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                                                                    Exhibit 10.6

                                    AGREEMENT

         AGREEMENT, dated this 26th day of May 1999, between First Keystone
Financial, Inc. (the "Corporation"), a Pennsylvania corporation, and Elizabeth
M. Mulcahy (the "Executive").

                                   WITNESSETH:

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

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

         WHEREAS, the Employers currently have an agreement with the Executive
dated January 25, 1995, which is being amended and superseded by this Agreement,
and in accordance with the provisions of Office of Thrift Supervision ("OTS")
Regulatory Bulletin 27a, the Corporation and the Savings Bank desire to enter
into separate agreements with the Executive relating to her employment by each
of the Employers; and

         WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive by the Corporation in the event that her
employment with the Corporation is terminated under specified circumstances;

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

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

         (a) ANNUAL COMPENSATION. The Executive's "Annual Compensation" for
purposes of this Agreement shall be deemed to mean the highest level of base
salary paid to the Executive by the Employers or any subsidiary thereof during
any of the three calendar years ending during the calendar year in which the
Date of Termination occurs.

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

         (c) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean a change in control of a nature that would be required
to be reported in response to Item
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6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), or any successor thereto, whether or
not any security of the Corporation is registered under the Exchange Act;
provided that, without limitation, such a change in control shall be deemed to
have occurred if (i) any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power of the
Corporation's then outstanding securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Corporation cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.

         (d) CODE. Code shall mean the Internal Revenue Code of 1986, as
amended.

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

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

         (g) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive based on:

                  (i) Without the Executive's express written consent, the
         assignment by the Employers to the Executive of any duties which are
         materially inconsistent with the Executive's positions, duties,
         responsibilities and status with the Employers immediately prior to a
         Change in Control of the Corporation, or a material change in the
         Executive's reporting responsibilities, titles or offices as an
         employee and as in effect immediately prior to such a Change in
         Control, or any removal of the Executive from or any failure to
         re-elect the Executive to any of such responsibilities, titles or
         offices, except in connection with the termination of the Executive's
         employment for Cause, Disability or Retirement or as a result of the
         Executive's death or by the Executive other than for Good Reason;

                  (ii) Without the Executive's express written consent, a
         reduction by the Employers in the Executive's base salary as in effect
         on the date of the Change in Control of the Corporation or as the same
         may be increased from time to time thereafter or a reduction in the
         package of fringe benefits provided to the Executive;



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

                  (iv) The failure by the Corporation to obtain the assumption
         of and agreement to perform this Agreement by any successor as
         contemplated in Section 6 hereof.

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

         (i) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Corporation for Cause, Disability or Retirement or by the
Executive for Good Reason shall be communicated by written "Notice of
Termination" to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, (iii)
specifies a Date of Termination, which shall be not less than thirty (30) nor
more than ninety (90) days after such Notice of Termination is given, except in
the case of the Corporation's termination of Executive's employment for Cause,
and (iv) is given in the manner specified in Section 7 hereof.

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

         2. BENEFITS UPON TERMINATION. If the Executive's employment by the
Corporation shall be terminated subsequent to a Change in Control of the
Corporation by (i) the Corporation other than for Cause, Retirement, or as a
result of the Executive's death, or (ii) the Executive for Good Reason, then the
Employers shall, subject to the provisions of Section 3 hereof, if applicable:

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

         (b) maintain and provide for a period ending at the earlier of (i) two
(2) years after the Date of Termination or (ii) the date of the Executive's
full-time employment by another employer (provided that the Executive is
entitled under the terms of such employment to benefits substantially similar to
those described in this subparagraph (b)), at no cost to the Executive, the
Executive's continued participation in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to participate immediately
prior to the Date of Termination (other than retirement plans or stock
compensation plans of the Employers), provided that in the event that the
Executive's participation in any plan, program or arrangement as provided in
this subparagraph (b) is barred, or during such

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period any such plan, program or arrangement is discontinued or the benefits
thereunder are materially reduced, the Employers arrange to provide the
Executive with benefits substantially similar to those which the Executive was
entitled to receive under such plans, programs and arrangements immediately
prior to the Date of Termination.

         3.       PAYMENT OF ADDITIONAL BENEFITS UNDER CERTAIN CIRCUMSTANCES.

                  (a) If the payments and benefits pursuant to Section 2 hereof,
either alone or together with other payments and benefits which the Executive
has the right to receive from the Employers (including, without limitation, the
payments and benefits which the Executive would have the right to receive from
the Savings Bank pursuant to Section 2 of the Agreement between the Savings Bank
and the Executive dated as of the date hereof (the "Savings Bank Agreement"),
before giving effect to any reduction in such amounts pursuant to the provisions
of Section 3 of the Savings Bank Agreement), would constitute a "parachute
payment" as defined in Section 280G(b)(2) of the Code (the "Initial Parachute
Payment," which includes the amounts paid pursuant to clause (A) below), then
the Corporation shall pay to the Executive, in twenty-four (24) equal monthly
installments beginning with the first business day of the month following the
Date of Termination or in a lump sum within five business days of the Date of
Termination (at the Executive's election), a cash amount equal to the sum of the
following:

                           (A) the amount by which the payments and benefits
                  that would have otherwise been paid by the Savings Bank to the
                  Executive pursuant to Section 2 of the Savings Bank Agreement
                  are reduced by the provisions of Section 3 of the Savings Bank
                  Agreement;

