<PAGE>

                              EMPLOYMENT AGREEMENT

        THIS AGREEMENT, made effective as of the 15th day of April, 1987 by and
between First Savings and Loan Association of Penns Grove, a savings and loan
association incorporated under the laws of the United States (the
"Association"), and Duff P. O'Connor (the "Executive").

                                   WITNESSETH:

        WHEREAS, the Executive is employed with the Association on a full time
basis;

        WHEREAS, the Association is converting to a state chartered stock
savings and loan association and desires to assure that the Executive remains in
its employ after such conversion; and

        WHEREAS, the Association is willing to employ the Executive and the
Executive is willing to accept employment on the terms and conditions set forth
in this Agreement; 

        NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:

        1. Employment

        The Association hereby employs the Executive, and the Executive hereby
accepts such employment and agrees to remain in the employ of the Association,
for the period stated in paragraph 3 below and upon the other terms and
conditions herein provided.
<PAGE>

        2. Position and Duties

           During the Employment Period (as defined in Section 3(a)), the
Executive agrees to serve as Senior Vice President, Lending Operations of the
Association and shall perform such managerial duties and responsibilities for
the Association as the Board of Directors of the Association or any superior
officer may direct in accordance with the by-laws of the Association, which
duties and responsibilities shall be of substantially the same character as or
equivalent character to those required by Executive's position on the Effective
Date (as defined in Section 3(a)). Throughout the Employment Period, and except
for illness, vacation periods and leaves of absence granted by the Association
(if any), the Executive shall devote all his business time, attention, skill and
efforts to the faithful performance of his duties hereunder, and, subject to
Section 7(g)(1), accept such office or offices to which he may be elected by the
Board of Directors of the Association.

        3. Term

           (a) Period of Employment

               The period of the Executive's employment under this Agreement
shall commence as of the date of the conversion of the Association from a mutual
to stock form (the "Effective Date") and shall, unless sooner terminated by the
death of the Executive, mutual agreement or pursuant to Section 7, continue for

                                      -2-
<PAGE>

a period of one (1) year therefrom, (such period being herein referred to as the
"Employment Period"), provided, however, subject to Section 3(b), and if the
Employment Period has not been terminated by the death of the Executive, by
mutual agreement or pursuant to Section 7, that on each December 31 during the
Employment Period, the Employment Period shall be extended for one year, so that
at all times the Employment Period on each January 1 during the term of this
Agreement shall be an unexpired period of one (1) year. The last day of the
Employment Period, as from time to time extended, and without regard to any
early termination pursuant to Section 7, is hereinafter referred to as the
"Expiration Date."

           (b) Termination of Automatic Extension

               The Executive or Association may elect to terminate the automatic
extension of the Employment Period set forth in subsection 3(a) by giving
written notice of such election. Any notice given hereunder shall be effective
in the year in which the notice is given, if given between January 1 and June 30
of any calendar year, and in the year following the year in which the notice is
given, if given between July 1 and December 31 of any calendar year. Upon
effectiveness of any notice given hereunder, Executive's employment under this
Agreement shall terminate on the Expiration Date (as last extended) or such
earlier date as may be determined pursuant to Section 7.




                                       -3-
<PAGE>

        4. Compensation

           (a) Salary and Incentive Compensation

               For all services rendered by the Executive in any capacity
during the Employment Period under this Agreement, the Executive shall be paid
as compensation (i) an annual salary of $48,000, or such higher salary as may be
negotiated from time to time by the Association and the Executive plus (ii) such
incentive compensation or bonus as may be awarded to the Executive from time to
time by the Board of Directors. Such salary shall be payable in 52 equal weekly
installments and any such incentive compensation or bonus shall be payable in
the manner and at the time specified by the Board of Directors.

           (b) Reimbursement of Expenses

               The Association shall pay or reimburse the Executive, in
accordance with the Association's policies and requirements, for all reasonable
travel and other expenses incurred by the Executive in performing his
obligations under this Agreement. The Executive shall be provided, at his
option, with an automobile expense allowance, or the use of a recent model
automobile which will be owned by the Association, as may be mutually agreed
upon by the Executive and the Association. All reasonable business related
expenses associated therewith shall be borne by the Association.



