Document:

Exhibit 4.3

                        INDEPENDENT CONTRACTOR AGREEMENT

     THIS INDEPENDENT CONTRACTOR AGREEMENT (this "Agreement"), dated as of March
13,  2003,  between  Palomar  Enterprises,   Inc.,  a  Nevada  corporation  (the
"Company"), and Kelly Black ("Consultant"), an individual.

                                  WITNESSETH:

     WHEREAS,  Company  desires to retain  Consultant  to consult and advise the
Company in the areas of corporate image advertising,  business development,  and
business strategy and consultant in connection the Company's  business,  namely,
the nutraceutical industry is willing to provide such services;

     NOW,  THEREFORE,  in  consideration  of the mutual  undertakings  contained
herein, the parties agree as follows:

     Consulting  Arrangement.  The  Company  hereby  engages  Consultant  as  an
independent  contractor and not as an employee, to render consulting services to
the  Company  as  hereinafter   provided  and  Consultant  hereby  accepts  such
engagement  for a period  commencing on March 2003 and ending on the 31st day of
March 2004.  Consultant  agrees that  Consultant  will not have any authority to
bind or act on  behalf  of the  Company.  Consultant  shall  at all  times be an
independent contractor hereunder, rather than an agent, coventurer,  employee or
representative of the Company.  The Company hereby  acknowledges and agrees that
Consultant  may engage  directly or indirectly in other  businesses and ventures
and shall not be required to perform any services under this Agreement  when, or
for such periods in which, the rendering of such services shall unduly interfere
with such other businesses and ventures, providing that such undertakings do not
completely preempt Consultant's  availability during the term of this Agreement.
Neither  Consultant  nor his  employees  will be  considered  by  reason  of the
provisions of this Agreement or otherwise as being an employee of the Company or
as being  entitled to  participate in any health  insurance,  medical,  pension,
bonus or  similar  employee  benefit  plans  sponsored  by the  Company  for its
employees.  Consultant  shall  report all earnings  under this  Agreement in the
manner appropriate to its status as an independent contractor and shall file all
necessary reports and pay all taxes with respect to such payments.

                                    SERVICES

     1.  Subject to the terms and  conditions  of this  Agreement,  the  Company
hereby engages the Consultant,  and Consultant hereby accepts the engagement, to
provide advice,  analysis and  recommendations  (the  "Services") to the Company
with respect to the following:

     A.   Identifying prospective strategic partners and strategic alliances;

     B.   Due diligence processes and capital structures and filing issues;

     C.   Periodic  reporting as to  developments  concerning the industry which
          may be  relevant  or of  interest  or  concern  to the  Client  or the
          Client's business;

     D.   Developing and managing Strategic Planning issues;
<PAGE>
     E.   Providing Project Management services for various projects;

     F.   Assisting   in   developing   a   corporate    image   for   potential
          advertisements;

     G.   Consulting  on  alternatives  to  enhance  operational  growth  of the
          Company.

     During the term of this Agreement,  Consultant shall render such consulting
services as the Company from time to time  reasonably  requests,  which services
shall  include  but not be limited to those  rendered by  Consultant  to Company
prior to the date hereof; provided that:

     (a)  To the extent  practicable  such services  shall be furnished  only at
          such time and places as are mutually  satisfactory  to the Company and
          Consultant; and

     (b)  Consultant  shall  devote as much time as  needed in  performing  such
          services and shall not be required to perform any  services  hereunder
          while Consultant is on vacation or suffering from an illness.

     2. Compensation and Expenses.  For the Services provided by the Consultant,
the Company (i) shall compensate the Consultant by delivering to the Consultant,
not later than March 13,  2003,  one  million  (1,000,000)  shares of the common
stock of the Company  ("Common  Stock") that is Freely Tradeable (as hereinafter
defined).  "Freely  Tradeable"  means shares that may be sold at any time by the
Consultant  free of any  contractual or other  restriction on transfer and which
have been  appropriately  listed or registered  for such sale on all  securities
markets on any shares of the Common Stock are currently so listed or registered;
and (ii) the Company  shall be  responsible  for the  payment of the  reasonable
out-of-pocket costs and expenses of Consultant incurred prior to, or on or after
the date of this  Agreement,  in  connection  with  its  engagement  under  this
Agreement,  including,  but not limited to, reasonable fees and disbursements of
counsel for Consultant,  travel and related  expenses,  document  production and
computer database charges. The Company shall reimburse Consultant for such costs
and  expenses  as they are  incurred,  promptly  after  receipt of a request for
reimbursement from Consultant.

