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                                                                    Exhibit 10.5

                                    AGREEMENT
                                    ---------



         THIS AGREEMENT, entered into this 27th day of February, 1997, by and
between Potters Financial Corporation, a savings and loan holding company
incorporated under Ohio law (hereinafter referred to as "PFC"); The Potters
Savings and Loan Company, a savings and loan association incorporated under Ohio
law and a wholly-owned subsidiary of PFC (hereinafter referred to as "PSL"); and
Edward L. Baumgardner, an individual (hereinafter referred to as the "ELB");


                                   WITNESSETH:


         WHEREAS, ELB is the President of PFC and PSL (hereinafter collectively
referred to as "POTTERS");

         WHEREAS, the Boards of Directors of POTTERS desire to retain the
services of ELB as the President of POTTERS;

         WHEREAS, ELB desires to continue to serve as the President of POTTERS;
and

         WHEREAS, ELB and POTTERS desire to enter into this Agreement to set
forth the rights and obligations of ELB and POTTERS in the event of the
termination of ELB's employment under the circumstances set forth in this
Agreement;

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, POTTERS and ELB hereby agree as follows:

         Section l.        TERMINATION OF EMPLOYMENT.

         (a) In the event of the termination of the employment of ELB (i)
without ELB's prior written consent, (ii) for any reason other than JUST CAUSE
(hereafter defined) and (iii) in connection with or within one year of a CHANGE
OF CONTROL (hereinafter defined) of POTTERS, then the following shall occur:

                           (I) POTTERS shall pay to ELB or, in the event of the
                  death of ELB, to the estate of ELB, an amount equal to the
                  SEVERANCE PAYMENT, subject to standard withholding, within ten
                  (10) days after such termination;
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                           (II) To the extent permitted by the benefit plans of
                  POTTERS, ELB and his dependents shall continue to be covered
                  under all such plans at POTTERS' expense as if ELB were still
                  employed by POTTERS until the earliest of the expiration of
                  the TERM (hereinafter defined) or the date on which ELB is
                  included in another employer's benefit plans as a full-time
                  employee; and

                           (III) ELB shall not be required to mitigate the
                  amount of any payment provided for in this Agreement by
                  seeking other employment or otherwise, nor shall any amounts
                  received from other employment or otherwise by ELB offset in
                  any manner the obligations of POTTERS hereunder, except as
                  specifically stated in subparagraph (II).

In the event that payments pursuant to this Section 1(a) would result in the
imposition of a penalty tax pursuant to Section 280G(b) (3) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder,
such payments shall be reduced to the maximum amount which may be paid under
Section 280G without exceeding such limits.

         (b) In the event of the occurrence of any of the following events (i)
without the prior written consent of ELB and (ii) within one year following a
CHANGE OF CONTROL of POTTERS, ELB may voluntarily terminate his employment with
POTTERS :

                           (i) The requirement that ELB move his personal
                  residence or perform his principal executive functions more
                  than thirty-five (35) miles from his primary office as of the
                  date of this Agreement;

                           (ii) A reduction in ELB's base compensation as in
                  effect on the date of this Agreement or as the same may have
                  been increased from time to time;

                           (iii) The failure by POTTERS to continue to provide
                  ELB with compensation and benefits substantially similar to
                  those provided to him under any of the employee benefit plans
                  in which ELB becomes a participant or the taking of any action
                  by POTTERS which would directly or indirectly reduce any of
                  such benefits or deprive ELB of any material fringe benefit
                  potentially enjoyed by him at the time of the CHANGE OF
                  CONTROL;

                           (iv) The assignment to ELB of material duties and
                  responsibilities other than those normally associated with his
                  position as referenced in the recitals above; or

                           (v) A material diminution or reduction in ELB's
                  responsibilities or authority (including reporting
                  responsibilities) in connection with his employment with
                  POTTERS.

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Within ten (10) days after the voluntary termination of ELB's employment in
accordance with this Section 1(b), POTTERS shall pay to ELB or, in the event of
the death of ELB, to the estate of ELB, an amount equal to the SEVERANCE
PAYMENT, subject to standard withholding.

         (c) In the event the employment of ELB is terminated under
circumstances other than as set forth in paragraphs (a) and (b) of this Section
1, ELB shall not be entitled to any severance pay or benefits. Without limiting
the generality of the foregoing sentence, ELB acknowledges that this Agreement
is not a contract of employment; that ELB has no guaranteed term of employment;
and that ELB is an employee at will, subject to termination at any time, with or
without notice or cause.

         Section 2. DEFINITIONS. (a) A "CHANGE OF CONTROL" shall be deemed to
have occurred in the event that, at any time during the TERM, either any person
or entity obtains "conclusive control" of POTTERS within the meaning of 12
C.F.R. ss.574.4(a), or any person or entity obtains "rebuttable control" of
POTTERS within the meaning of 12 C.F.R. ss.574.4(b) and has not rebutted control
in accordance with 12 C.F.R. ss.574.4(e).

         (b) "JUST CAUSE" shall mean personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, failure or
refusal to perform the duties and responsibilities assigned by the Boards of
Directors of POTTERS, violation of any law, rule, regulation or final
cease-and-desist order (other than traffic violations or similar offenses),
conviction of a felony or for fraud or embezzlement, or material breach of any
provision of this Agreement.

         (c) "SEVERANCE PAYMENT" shall mean the product of 1.2, multiplied by
the TOTAL REMUNERATION paid by POTTERS to ELB during the calendar year preceding
termination of employment.