                                       -4-
<PAGE>

        5. Participation in Incentive Compensation and Benefit Plans

           In addition to the payments provided under this Agreement, the
Executive (or his beneficiary) may be, or may become, entitled to benefits under
any executive or contingent compensation plan, stock option, restricted stock or
stock purchase plan, retirement income or pension plan, supplemental or excess
benefit plan, group hospitalization, health care, or sick leave plan, life or
other insurance or death benefit plan, travel and accident insurance, vacation
plan, or other present or future group employee benefit plan or program of the
Association for which Executive employees of the Association generally are
eligible, and the Executive shall be eligible to receive, with respect to the
Employment Period, all benefits and emoluments for which he is eligible under
any such benefit plan or program of the Association in accordance with the
provisions and requirements of any such plan or program.

        6. Vacation and Sick Leave

           Executive shall be entitled to be compensated for annual vacation,
personal and sick leave in accordance with established Association policy.

                                      -5-
<PAGE>

        7. Termination or Suspension of Employment

           (a) Termination without Cause

                 Notwithstanding anything to the contrary contained in this
Agreement, subject to Executive receiving the compensation set forth in
subsection (i) of this Section 7, the Association's Board of Directors may
terminate the Executive's employment under this Agreement at any time.
Termination of Executive's employment under this subsection shall be deemed a
breach of this Agreement by the Association.

           (b) Termination with Cause

               The Association's Board of Directors may terminate the
Executive's employment under this Agreement at any time for cause. The Executive
shall have no right to receive compensation or other benefits for any period
after termination for cause. The term "for cause" shall include the Executive's
personal dishonesty, incompetency, 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. If the Association's Board of Directors determines
that Executive's employment under this Agreement shall be terminated for cause,



                                       -6-
<PAGE>

then the Board shall forthwith provide Executive with a written notice of said
determination. The notice shall contain a detailed statement of the facts which
constitute the particulars of the cause for termination. As used herein, the
term incompetency shall mean the determination by a court that the Executive is
unable to manage his own affairs by reason of insanity, imbecility or feeble
mindedness.

           (c) Suspension Pursuant to Notice

               If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Association's affairs by a notice served by
the Federal Home Loan Bank Board ("FHLBB") or the Federal Savings and Loan
Insurance Corporation ("FSLIC") under Section 5(d)(4)(C) or Section 5(d)(5)(A)
of the Home Owners' Loan Act (12 U.S.C. 1464(d)(4)(C) and (5)(d)(A)) or under
Section 407(g)(3) or Section 407(h) of the National Housing Act (12 U.S.C. 1730
(g)(3) and (h), the Association'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 Association may in its
discretion (i) pay the Executive all or part of the compensation withheld while
the Association's obligations under this Agreement were suspended and (ii)
reinstate (in whole or in part) any of the Association's obligations under this
Agreement which were suspended.



                                       -7-
<PAGE>

           (d) Termination Pursuant to Order

               If the Executive is removed and/or permanently prohibited from
participating in the conduct of the Association's affairs by an order of the
FHLBB or FSLIC issued under Section 5(d)(4)(D) or Section 5(d)(5)(A) of the Home
Owners' Loan Act (12 U.S.C. 1464(d)(4)(D) and (d)(5)(A)) or under Section
407(g)(3) or Section 407(h) of the National Housing Act (12 U.S.C. 1730(g)(3)
and (h)), all obligations of the Association under this Agreement shall
terminate as of the effective date of the order, but vested rights of the
Association and Executive shall not be affected.

           (e) Termination Upon Default Under National Housing Act

               If the Association is in default (as defined in Section 401(d) of
the National Housing Act), all obligations under this Agreement shall terminate
as of the date of default, but this subsection shall not affect any vested
rights of the Association and Executive.

           (f) Termination by FSLIC and FHLBB

               All obligations under this Agreement shall be terminated, except
to the extent determined that continuation of this Agreement is necessary for
the continued operation of the institution, (i) by FSLIC at the time FSLIC
enters into an agreement to provide assistance to or on behalf of the

                                      -8-
<PAGE>

Association under the authority contained in Section 406 (f) of the National
Housing Act; or (ii) by the FHLBB at the time the FHLBB or its Principal
Supervisory Agent (as defined in 12 C.F.R. Section 561.35) approves a
supervisory merger to resolve problems related to operation of the Association
or when the Association is determined by the FHLBB to be in an unsafe and
unsound condition. Any rights of the Association or Executive that have already
vested, however, shall not be affected by such action.