     3. Successors and Assigns. This Agreement is binding upon and inures to the
benefit of the Company and its affiliates, successors and assigns and is binding
upon and inures to the benefit of  Consultant  and his  successors  and assigns;
provided that in no event shall Consultant's obligations to perform the Services
be delegated or transferred by Consultant  without the prior written  consent of
the Company.

     4. Term.  This  Agreement  shall  commence on the date  hereof and,  unless
sooner  terminated in accordance with the provisions of Section 6 hereof,  shall
expire on March 13,  2003.  However,  the  Agreement  may be  extended by mutual
written consent.

     5.  Termination.  Either  the  Company or  Consultant  may  terminate  this
Agreement  for  material  breach upon at least  thirty  (30) days prior  written
notice  specifying  the  nature  of the  breach,  if such  breach  has not  been
substantially cured within the thirty (30) day period.

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     6.  Independent  Contractor  Relationship.  Consultant  and the Company are
independent  contractors  and  nothing  contained  in this  Agreement  shall  be
construed to place them in the  relationship  of partners,  principal and agent,
employer/employee or joint ventures. Neither party shall have the power or right
to bind or obligate the other party, nor shall it hold itself out as having such
authority.

     7.   Indemnification.   Company  shall  indemnify  and  hold  harmless  the
Consultant from and against any and all losses, damages, liabilities, reasonable
attorney's  fees,  court  costs  and  expenses  resulting  or  arising  from any
third-party claims, actions, proceedings, investigations, or litigation relating
to or arising from or in connection with this Agreement,  or any act or omission
by Company.

     8.  Notice.  For the  purpose  of this  Agreement,  notices  and all  other
communications  provided  for herein  shall be in writing and shall be deemed to
have been duly given (i) when delivered, if personally delivered, (ii) when sent
by facsimile  transmission,  when receipt  therefore has been duly received,  or
(iii) when mailed by United States  registered mail,  return receipt  requested,
postage prepaid, or by recognized overnight courier,  addressed set forth in the
preamble  to this  Agreement  or to such  other  address  as any  party may have
furnished  to the other in any  writing  in  accordance  herewith,  except  that
notices of change of address shall be effective only upon receipt.

     9. Miscellaneous.  No provisions of this Agreement may be modified,  waived
or  discharged  unless such  waiver,  modification  or discharge is agreed to in
writing signed by authorized  officers of each party.  No waiver by either 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. No agreements or representations,  oral or otherwise,  express or implied,
with respect to the subject  matter  hereof have been made by either party which
are not set forth  expressly in this  Agreement.  The validity,  interpretation,
construction and performance of this Agreement shall be governed by the internal
laws of the State of Nevada.  Any  controversy  arising  under or in relation to
this Agreement shall be settled by binding  arbitration in Las Vegas,  Nevada in
accordance  with the laws of the State of Nevada  and the rules of the  American
Arbitration Association.

     10.   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.

     11. Severability.  If in any jurisdiction,  any provision of this Agreement
or its  application to any party or  circumstance  is restricted,  prohibited or
unenforceable,  such provision  shall, as to such  jurisdiction,  be ineffective
only to the extent of such restriction, prohibition or unenforceability, without
invalidating the remaining  provisions hereof and without affecting the validity
or enforceability of such provision in any other jurisdiction or its application
to  other  parties  or  circumstances.  In  addition,  if any one or more of the
provisions  contained in this Agreement shall for any reason in any jurisdiction
be held to be  excessively  broad  as to  time,  duration,  geographical  scope,
activity or subject, it shall be construed,  by limiting and reduction it, so as
to be  enforceable  to the extent  compatible  with the  applicable  law of such
jurisdiction as it shall then appear.

                                       3
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     IN WITNESS  WHEREOF,  this  Consulting  Agreement  has been executed by the
Company and Consultant as of the date first written above.