                           (B) twenty (20) percent (or such other percentage
                  equal to the tax rate imposed by Section 4999 of the Code) of
                  the amount by which the Initial Parachute Payment exceeds the
                  Executive's "base amount" from the Employers, as defined in
                  Section 280G(b)(3) of the Code, with the difference between
                  the Initial Parachute Payment and the Executive's base amount
                  being hereinafter referred to as the "Initial Excess Parachute
                  Payment"; and

                           (C) such additional amount (tax allowance) as may be
                  necessary to compensate the Executive for the payment by the
                  Executive of state and federal income and excise taxes on the
                  payment provided under clause (B) above and on any

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                  payments under this clause (C). In computing such tax
                  allowance, the payment to be made under clause (B) above shall
                  be multiplied by the "gross up percentage" ("GUP"). The GUP
                  shall be determined as follows:

                                                              Tax Rate
                                                 GUP =      -------------
                                                             1- Tax Rate

                  The Tax Rate for purposes of computing the GUP shall be the
                  highest marginal federal and state income and
                  employment-related tax rate, including any applicable excise
                  tax rate, applicable to the Executive in the year in which the
                  payment under clause (B) above is made.

                  (b) Notwithstanding the foregoing, if it shall subsequently be
determined in a final judicial determination or a final administrative
settlement to which the Executive is a party that the actual excess parachute
payment as defined in Section 280G(b)(1) of the Code is different from the
Initial Excess Parachute Payment (such different amount being hereafter referred
to as the "Final Excess Parachute Payment"), then the Corporation's independent
tax counsel or accountants shall determine the amount (the "Adjustment Amount")
which either the Executive must pay to the Corporation or the Corporation must
pay to the Executive in order to put the Executive (or the Corporation, as the
case may be) in the same position the Executive (or the Corporation, as the case
may be) would have been if the Initial Excess Parachute Payment had been equal
to the Final Excess Parachute Payment. In determining the Adjustment Amount, the
independent tax counsel or accountants shall take into account any and all taxes
(including any penalties and interest) paid by or for the Executive or refunded
to the Executive or for the Executive's benefit. As soon as practicable after
the Adjustment Amount has been so determined, the Corporation shall pay the
Adjustment Amount to the Executive or the Executive shall repay the Adjustment
Amount to the Corporation, as the case may be.

                  (c) In each calendar year that the Executive receives payments
of benefits under this Section 3, the Executive shall report on her state and
federal income tax returns such information as is consistent with the
determination made by the independent tax counsel or accountants of the
Corporation as described above. The Corporation shall indemnify and hold the
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys' fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information. The
Executive shall promptly notify the Corporation in writing whenever the
Executive receives notice of the institution of a judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under Section
4999 of the Code of any amount paid or payable under this Section 3 is being
reviewed or is in dispute. The Corporation shall assume control at its expense
over all legal and accounting matters pertaining to such federal tax treatment
(except to the extent necessary or appropriate for the Executive to resolve any
such proceeding with respect to any matter unrelated to amounts paid or payable
pursuant to this Section 3) and the Executive shall cooperate fully with the
Corporation in any such proceeding. The Executive shall not enter into any

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compromise or settlement or otherwise prejudice any rights the Corporation may
have in connection therewith without the prior consent of the Corporation.

         4.  MITIGATION; EXCLUSIVITY OF BENEFITS.

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

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

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

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

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

         To the Corporation:                President
                                            First Keystone Financial, Inc.
                                            22 West State Street
                                            Media, Pennsylvania 19063

         To the Executive:                  Elizabeth M. Mulcahy
                                            218 Fox Road
                                            Media, Pennsylvania 19063

         8. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the

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Executive and such officer or officers as may be specifically designated by the
Board of Directors of the Corporation to sign on its behalf. No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.

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

         10. NATURE OF EMPLOYMENT AND OBLIGATIONS.

         (a) Nothing contained herein shall be deemed to create other than a
terminable at will employment relationship between the Corporation and the
Executive, and the Corporation may terminate the Executive's employment at any
time, subject to providing any payments specified herein in accordance with the
terms hereof.

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

         11. TERM OF AGREEMENT. This Agreement shall terminate two (2) years
after the date first above written; provided that on or prior to the first
anniversary of the date first above written and each anniversary thereafter, the
Board of Directors of the Corporation shall consider (with appropriate corporate
documentation thereof, and after taking into account all relevant factors,
including Executive's performance as an employee) renewal of the term of this
Agreement for an additional one (1) year, and the term of this Agreement shall
be so extended unless the Board of Directors of the Corporation do not approve
such renewal and provide written notice to the Executive, or the Executive gives
written notice to the Corporation, thirty (30) days prior to the date of any
such anniversary, of such party's or parties' election not to extend the term
beyond its then scheduled expiration date; and provided further that,
notwithstanding the foregoing to the contrary, this Agreement shall be
automatically extended for an additional one (1) year upon a Change in Control
of the Corporation.

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

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

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

         15. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Corporation and the Executive with respect to the matters agreed to
herein. All prior agreements between the Corporation and the Executive with
respect to the matters agreed to herein, including without limitation the
Agreement between the Employers and the Executive dated January 25, 1995, are
hereby superseded and shall have no force or effect. Notwithstanding the
foregoing, nothing contained in this Agreement shall affect the agreement of
even date being entered into between the Savings Bank and the Executive.



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


Attest:                                  FIRST KEYSTONE FINANCIAL, INC.


/s/ Carol Walsh                          By:/s/ Donald S. Guthrie
Carol Walsh                                   Donald S. Guthrie
                                              President


Attest:                                  EXECUTIVE


/s/ Carol Walsh                          By:/s/ Elizabeth M. Mulcahy
Carol Walsh                                   Elizabeth M. Mulcahy, Individually


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