           (g) Termination by Executive for Good Reason

               The Executive shall be entitled to terminate his employment
hereunder for good reason. Any termination of employment hereunder under any of
the following circumstances shall be for good reason, the occurrence of any of
which shall be deemed a breach of this Agreement by the Association:


               (1) without the express written consent of the Executive, the
Executive is assigned any duties inconsistent with his positions, duties,
responsibilities and status with the Association as in effect on the Effective
Date, or his titles as in effect on the Effective Date are changed or the
Executive is removed or not re-elected to any of such positions, except in
connection with the termination of the Executive's employment pursuant to
subsections (b),(c), (d),(e) or (f) of Section 7 of this Agreement, or as a
result of his substantial disability or death;

                                       -9-
<PAGE>

               (2) the salary of the Executive set forth in Section 4, as the
same hereafter may be increased from time to time, is reduced;

               (3) the Association fails to continue for the Executive any
benefit or compensation plan providing the Executive with substantially similar
benefits to those plans in which the Executive is participating at the Effective
Date or in which the Executive hereafter may participate; or

               (4) the Association shall fail to observe or perform any
convenant or agreement in this Agreement to be observed or performed by the
Association;

               (5) a change in control (as defined below) of the Association
occurs.

               For the purposes of this Agreement, a "change in control of the
Association" shall mean a change in control whether by stock transfer, sale of
assets, merger, consolidation or otherwise; provided that, without limitation,
such a change of control shall be deemed to have occurred if (1) any person (as
such term is used in 12 C.F.R. Section 5563.18-2(b)(1)), other than those
persons in control of Association on the date hereof, acquires the power,
directly or indirectly, to direct the management or policies of the Association
or to vote 25% or more of any class of voting securities of the Association; or
(2) within




                                      -10-
<PAGE>

any period of three consecutive years during the term of this Agreement,
individuals who at the beginning of such period constitute the Board of
Directors of the Association cease for any reason to constitute at least a
majority thereof.

           (h) Termination by Executive Other Than for Good Cause

               Notwithstanding anything contained herein to the contrary, the
Executive may terminate this Agreement by notice (which shall in no event be
less than 6 months) to the Association on or after the date that the Executive
first becomes eligible to receive benefits under the Association's defined
benefit pension plan in which case benefits shall be payable to the Executive in
accordance with the provisions of such pension plan and all rights of the
Executive under this Agreement shall cease.

           (i) Remedies for Termination

               Upon termination of the Executive's employment under this
Agreement pursuant to subsections (a) or (g) of this Section 7, the Executive
shall receive until the Expiration Date:

               (1) 200% of the salary set forth in Section 4, as the same may
have been increased from time to time, payment of which shall be at the time
provided for in this Agreement as if the Executive's employment under this
Agreement has not terminated.

                                      -11-
<PAGE>

               (2) annually, an amount equal to the average of the three highest
annual incentive compensation payments made to Executive by the Association
prior to the termination pursuant to subsection (a) or the event given Executive
the right to terminate his employment under subsection (g); and

               (3) medical care, pension and similar benefits, at no cost to
Executive, substantially comparable to those furnished to Executive by the
Association immediately prior to termination of employment hereunder.

               (4) upon termination without Cause or termination for "good
reason" following a "change in control", the Association shall determine the
aggregate present value (pursuant to Section 1274(b)(2) of the Internal Revenue
Code) of all amounts payable hereunder, and of all other amounts payable to the
Executive upon or by reason of his termination which are determined in good
faith by the Association to be "parachute payments", (as defined in Section
280G(b)(2) of the Code and the regulations promulgated thereunder) made pursuant
to agreements or plans which are subject to Section 280G. The Association's
determination of present value and of other amounts constituting "parachute
payments" is binding; provided that if Executive obtains an opinion of counsel
satisfactory to the Association or an Internal Revenue Service ruling to the



                                      -12-
<PAGE>

effect that the method of determining present value was improper or that
specified payments did not constitute "parachute payments", calculations will be
made in accordance with such opinion or ruling. In the event that aggregate
present value of all benefits under this Agreement and other "parachute
payments" is equal to or in excess of 300% of the Executive's "base amount" as
defined in Section 280G(b)(3)(A) and regulations thereunder, the Executive
waives the right to "parachute payments" sufficient to reduce the present value
of all such payments below 300% of the "base amount". The Executive shall have
the right to designate those benefits which shall be waived or reduced in order
to comply with this provision, but failing designation by the Executive, the
Association may designate those benefits which must be waived or reduced.

