date of
execution designated below.

     IN WITNESS WHEREOF, the Company, by its duly authorized
officer, has caused this Agreement to be executed, and its
corporate seal affixed, and the undersigned Trustees have
executed this Agreement, this 28th day of January, 1995.


ATTEST:                       HARBOR FEDERAL BANCORP, INC.


/s/ Dawn  Smith               By /s/ Robert A. Williams
-------------------------        ----------------------------
                                 Its President

ATTEST:


/s/ Dawn Smith                   /s/ Joseph L. Lacy, Trustee     
-------------------------        ------------------------------
                                 Joseph J. Lacy, Trustee


/s/ Dawn Smith                   /s/ John N. Riehl, Trustee
-------------------------        ------------------------------
                                 John N. Riehl, III, Trustee
                                                       

/s/ Dawn Smith                   /s/ Gideon N. Stieff, Jr.
-------------------------        ------------------------------
                                 Gideon N. Stieff, Jr., Trustee
<PAGE>
<PAGE>                           
             HARBOR FEDERAL BANCORP, INC. 
         1995 STOCK OPTION AND INCENTIVE PLAN

         ____________________________________

           1998 Amendment to Trust Agreement
         ____________________________________


     WHEREAS, Harbor Federal Bancorp, Inc. (the "Company")
maintains the Harbor Federal Bancorp, Inc. 1995 Stock Option and
Incentive Plan (the "Option Plan"); and

     WHEREAS, the Company has previously entered into a trust 
agreement under the Option Plan ("Trust Agreement") with Messrs.
Joseph J. Lacy, John N. Riehl III, and Gideon N. Stieff, Jr.
(acting by majority, the "Trustee"); and

     WHEREAS, the Company's Board of Directors and the Trustee
have determined that it is in their respective best interests to
amend the Trust Agreement in the manner set forth herein.

     NOW, THEREFORE, effective March 30, 1998, the Trust
Agreement shall be amended as follows,  pursuant  to Section 12 
thereof:

     1.    Section 2 of the Trust Agreement shall be amended
by adding subsection (d) immediately at the end thereof to
provide as follows:

          (d)  Upon a Change in Control within the meaning of
     the Plan, the Company shall, as soon as possible but in no
     event longer than ten business days after the Change in
     Control, make an irrevocable contribution to this Trust in
     an amount that is projected to provide the Trust with
     sufficient funds to pay each Beneficiary the benefits to
     which he or she is entitled pursuant to the Plan as in
     effect on the date of the Change in Control.

     2.    Section 10 of the Trust Agreement shall be amended
by adding the following paragraph immediately at the end
thereof:

          Notwithstanding the foregoing, if the Trustee
     resigns or is removed following a Change in Control, the
     Trustee that has resigned or is being removed shall
     appoint as its successor a third party financial
     institution that has trust powers, is independent of and
     unrelated to the entity that has acquired or otherwise
     obtained control of the Company, and is agreed to in
     writing by 80% of the Trust Beneficiaries.
<PAGE>
<PAGE>
1998 Amendment to
1995 Stock Option and Incentive Plan
Trust Agreement
Page 2
     3.   Nothing contained herein shall be held to alter,
vary, or affect any of the terms, provisions, or conditions of
the Trust Agreement other than stated above.

     WHEREFORE, the undersigned hereby execute this 1998
Amendment to the Trust Agreement on March 30, 1998.  



                              HARBOR FEDERAL BANCORP, INC.
Witnessed by:


/s/ Dana Miller               By /s/ Robert A. Williams
-----------------------          ---------------------------
                                 Its  Chairman of the Board   
               



                              TRUSTEES
Witnessed by:

/s/ Barbara Therres           /s/ Joseph J. Lacy
---------------------         ---------------------------
                              Joseph J. Lacy   


                                                                 
/s/ Barbara Therres           /s/ John N. Riehl, III
---------------------         ---------------------------
                               John N. Riehl III  



/s/ Barbara Therres           /s/ Gideon N. Stieff, Jr.
---------------------         --------------------------
                              Gideon N. Stieff, Jr.