Signature of Contractor

Name: Kelly Black
Address: 2440 E. Jensen, Mesa, AZ 85213

Signature: /s/ Kelly Black
          --------------------------

Signature of Company

Name: Palomar Enterprises, Inc.
Address: 7898 E. Acoma Drive, Suite 102
           Scottsdale, Arizona 85260

Signature: /s/ Jeffrey Halbirt
          --------------------------

                                       4Exhibit 10.3

                     FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

            THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT, made as of the 22nd
day of January 2002, among FIRST LEESPORT BANCORP, INC. ("Bancorp"), a
Pennsylvania business corporation having a place of business at 1240
Broadcasting Road, Wyomissing, Pennsylvania, LEESPORT BANK (the "Bank"), a
Pennsylvania banking institution having a place of business at 1240 Broadcasting
Road, Wyomissing, Pennsylvania, and RAYMOND H. MELCHER ("Executive"), an adult
individual.

                                   BACKGROUND:

            1. Bancorp, Bank (as successor by merger to The First National Bank
of Leesport), and Executive are presently parties to an employment agreement,
dated June 15, 1998 (the "Employment Agreement"), a copy of which is attached as
Exhibit "A."

            2. For ease of administration, Bancorp desires to amend certain of
its outstanding employment agreements with executive officers, including the
Employment Agreement, to provide for a uniform termination date of December 31
by extending the existing termination date under the Employment Agreement.

            3. Executive has agreed to amend the Employment Agreement to provide
for a termination date of December 31 by extending the existing term of the
Employment Agreement.

                                   AGREEMENT:

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

            1. Amendment of Term of Agreement. Section 3(a) of the Employment
Agreement is hereby amended and restated in its entirety to read as follows:

            "(a) This Agreement shall be for a period (the "Employment Period")
            commencing on the date of the Employment Agreement and ending on
            December 31, 2004; provided, however, that the Employment Period
            shall be automatically extended on January 1, 2003 and on January 1
            of each subsequent year (each an "Annual Renewal Date") for a period
            ending three (3) years from each Annual Renewal Date unless Bancorp
            or Executive shall give written notice of nonrenewal to the other
            party at least ninety (90) days prior to an Annual Renewal Date, in
            which event this Agreement shall terminate at the end of the then
            existing Employment Period."

            2. Ratification of Agreement. Except as otherwise provided in this
First Amendment to Employment Agreement, all terms and conditions of the
Employment Agreement

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remain in full force and effect, and nothing contained in this First Amendment
to Employment Agreement shall be deemed to alter or amend any provision of the
Employment Agreement except as specifically provided herein. References in the
Employment Agreement to the "Agreement" shall be deemed to be references to the
Agreement as amended hereby. References in the Employment Agreement to the
"First National Bank of Leesport" or the "Bank" shall be deemed to be references
to the Bank as defined herein.

            3. Waiver. No provision of this First Amendment to Employment
Agreement may be modified, waived, or discharged unless such waiver,
modification, or discharge is agreed to in writing and signed by Executive and
an executive officer specifically designated by the Boards of Directors of
Bancorp or the Bank. No waiver by any party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this First Amendment to Employment 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.

            4. Assignment. This First Amendment to Employment Agreement shall
not be assignable by any party, except by Bancorp or the Bank to an affiliate of
Bancorp or to any successor in interest to their respective businesses.

            5. Entire Agreement. This First Amendment to Employment Agreement
contains the entire agreement of the parties relating to the subject matter
hereof.

            6. Successors; Binding Agreement.

                  (a) This First Amendment to Employment Agreement shall inure
to the benefit of and be binding on Bancorp and the Bank and any of their
successors or permitted assigns.

                  (b) This First Amendment to Employment Agreement shall inure
to the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, heirs, distributees, devisees, and
legatees.

            7. Applicable Law. This Agreement shall be governed by and construed
in accordance with the domestic, internal laws of the Commonwealth of
Pennsylvania, without regard to its conflicts of laws principles.

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<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

                                   FIRST LEESPORT BANCORP, INC.

                                   By  /s/  Jenette L. Eck
                                     -------------------------------------------

                                   Attest:  /s/  Lori A. Heyer
                                          --------------------------------------

                                                      ("Bancorp")

                                   LEESPORT BANK

                                   By  /s/  Jenette L. Eck
                                     -------------------------------------------

                                   Attest:  /s/  Lori A. Heyer
                                          --------------------------------------

                                                        ("Bank")

Witness:

  /s/  Lori A. Heyer               /s/  Raymond H. Melcher, Jr.
--------------------------        ----------------------------------------------
                                           Raymond H. Melcher, Jr.