               (5) If it is established pursuant to a final determination of a
court of competent jurisdiction or an Internal Revenue Service proceeding that,
notwithstanding the good faith of the Executive and the Association in applying
the terms of this Section 7, the aggregate "parachute payments" paid to or for
the Executive's benefit are in an amount that would result in any portion of
such "parachute payments" not being deductible by the Association or an
Affiliate by reason of Section 280G of the Code, then the Executive shall have
an obligation to pay the Association upon demand an amount equal to the sum of




                                      -13-
<PAGE>

(i) the excess of the aggregate "parachute payments" paid to or for the
Executive's benefit without any portion of such "parachute payments" not being
deductible by reason of Section 280G of the Code and (ii) interest on the amount
set forth in clause (i) above at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of the Executive's receipt of such
excess until the date of such payment.

           Any payment made by Association under this Section shall be deemed to
constitute liquidated damages and not a penalty for the Association's breach of
this Agreement. Executive shall not be required to mitigate his damages
hereunder by seeking employment or otherwise.

           (j) Disability Termination

               In the event that the Executive is totally disabled prior to the
Expiration Date of this Agreement, the Association shall have the right to
terminate Executive's employment on ten (10) days written notice to Executive,
provided the Association shall pay the Executive a disability benefit which is
equal to the salary provided in Section 4, as the same may have been increased
from time to time, received by Executive at the commencement of the Executive's
total disability, reduced by the sum of (i) the amount of any benefits to which
the Executive may be entitled with respect to the same period under any



                                      -14-
<PAGE>

disability plan or pension plan, including related supplemental and excess
benefit plans or agreements, of the Association and (ii) the disability benefits
payable under any government regulated plan including workers' compensation
benefits. Payment of such disability benefit shall commence with the week
coincident with the termination of Executive's employment under this Agreement
and shall continue until the earlier of the Expiration Date or the Executive's
death. During any period the Executive shall be entitled to receive disability
payments from the Association, to the extent that he is physically and mentally
able to do so, he shall furnish information and assistance to the Association,
and, in addition, upon reasonable request in writing from time to he shall make
himself available to the Association to undertake reasonable assignments with
the dignity, importance, and scope of his prior position and his physical and
mental health. As used in this Agreement, the term "total disability" shall mean
the complete inability of the Executive to perform all of his duties under this
Agreement as determined by an independent physician selected with the approval
of the Board of Directors and the Executive.

        8. Withholding of Taxes

           The Association may withhold from any payments under this Agreement
all applicable taxes, as shall be required pursuant to any law or governmental
regulation or ruling.

                                      -15-
<PAGE>

        9. Prior Agreements

           This Agreement constitutes the entire agreement and understanding
between the parties with respect to the subject matter hereof, supersedes all
prior and contemporaneous agreements and understandings and any prior employment
agreement between the Association and the Executive.

       10. Consolidation or Merger

           Nothing in this Agreement shall preclude the Association from
consolidating or merging into or with, or transferring all or substantially all
of its assets to, any Person which assumes this Agreement and all obligations of
the Association hereunder. Upon such a consolidation, merger or transfer of
assets and assumption, the term, "Association" shall refer to such other Person
and this Agreement shall continue in full force and effect.

       11. General Provisions

           (a) Non-Assignability

               Neither this Agreement nor any right or interest hereunder shall
be assignable by the Executive without the Association's prior written consent;
provided, however, that nothing in this subparagraph 11(a) shall preclude the
executors, administrators, or other legal representatives of the estate of the
Executive from assigning any rights hereunder to the Person or



                                      -16-
<PAGE>

Persons entitled thereto under the Executive's will or, in case of intestacy, to
the Person or Persons entitled thereto under the laws of intestacy applicable
to the Executive's estate.

           (b) No Attachment

               Except as otherwise required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.

           (c) Binding Agreement

               This Agreement shall be binding upon and inure to the benefit of
the Executive and the Association, the Executive's heirs, executors and assigns
and the Association's successors and assigns.

           (d) "Person" Defined

               "Person" as used herein means a natural person, joint venture,
corporation, sole proprietorship, trust, estate, partnership, cooperative,
association, organization, government or governmental entity, or other entity.

       12. Legal Expenses

           The Association shall pay to the Executive all reasonable legal fees
and expenses incurred by the Executive in seeking to obtain or enforce any right
or benefit provided by this Agreement.