         (d) "TOTAL REMUNERATION" shall mean the sum of (i) base salary, (ii)
bonuses, (iii) incentives, (iv) commissions and (v) other benefits, including,
but not limited to, health and life insurance, club dues, contributions made by
POTTERS to the 401-K plan and the Employee Stock Ownership Plan and the taxable
value of an employer-provided automobile, if any.

         Section 3. TERM. The term of this Agreement shall commence on the date
first above written and shall continue for a period of three (3) years
thereafter (herein referred to as the "TERM"); provided, however, that in the
event of a CHANGE OF CONTROL during the third year of the TERM, the TERM shall,
automatically and without further act, be extended for a period of fifteen (15)
months following such CHANGE OF CONTROL.

         Section 4. SPECIAL REGULATORY EVENTS. Notwithstanding Section 1 of this
Agreement, the obligations of POTTERS to ELB shall be as follows in the event of
the following circumstances:


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         (a) If ELB is suspended and/or temporarily prohibited from
participating in the conduct of the POTTERS' affairs by a notice served under
section 8(e) (3) or (g) (1) of the Federal Deposit Insurance Act (hereinafter
referred to as the "FDIA"), POTTERS' obligations under this Agreement shall be
suspended as of the date of service of such notice, unless stayed by appropriate
proceedings.

         (b) If ELB is removed and/or permanently prohibited from participating
in the conduct of POTTERS' affairs by an order issued under Section 8(e) (4) or
(g) (l) of the FDIA, all obligations of POTTERS under this Agreement shall
terminate as of the effective date of such order; provided, however, that vested
rights of ELB shall not be affected by such termination.

         (c) If POTTERS is in default, as defined in section 3(x) (1) of the
FDIA, all obligations under this Agreement shall terminate as of the date of
default; provided, however, that vested rights of ELB shall not be affected.

         (d) All obligations under this Agreement shall be terminated, except to
the extent of a determination that the continuation of this Agreement is
necessary for the continued operation of POTTERS, (i) by the Director of the
Office of Thrift Supervision (hereinafter referred to as the "OTS"), or his or
her designee at the time that the Federal Deposit Insurance Corporation enters
into an agreement to provide assistance to or on behalf of POTTERS under the
authority contained in Section 13(c) of the FDIA or (ii) by the Director of the
OTS, or his or her designee, at any time the Director of the OTS, or his or her
designee, approves a supervisory merger to resolve problems related to the
operation of POTTERS or when POTTERS is determined by the Director of the OTS to
be in an unsafe or unsound condition. No vested rights of ELB shall be affected
by any such action.

         Section 5. NONASSIGNABILITY. Neither this Agreement nor any right or
interest hereunder shall be assignable by ELB without POTTERS' prior written
consent; provided, however, that nothing in this Section 5 shall preclude ELB
from designating a beneficiary to receive any benefits payable hereunder upon
his death.

         Section 6. NO ATTACHMENT. Except as required by law, no right to
receive payment 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 of
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.

         Section 7. BINDING AGREEMENT. This Agreement shall be binding upon, and
inure to the benefit of, ELB and POTTERS.

         Section 8. WAIVER. No term or condition of this Agreement shall be
deemed to have been waived, nor shall there be an estoppel against the
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver, unless specifically stated therein, and each waiver
shall operate only as to the specific term or condition waived and shall not
constitute 


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a waiver of such term or condition for the future or as to any act other than
the act specifically waived.

         Section 9. SEVERABILITY. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect the other provisions
of this Agreement not held so invalid, and each such other provision shall, to
the full extent consistent with applicable law, continue in full force and
effect. If this Agreement is held invalid or cannot be enforced, then any prior
Agreement between POTTERS (or any predecessor thereof) and ELB shall be deemed
reinstated to the full extent permitted by law, as if this Agreement had not
been executed.

         Section 10. HEADINGS. The headings of the paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.

         Section 11. GOVERNING LAW. This Agreement has been executed and
delivered in the State of Ohio and its validity, interpretation, performance,
and enforcement shall be governed by the laws of the State of Ohio, except to
the extent that federal law is governing.

         Section 12. EFFECT OF PRIOR AGREEMENTS. This Agreement contains the
entire understanding between the parties hereto and supersedes any prior
employment agreement between POTTERS and ELB, each of which is hereby terminated
and is of no further force or effect.

         Section 13. NOTICES. Any notice or other communication required or
permitted pursuant to this Agreement shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:

         If to Potters Financial Corporation and/or The Potters Savings and Loan
Company:

                           Potters Financial Corporation

                           ------------------------------

                           ------------------------------

         With copies to:

                           John C. Vorys, Esq.
                           Vorys, Sater, Seymour and Pease
                           Atrium Two, Suite 2100
                           221 East Fourth Street
                           Cincinnati, Ohio 45201-0236

         If to ELB to:



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                           Edward L. Baumgardner

                           ------------------------------

                           ------------------------------

                  IN WITNESS WHEREOF, Potters Financial Corporation and The
Potters Savings and Loan Company have caused this Agreement to be executed by
their duly authorized officers, and ELB has signed this Agreement, each as of
the day and year first above written.


Attest:                            POTTERS FINANCIAL CORPORATION


Beverly J. Neer                    By William L. Miller
----------------                      ---------------------------

                                      ---------------------------
                                   its  Chairman
                                      ---------------------------


Attest:                            THE POTTERS SAVINGS AND LOAN
                                   COMPANY

Beverly J. Neer                    By William L. Miller  
-----------------                     ----------------------------

                                      ----------------------------
                                   its  Chairman 
                                      ----------------------------

Attest:


Beverly J. Neer                    Edward L. Baumgardner 
-----------------                  -------------------------------
                                   Edward L. Baumgardner



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