                                                  ("Executive")

                                       3
<PAGE>

                                    EXHIBIT A

                              EMPLOYMENT AGREEMENT

            THIS AGREEMENT, made as of the 15th day of June 1998, among FIRST
LEESPORT BANCORP, INC. ("Bancorp"), a Pennsylvania business corporation having a
place of business at 133 North Centre Avenue, Leesport, Pennsylvania, THE FIRST
NATIONAL BANK OF LEESPORT ("Bank"), a national banking association having a
place of business at 133 North Centre Avenue, Leesport, Pennsylvania, and
RAYMOND H. MELCHER, JR. ("Executive"), an individual residing at 118 Durham
Drive, Wyomissing, Pennsylvania.

                                   WITNESSETH:

            WHEREAS, Bank is the wholly owned banking subsidiary of Bancorp;

            WHEREAS, Bancorp and Bank desire to employ Executive to serve in the
capacity of President and Chief Executive Officer of each of Bancorp and Bank on
the terms and conditions set forth herein;

            WHEREAS, Executive desires to accept employment with Bancorp and
Bank on the terms and conditions set forth herein.

                                   AGREEMENT:

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

            1. Employment. Bancorp and Bank each hereby employ Executive, and
Executive hereby accepts employment with Bancorp and Bank, on the terms and
conditions set forth in this Agreement.

            2. Duties of Employee. Executive shall perform and discharge well
and faithfully such duties as an executive officer of Bancorp and of Bank as may
be assigned to Executive from time to time by the respective Boards of Directors
of Bancorp and of Bank. Executive shall be employed as President and Chief
Executive Officer of Bancorp and of Bank, and shall hold such other titles as
may be given to him from time to time by the respective Boards of Directors of
Bancorp and of Bank. Executive shall devote his full time, attention and
energies to the business of Bancorp and of Bank during the Employment Period (as
defined in Section 3 of this Agreement); provided, however, that this Section 2
shall not be construed as preventing Executive from (a) investing Executive's
personal assets in enterprises that do not compete with Bancorp or Bank or (b)
being involved in any other activity with the prior approval of the Board of
Directors of Bancorp and Bank.

            3. Term of Agreement.

                  (a) This Agreement shall be for a three (3) year period (the
"Employment Period") commencing on June 15, 1998 and ending on June 14, 2001;
provided, however, that the Employment Period shall be automatically extended on
June 15, 1999 and on June 15 of each subsequent year (the "Annual Renewal Date")
for a period ending three (3) years from each Annual Renewal Date unless either
party shall give written notice of nonrenewal to the other

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<PAGE>

party at least ninety (90) days prior to an Annual Renewal Date, in which event
this Agreement shall terminate at the end of the then existing Employment
Period.

                  (b) Notwithstanding the provisions of Section 3(a) of this
Agreement, this Agreement shall terminate automatically for Cause (as defined
herein) upon written notice from the Board of Directors of each of Bancorp and
Bank to Executive. As used in this Agreement, "Cause" shall mean any of the
following:

                        (i) Executive's conviction of or plea of guilty or nolo
      contendere to a felony, a crime of falsehood, or a crime involving moral
      turpitude, or the actual incarceration of Executive for a period of
      forty-five (45) consecutive days or more;

                        (ii) Executive's failure to follow the good faith lawful
      instructions of the Board of Directors of Bancorp or Bank with respect to
      its operations, following written notice of such instructions; or

                        (iii) Executive's willful failure to substantially
      perform Executive's duties to Bancorp or Bank, other than a failure
      resulting from Executive's incapacity because of physical or mental
      illness, which willful failure results in demonstrable material injury and
      damage to Bancorp or Bank.

If this Agreement is terminated for Cause, Executive's rights under this
Agreement shall cease as of the effective date of such termination.

                  (c) Notwithstanding the provisions of Section 3(a) of this
Agreement, this Agreement shall terminate automatically upon Executive's
voluntary termination of employment (other than in accordance with Section 5 of
this Agreement), retirement at Executive's election, or Executive's death, and
Executive's rights under this Agreement shall cease as of the date of such
voluntary termination, retirement at Executive's election, or death; provided,
however, that, if Executive dies after Executive delivers a Notice of
Termination (as defined in Section 5(a) of this Agreement), the provisions of
Section 13(b) of this Agreement shall apply.