                                      -17-
<PAGE>

       13. Amendment

           No amendment or modification of this Agreement shall be deemed
effective unless and until executed in writing.

       14. Severability

           If for any reason any provision of this Agreement shall be held
invalid, such invalidity shall not affect any other provision of this Agreement
not held so invalid, and all other such provisions shall to the full extent
consistent with law continue in full force and effect. If any such provision
shall be held invalid in part, such invalidity shall in no way affect the rest
of such provision not held so invalid, and the rest of such provision, together
with all other provisions of this Agreement, shall likewise to the full extent
consistent with law continue in full force and effect.

       15. Headings

           The headings are included solely for convenience of reference and
shall not control the meaning or interpretation of any of the provisions of this
Agreement.

       16. Interpretation

           If any provision of this Agreement shall be the subject of a dispute
between the Association and the Executive and a court or arbitrator to which



                                      -18-
<PAGE>

such dispute has been brought shall be unable to resolve which of two reasonable
interpretations of such provision is the proper interpretation thereof, then the
interpretation most favorable to the Executive shall control.

       17. Governing Law

           This Agreement has been executed and delivered in the State of New
Jersey and its validity, interpretation, performance and enforcement shall be
governed by and construed in accordance with the laws thereof applicable to
contracts executed and to be wholly performed in New Jersey.

       18. Consent to Jurisdiction

           Executive and the Association irrevocable consent to the exclusive
jurisdiction of the Courts of Salem County, New Jersey and/or the United States
District Court for the District of New Jersey in any action or proceeding
pursuant to this Agreement and agree to service of process in accordance with
Section 17 herein.

       19. Notices

           All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by
hand or mailed, certified or registered mail, return receipt requested, with
postage prepaid, to the following addresses or to such other address as either
party may designate by like notice:



                                      -19-
<PAGE>

                 A. If to Executive, to:

                          Duff P. O'Connor
                          Cedar Crest Drive
                          Carneys Point, NJ 08069

                 B. If to Association, to:

                          First Savings and Loan Association
                             of Penns Grove
                          125 South Broadway
                          Pennsville, NJ 08070

                 C. In all cases, copies to:

                          Blank, Rome, Comisky & McCauley
                          1200 Four Penn Center Plaza
                          Philadelphia, PA 19103
                          Attn: Barry H. Genkin, Esquire

                 D.

and to such other or additional Person or Persons as either party shall have
designated to the other party in writing by like notice.

       20. Reimbursement of Expenses

           In the event the Association or any party other than the Executive
asserts that this Agreement, in whole or in part, is unenforceable or invalid,
than the Association shall reimburse Executive for any costs and expenses
including, without limitation, legal fees, incurred by Executive in enforcing
this Agreement or defending its validity. 

           IN WITNESS WHEREOF, the Association has caused this Agreement to be
executed and its seal to be affixed hereto by

                                      -20-
<PAGE>

its officers thereunto duly authorized, and the Executive has signed and sealed
this Agreement, all as of the day and year first above written.

ATTEST:                     FIRST SAVINGS AND LOAN ASSOCIATION
                               OF PENNS GROVE



/s/ Joyce A. Hunt           By: /s/ Stephen D. Miller
-----------------------        ------------------------------------
              Secretary        Stephen D. Miller,
                               President




WITNESS:

                                                         
/s/ Elizabeth J. Homen         /s/ Duff P. O'Connor
----------------------         -------------------------------------
    Elizabeth J. Homen             Duff P. O'Connor














                                      -21-
<PAGE>

                        AMENDMENT TO EMPLOYMENT AGREEMENT

         This Amendment, dated 27th day of March, 1992, by and between First
Home Savings Bank, S.L.A., a savings and loan association incorporated under
laws of New Jersey (the "Bank"), and Duff P. O'Connor (the "Executive").

                              W I T N E S S E T H:

         WHEREAS, the Bank and Executive have entered into an Employment
Agreement made effective as of the 15th day of April, 1987 (the "Employment
Agreement"); and

         WHEREAS, the Bank and Executive desire to amend certain of the terms of
the Employment Agreement.