                  (d) Notwithstanding the provisions of Section 3(a) of this
Agreement, this Agreement shall terminate automatically upon Executive's
disability and Executive's rights under this Agreement shall cease as of the
date of such termination; provided, however, that, if Executive becomes disabled
after Executive delivers a Notice of Termination (as defined in Section 5(a) of
this Agreement), Executive shall nevertheless be absolutely entitled to receive
all of the compensation and benefits provided for in, and for the term set forth
in, Section 6 of this Agreement. For purposes of this Agreement, disability
shall mean Executive's incapacitation by accident, sickness, or otherwise which
renders Executive mentally or physically incapable of performing the services
required of Executive for three hundred sixty (360) consecutive days.

                  (e) Executive agrees that, in the event his employment under
this Agreement is terminated, Executive shall concurrently resign as a director
of Bancorp or Bank, or any affiliate of Bancorp or Bank, if he is then serving
as a director of any of such entities.

            4. Employment Period Compensation.

                  (a) Salary. For services performed by Executive under this
Agreement, Bancorp and Bank shall pay Executive a salary, in the aggregate,
during the Employment Period,

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<PAGE>

at the rate of $150,000 per year, payable at the same times as salaries are
payable to other executive employees of Bancorp or of Bank. Bancorp and/or Bank
may, from time to time, increase Executive's salary, and any and all such
increases shall be deemed to constitute amendments to this Section 4(a) to
reflect the increased amounts, effective as of the date established for such
increases by the Board of Directors of Bancorp or of Bank or any committee of
such Boards in the resolutions authorizing such increases.

                  (b) Bonus. For services performed by Executive under this
Agreement, Bancorp and Bank shall pay Executive a bonus, in the aggregate,
during the Employment Period, in such amounts and at such times, annually, as is
provided in such executive incentive plan for Executive as shall be approved by
the Board of Directors of Bancorp and in effect from time to time. In addition,
Bancorp and/or Bank may, from time to time, pay such other bonus or bonuses to
Executive as Bancorp and/or Bank, in their sole discretion, deem appropriate.
The payment of any such bonuses shall not reduce or otherwise affect any other
obligation of Bancorp and/or Bank to Executive provided for in this Agreement.
Notwithstanding the foregoing, Executive shall be entitled to receive a cash
bonus relating to Executive's first full year of employment in an amount not to
exceed $25,000 upon the attainment of financial goals mutually agreed upon by
Executive and the Boards of Directors of Bancorp and Bank.

                  (c) Vacation. During the term of this Agreement, Executive
shall be entitled to paid annual vacation in accordance with the policies as
established from time to time by the Boards of Directors of Bancorp and Bank
plus such other personal or bonus days as may be set forth in the policies of
Bancorp and Bank. Executive shall not be entitled to receive any additional
compensation from Bancorp and Bank for failure to take a vacation, nor shall
Executive be able to accumulate unused vacation time from one year to the next,
except to the extent authorized by the Boards of Directors of Bancorp and Bank.

                  (d) Automobile. During the term of this Agreement, Bancorp and
Bank shall provide Executive with exclusive use of an automobile. Bancorp and
Bank shall be responsible and shall pay for all costs of insurance coverage,
repairs, maintenance and other operating and incidental expenses, including
license, fuel and oil. Bancorp and Bank shall provide Executive with a
replacement automobile at approximately the time Executive's automobile reaches
three (3) years of age or 50,000 miles, whichever is first, and approximately
every three (3) years or 50,000 miles thereafter, upon the same terms and
conditions.

                  (e) Employee Benefit Plans. During the term of this Agreement,
Executive shall be entitled to participate in and receive the benefits of any
pension or other retirement benefit plan, profit sharing, stock option, employee
stock ownership, or other plans, benefits and privileges given to employees and
executives of Bancorp and Bank, to the extent commensurate with his then
existing duties and responsibilities, as fixed by the Boards of Directors of
Bancorp and Bank, including without limitation enrollment in Bank's Supplemental
Executive Retirement Program (SERP). Bancorp and Bank shall not make any changes
in such plans, benefits or privileges which would adversely affect Executive's
rights or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of Bancorp and Bank and does not result in
a proportionately greater adverse change in the rights of or benefits to
Executive as compared with any other executive officer of Bancorp and Bank.
Nothing paid to Executive under any plan or arrangement presently in effect or
made available in the future shall be deemed to be in lieu of the salary payable
to Executive pursuant to Section 4(a) hereof.