         NOW, THEREFORE, the parties hereto, intended to be legally bound
hereby, agree as follows:

         1. The first sentence of Section 3(a) of the Employment Agreement shall
be amended to read in its entirety as follows:

            "The period of the Executive's employment under this Agreement shall
         commence as of the date of the conversion of the Association from a
         mutual to stock form (the "Effective Date") and shall, unless sooner
         terminated by the death of the Executive, mutual agreement or pursuant
         to Section 7, continue for a period of three (3) years therefrom, (such
         period being herein referred to as the "Employment Period"), provided,
         however, subject to Section 3(b), and if the Employment Period has not
         been terminated by the death of the Executive, by mutual agreement or
         pursuant to Section 7, that on each December 31 during the Employment
         Period, the Employment Period shall be extended for one year, so that
         at all times the Employment Period on each January 1 during the year of
         this Agreement shall be an unexpired period of three years, provided,
         however, that such extension shall not go into effect unless and until
         it has been reviewed and approved by the Board of Directors."

         2. Section 7(c) is amended to read in its entirety as follows:

             (c) Suspension Pursuant to Notice

                 If Executive is suspended and/or temporarily prohibited from
         participating in the conduct of the Association's affairs by a notice
         served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance
         Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Association'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 Association may in its discretion (i) pay the
         Executive all or part of the compensation withheld while the Bank's
         obligations under this Agreement were suspended and (ii) reinstate (in
         whole or in part) any of the Association's obligations under this
         Agreement which were suspended.
<PAGE>

         3. Section 7(d) is amended to read in its entirety as follows:

            (d) Termination Pursuant to Order

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

         4. Section 7(e) is amended to read in its entirety as follows:

            (e) Termination Upon Default

                If the Association is in default (as defined in Section 3(X)(1)
         of the Federal Deposit Insurance Act), all obligations under this
         Agreement shall terminate as of the date of default, but this
         subsection shall not affect any vested rights of the Association and
         Executive.

         5. Section 7(f) is amended to read in its entirety as follows:

            (f) Termination by Office of Thrift Supervision

                All obligations under this Agreement shall be terminated, except
         to the extent determined that continuation of this Agreement is
         necessary for the continued operation of the Association, (i) by the
         Director of the Office of Thrift Supervision or his or her designee at
         the time the Federal Deposit Insurance Corporation or the Resolution
         Trust Corporation enters into an agreement to provide assistance to or
         on behalf of the Association under the authority contained in Section
         13(c) of the Federal Deposit Insurance Act; or (ii) by the Director of
         the Office of Thrift Supervision or his or her designee, at the time
         such Director or designee approves a supervisory merger to resolve
         problems related to operation of the Association or when the
         Association is determined by such Director to be in an unsafe and and
         unsound condition. Any rights of the Association or Executive that have
         already vested, however, shall not be affected by such action.



                                       -2-
<PAGE>


         6. Section 7(h) is amended to read in its entirety as follows:

            Notwithstanding anything contained herein to the contrary, the
         Executive may terminate this Agreement by notice (which shall in no
         event be less than 6 months) to the Association on or after the date
         that the Executive first becomes eligible to receive retirement
         benefits under the Association's Employee Stock Ownership Plan in which
         case benefits shall be payable to the Executive in accordance with the
         provisions of such plan, and all rights of the Executive under this
         Agreement shall cease.

         7. Section 7 of the Employment Agreement is amended by adding at the
end thereof a new Section (k) which shall read in its entirety as follows:

            (k) Limitation. Notwithstanding anything to the contrary
         contained in this Section, Executive shall not receive and does hereby
         waive the right to receive any amount upon his termination of
         employment (whether pursuant to the terms of this Agreement or pursuant
         to any other policy or arrangement) which would cause Executive to
         receive an amount which exceeds three times the Executive's annual
         salary for the year in which Executive's employment is terminated.

         8. Section 12 of the Employment Agreement is amended to read in its
entirety as follows:

            "If the Executive obtains a judgment which enforces a right or
         benefit under this Agreement, the Association shall pay to the
         Executive all reasonable legal fees and expenses incurred by the
         Executive in seeking to obtain or enforce such right or benefit."

         9. The Employment Agreement is amended by deleting Section 20 in its
entirety.

        10. The Employment Agreement, as amended by this Amendment, shall
remain in full force and effect.








                                       -3-
<PAGE>

         IN WITNESS WHEREOF, the Association has caused this Amendment to be
executed and its seal to be affixed hereto by its officers thereunto duly
authorized, and the Executive has signed and sealed this Agreement, all as of
the day and year first above written.

                                 FIRST HOME SAVINGS BANK, S.L.A.
                                 