                                       6
<PAGE>

                  (f) 1999 Stock Options. Bancorp agrees to prepare and submit
to its shareholders, in connection with its 1999 Annual Meeting of Shareholders,
a stock option plan providing for the grant of stock options to employees of
Bancorp and Bank. Executive shall be granted nonqualified stock options to
purchase 3,000 shares of common stock of Bancorp, effective upon the date of
shareholder approval of such plan, at an exercise price equal to the fair market
value of such shares on the date of grant. Such options shall be subject to a
three-year vesting provision, with 1/3 of the total number of options vesting on
the first annual anniversary of your employment with Bancorp and Bank and an
additional 1/3 of the total number of options vesting on each subsequent annual
anniversary date thereafter. Such options will provide for a term of ten years.

            5. Termination of Employment Following Change in Control.

                  (a) If a Change in Control (as defined in Section 5(b) of this
Agreement) shall occur and if thereafter, at any time during the term of this
Agreement, there shall be:

                        (i) any involuntary termination of Executive's
      employment (other than for the reasons set forth in Section 3(b) or 3(d)
      of this Agreement);

                        (ii) any reduction in Executive's title,
      responsibilities, including reporting responsibilities, or authority,
      including such title, responsibilities, or authority as such title,
      responsibilities, or authority may be increased from time to time during
      the term of this Agreement;

                        (iii) the assignment to Executive of duties inconsistent
      with Executive's office on the date of the Change in Control or as the
      same may be increased from time to time after the Change in Control;

                        (iv) any reassignment of Executive to a location greater
      than twenty-five (25) miles from the location of Executive's office on the
      date of the Change in Control;

                        (v) any reduction in Executive's annual base salary in
      effect on the date of the Change in Control or as the same may be
      increased from time to time after the Change in Control;

                        (vi) any failure to continue Executive's participation
      in any of Bancorp's incentive compensation or bonus plans in which
      Executive participated at the time of the Change in Control or any change
      or amendment to any provisions of any of such plans which would materially
      decrease the potential benefits to Executive under any of such plans;

                        (vii) any failure to provide Executive with benefits at
      least as favorable as those enjoyed by Executive under any of Bancorp's
      retirement or pension, life insurance, medical, health and accident,
      disability or other employee plans in which Executive participated at the
      time of the Change in Control, or the taking of any action that would
      materially reduce any of such benefits in effect at the time of the Change
      in Control;

                                       7
<PAGE>

                        (viii) any requirement that Executive travel in
      performance of his duties on behalf of Bancorp or Bank for a significantly
      greater period of time during any year than was required of Executive
      during the year preceding the year in which the Change in Control
      occurred;

                        (ix) any sustained pattern of interruption or disruption
      of Executive for matters substantially unrelated to Executive's discharge
      of Executive's duties on behalf of Bancorp; or

                        (x) any breach of this Agreement of any nature
      whatsoever on the part of Bancorp or Bank;

then, at the option of Executive, exercisable by Executive within one hundred
twenty (120) days of the occurrence of any of the foregoing events, Executive
may resign from employment with Bancorp and Bank (or, if involuntarily
terminated, give notice of intention to collect benefits under this Agreement)
by delivering a notice in writing (the Notice of Termination") to Bancorp and
Bank and the provisions of Section 6 of this Agreement shall apply.

                  (b) As used in this Agreement, "Change in Control" shall mean
the occurrence of any of the following:

                        (i) (A) a merger, consolidation, or division involving
      Bancorp, (B) a sale, exchange, transfer, or other disposition of
      substantially all of the assets of Bancorp, or (C) a purchase by Bancorp
      of substantially all of the assets of another entity, unless (x) such
      merger, consolidation, division, sale, exchange, transfer, purchase or
      disposition is approved in advance by eighty percent (80%) or more of the
      members of the Board of Directors of Bancorp who are not interested in the
      transaction and (y) a majority of the members of the Board of Directors of
      the legal entity resulting from or existing after any such transaction and
      of the Board of Directors of such entity's parent corporation, if any, are
      former members of the Board of Directors of Bancorp; or

                        (ii) any other change in control of Bancorp similar in
      effect to any of the foregoing.