                                 By: /s/ Stephen D. Miller Pres.
                                    ------------------------------------


                                    /s/ Duff P. O'Connor
                                    ------------------------------------
                                        Duff P. O'Connor












                                       -4-
<PAGE>

                    SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

         This Amendment, dated this 25th day of January, 1993, by and between
First Home Savings Bank, S.L.A., a savings and loan association incorporated
under laws of New Jersey (the "Bank"), and Duff P. O'Connor (the "Executive").

                              W I T N E S S E T H:

         WHEREAS, the Bank and Executive have entered into an Employment
Agreement made effective as of the 15th day of April, 1987 (the "Employment
Agreement"); and

        WHEREAS,  the Employment Agreement was amended on March 27, 1992; and

        WHEREAS, the Bank and Executive desire to make further amendments to
certain of the terns of the Employment Agreement.

         NOW, THEREFORE, the parties hereto, intended to be legally bound
hereby, agree as follows:

         1. The first sentence of Section 3(a) of the Employment Agreement shall
be amended to read in its entirety as follows:

            "The period of the Executive's employment under this Agreement shall
         commence as of the date of the conversion of the Association from a
         mutual to stock form (the "Effective Date") and shall, unless sooner
         terminated by the death of the Executive, mutual agreement or pursuant
         to Section 7, continue for a period of three (3) years therefrom,
         (such period being herein referred to as the "Employment Period"),
         provided, however, subject to Section 3(b), and if the Employment
         Period has not been terminated by the death of the Executive, by mutual
         agreement or pursuant to Section 7, that on each December 31 during the
         Employment Period, the Employment Period shall be extended for one
         year, so that at all times the Employment Period on each January 1
         during the year of this Agreement shall be an unexpired period of three
         years, provided, however, that such extension shall not go into affect
         unless and until it has been reviewed and approved by the Board of
         Directors."

         2. Section 7(c) is amended to read in its entirety as follows:

             (c) Suspension Pursuant to Notice


                 If Executive is suspended and/or temporarily prohibited from
         participating in the conduct of the Association's affairs by a notice
         served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance
         Act (12 U.S.C. Section 1818(e)(3) and (g)(1)), the Association's
         obligations
<PAGE>

         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 Association may in its discretion (i) pay the
         Executive all or part of the compensation withheld while the Bank's
         obligations under this Agreement were suspended and (ii) reinstate (in
         whole or in part) any of the Association's obligations under this
         Agreement which were suspended.

         3. Section 7(d) is amended to read in its entirety as follows:

            (d) Termination Pursuant to Order

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

         4. Section 7(e) is amended to read in its entirety as follows:

            (e) Termination Upon Default

                If the Association is in default (as defined in Section 3(X)(1)
         of the Federal Deposit Insurance Act), all obligations under this
         Agreement shall terminate an of the date of default, but this
         subsection shall not affect any vested rights of the Association and
         Executive.

         5. Section 7(f) is amended to read in its entirety as follows:

            (f) Termination by Office of Thrift Supervision

                All obligations under this Agreement shall be terminated, except
         to the extent determined that continuation of this Agreement is
         necessary for the continued operation of the Association, (i) by the
         Director of the Office of Thrift Supervision or his or her designee at
         the time the Federal Deposit Insurance Corporation or the Resolution
         Trust Corporation enters into an agreement to provide assistance to or
         on behalf of the Association under the authority contained in Section
         13(c) of the Federal Deposit Insurance Act; or (ii) by the Director of
         the office of Thrift Supervision or his or her designee, at the time



                                       -2-
<PAGE>

         such Director or designee approves a supervisory merger to resolve
         problems related to operation of the Association or when the
         Association is determined by such Director to be in an unsafe and
         unsound condition. Any rights of the Association or Executive that have
         already vested, however, shall not be affected by such action.

         6. Section 7(h) is amended to read in its entirety as follows:

            Notwithstanding anything contained herein to the contrary, the
         Executive may terminate this Agreement by notice (which shall in no
         event be less than 6 months) to the Association on or after the date
         that the Executive first becomes eligible to receive retirement
         benefits under the Association's Employee Stock Ownership Plan in which
         case benefits shall be payable to the Executive in accordance with the
         provisions of such plan, and all rights of the Executive under this
         Agreement shall cease.