            6. Rights in Event of Termination of Employment Following Change in
Control.

                  (a) In the event that Executive delivers a Notice of
Termination (as defined in Section 5(a) of this Agreement) to Bancorp and Bank,
Executive shall be absolutely entitled to receive the compensation and benefits
set forth below:

                        (i) If, at the time of termination of Executive's
      employment, a "Tax Change" (as defined in Section 6(a)(iii) of this
      Agreement) has also occurred, Bancorp and Bank shall make, in the
      aggregate, a lump-sum cash payment to Executive no later than thirty (30)
      days following the date of such termination in an amount ("X") determined
      pursuant to the following formula: X = (2.99A - B) x (1 + C)D.

      For the purpose of the foregoing formula,

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<PAGE>

      A =   Executive's base amount, determined pursuant to Section
            28OG(b)(3)(A) of the Internal Revenue Code of 1986, as amended (the
            "Code");

      B =   the present value of all other amounts which qualify as parachute
            payments under Code Section 28OG(b)(2)(A) or (B) (without regard to
            the provisions of Code Section 28OG(b)(2)(A)(ii)), such present
            value to be determined pursuant to the provisions of Code Section
            28OG;

      C =   120% times 0.5 times the lowest of the semiannual applicable
            federal rates (determined pursuant to Code Section 1274(d)) in
            effect on the date of the "Tax Change"; and

      D =   the number of whole semiannual periods plus any fraction of a
            semiannual period from the later of the date of the "Tax Change" or
            the Change in Control to the date of termination of Executive's
            employment.

Notwithstanding the foregoing or any other provision of this Agreement to the
contrary, if the amount determined under "B" above equals or exceeds 2.99 times
the amount determined under "A" above, no payment shall be made to Executive
under this Section 6, nor shall Executive be required to make any payment to
Bancorp or Bank.

                        (ii) If, at the time of termination of Executive's
      employment, a "Tax Change" has not occurred, Bancorp shall make a lump-sum
      cash payment to Executive no later than thirty (30) days following the
      date of such termination in an amount equal to (A) 2.99 times the lesser
      of (I) Executive's base amount determined pursuant to the principles set
      forth in the regulations promulgated under Code Section 28OG(b)(3)(A) and
      as though a "Tax Change" had occurred on the date of Executive's
      termination of employment and (II) Executive's base amount so determined
      but as though a "Tax Change" will occur in the calendar year following the
      date of Executive's termination of employment, minus (B) any other amounts
      paid or payable within thirty (30) days following Executive's termination
      of employment which would constitute (or be presumed to constitute)
      parachute payments under Code Section 28OG(b)(2)(A) or (B) (without regard
      to the provisions of Code Section 28OG(b)(2)(A)(ii)) if a "Tax Change" had
      occurred on the date of such termination of employment.

                        (iii) For purposes of this Agreement, "Tax Change" means
      a change (A) in the ownership or effective control of Bancorp or (B) in
      the ownership of a substantial portion of the assets of Bancorp,
      determined pursuant to regulations promulgated under Section 28OG of the
      Code. Such term also means any similar change with respect to Bank or an
      affiliate, to the extent provided in such regulations.

                        (iv) To the extent benefits become payable under Section
      6(a)(i) or Section 6(a)(ii) by reason of Executive's termination of
      employment on or after his attainment of age 62-1/2, the following amount,
      if less than the amount calculated under the relevant section, shall be
      paid within thirty (30) days of such termination in lieu of the amount
      otherwise payable:

                                       9
<PAGE>

                                                          Percentage of Basic
      If Termination Occurs                               Compensation Payable
      ---------------------                               --------------------

      On or after age 62-1/2 but before age 63                    250%
      On or after age 63 but before age 63-1/2                    200%
      On or after age 63-1/2 but before age 64                    150%
      On or after age 64 but before age 64-1/2                    100%
      On or after age 64-1/2 but before age 65                     50%
      On or after age 65                                            0%

      For purposes of this paragraph, the term "Basic Compensation" shall mean
      the sum of (A) Executive's highest annualized base salary within the three
      (3) years immediately preceding termination of employment, and (B)
      Executive's highest amount of bonuses paid or accrued with respect to the
      three (3) calendar years immediately preceding such termination.

                  (b) Executive shall not be required to mitigate the amount of
any payment provided for in this Section 6 by seeking other employment or
otherwise. The amount of payment or the benefit provided for in this Section 6
shall not be reduced by any compensation earned by Executive as the result of
employment by another employer or by reason of Executive's receipt of or right
to receive any retirement or other benefits after the date of termination of
employment or otherwise.