         7. Section 7(i)(1) is amended to read in its entirety as follows:

            100% of the salary set forth in Section 4 as the same may have been
         increased from time to time, payment of which shall be at the time
         provided for in this agreement as if the Executive's employment under
         this agreement has not terminated.

         8. Section 7 of the Employment Agreement is amended by adding at the
and thereof a new Section (k) which shall read in its entirety as follows:

            (k) Limitation. Notwithstanding anything to the contrary contained
         in this Section, Executive shall not receive and does hereby waive the
         right to receive any amount upon his termination of employment (whether
         pursuant to the terms of this Agreement or pursuant to any other policy
         or arrangement) which would cause Executive to receive an amount which
         exceeds three times the Executive's annual salary for the year in which
         Executive's employment is terminated.

         9. Section 12 of the Employment Agreement is amended to read in its
entirety as follows:

            "If the Executive obtains a judgment which enforces a right or
         benefit under this Agreement, the Association shall pay to the



                                       -3-
<PAGE>

         Executive all reasonable legal fees and expenses incurred by the
         Executive in seeking to obtain or enforce such right or benefit."

         10. The Employment Agreement is amended by deleting Section 20 in its
entirety.

         11. The Employment, Agreement, as amended by this Amendment, shall
remain in full force and effect.

         IN WITNESS WHEREOF, the Association has caused this Amendment to be
executed and its seal to be affixed hereto by its officers therunto duly
authorized, and the Executive has signed and sealed this Agreement, all as of
the day and year first above written.


                                 FIRST HOME SAVINGS BANK, S.L.A.


                                 By: /s/ Sol L. Davidow
                                     ------------------------------------
                                     Sol L. Davidow, Chairman of the
                                       Board


                                     /s/ Duff F. O'Connor
                                     ------------------------------------
                                     Duff F. O'Connor








                                       -4-
<PAGE>

         IN WITNESS WHEREOF, the Bank has caused this Amendment to be executed
and its seal to be affixed hereto by its officers thereunto duly authorized, and
the Executive has signed and sealed this Agreement, all as of the day and year
first above written.

                                         FIRST HOME SAVINGS BANK, F.S.B.


                                         By: /s/ Sol L. Davidow
                                            ----------------------------------
                                            Sol L. Davidow, Chairman of the
                                               Board




                                             /s/ Duff P. O'Connor
                                            ----------------------------------
                                                 Duff P. O'Connor










                                       -2-
<PAGE>

                     THIRD AMENDMENT TO EMPLOYMENT AGREEMENT



         This Amendment, dated this 5th day of January, 1994, by and between
First Home Savings Bank, F.S.B., a savings and loan association incorporated
under laws of the United States (the "Bank"), and Duff P. O'Connor (the
"Executive").

                              W I T N E S S E T H:

         WHEREAS, the Bank, as the successor in interest by merger with First
Home Savings Bank, S.L.A. (formerly known as First Savings and Loan Association
of Penns Grove), and Executive have entered into an Employment Agreement made
effective as of the 15th day of April, 1987 (the "Employment Agreement"); and

         WHEREAS, the Employment Agreement was amended on March 27, 1992 and
January 25, 1993; and

         WHEREAS, the Bank and Executive desire to make further amendments to
certain of the terms of the Employment Agreement.

         NOW, THEREFORE, the parties hereto, intended to be legally bound
hereby, agree as follows:

         1. All references in the Employment Agreement, as amended, to "Bank" or
"Association" shall be deemed to refer to First Home Savings Bank, F.S.B.

         2. Section 7(k) of the Employment Agreement is amended to read in its
entirety as follows:

            (k) Limitation. Notwithstanding anything to the contrary contained
         in this Section, Executive shall not receive and does hereby waive the
         right to receive any amount upon his termination of employment (whether
         pursuant to the terms of this Agreement or pursuant to any other policy
         or arrangement) which would cause Executive to receive an amount which
         exceeds three times the Executive's Average Annual Compensation (as
         hereinafter defined). "Average Annual Compensation" means the average
         of all Compensation (as hereinafter defined) paid to Executive by Bank
         during each of the five full taxable years (i.e. January 1 to December
         31) preceding the year in which Executive's employment is terminated.
         "Compensation" shall mean "Compensation" as defined in RB 27a,
         "Executive Compensation and Employment Contracts", dated March 5, 1993,
         promulgated by the Office of Thrift Supervision.

         3. The Employment Agreement, as amended, and as amended by this
Amendment, shall remain in full force and effect.