            7. Rights in Event of Termination of Employment Absent Change in
Control.

                  (a) In the event that Executive's employment is involuntarily
terminated by Bancorp and/or Bank without Cause and no Change in Control shall
have occurred at the date of such termination, Bancorp and Bank shall pay (or
cause to be paid), in the aggregate, to Executive in cash, within thirty (30)
days following termination, an amount equal to [3.0] times the Executive's base
salary in effect on the date of termination plus (ii) a portion of the bonus
otherwise payable to Executive for the year in which such termination occurs
pro-rated for the period of time Executive is employed during such year.
Notwithstanding the preceding sentence, in the event the lump sum payment
described in the preceding sentence, when added to all other amounts or benefits
provided to or on behalf of the Executive in connection with his termination of
employment, would result in the imposition of an excise tax under Code Section
4999, such lump-sum shall be retroactively (if necessary) reduced to the extent
necessary to avoid such imposition. Upon written notice to Executive, together
with calculations of Bancorp's independent auditors, Executive shall remit to
Bancorp the amount of the reduction plus such interest as may be necessary to
avoid the imposition of such excise tax.

                  (b) Executive shall not be required to mitigate the amount of
any payment provided for in this Section 7 by seeking other employment or
otherwise. The amount of payment or the benefit provided for in this Section 7
shall not be reduced by any compensation earned by Executive as the result of
employment by another employer or by reason of Executive's receipt of or right
to receive any retirement or other benefits after the date of termination of
employment or otherwise.

                  (c) To the extent benefits become payable under this Section 7
by reason of termination of Executive's employment on or after his attainment of
age 62-1/2, the amounts set forth in Section 6(a)(iv), if less than the amounts
payable under this Section 7, shall be paid

                                       10
<PAGE>

within thirty (30) days of such termination in lieu of the amount otherwise
payable under this Section 7.

                  (d) The amounts payable pursuant to this Section 7 shall
constitute Executive's sole and exclusive remedy in the event of involuntary
termination of Executive's employment by Bancorp and/or Bank in the absence of a
Change in Control.

            8. Covenant Not to Compete.

                  (a) Executive hereby acknowledges and recognizes the highly
competitive nature of the business of Bancorp and Bank and accordingly agrees
that, during and for the applicable period set forth in Section 8(c) hereof,
Executive shall not:

                        (i) be engaged, directly or indirectly, either for his
      own account or as agent, consultant, employee, partner, officer, director,
      proprietor, investor (except as an investor owning less than 5% of the
      stock of a publicly owned company) or otherwise of any person, firm,
      corporation, or enterprise engaged, in (1) the banking (including bank
      holding company) or financial services industry, or (2) any other activity
      in which Bancorp or any of its subsidiaries is engaged during the
      Employment Period, in any county in which, at any time during the
      Employment Period or at the date of termination of the Executive's
      employment, a branch, office or other facility of Bancorp or any of its
      subsidiaries is located, or in any county contiguous to such a county,
      including contiguous counties located outside of the Commonwealth of
      Pennsylvania (the "Non-Competition Area"); or

                        (ii) provide financial or other assistance to any
      person, firm, corporation, or enterprise engaged in (1) the banking
      (including bank holding company) or financial services industry, or (2)
      any other activity in which Bancorp or any of its subsidiaries is engaged
      during the Employment Period, in the Non-Competition Area.

                  (b) It is expressly understood and agreed that, although
Executive and Bancorp consider the restrictions contained in Section 8(a) hereof
reasonable for the purpose of preserving for Bancorp and its subsidiaries their
good will and other proprietary rights, if a final judicial determination is
made by a court having jurisdiction that the time or territory or any other
restriction contained in Section 8(a) hereof is an unreasonable or otherwise
unenforceable restriction against Executive, the provisions of Section 8(a)
hereof shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such other extent as such court may
judicially determine or indicate to be reasonable.

                  (c) The provisions of this Section 8 shall be applicable
commencing on the date of this Agreement and ending on one of the following
dates, as applicable:

                        (i) if Executive's employment terminates in accordance
      with the provisions of Section 3 (other than Section 3(b) relating to
      termination for Cause), the effective date of termination of employment;

                        (ii) if Executive's employment terminates in accordance
      with the provisions of Section 3(b) of this Agreement (relating to
      termination for Cause) or the Executive voluntarily terminates his
      employment other than in accordance with the

                                       11
<PAGE>

      provisions of Section 5 hereof, the first anniversary date of the
      effective date of termination of employment; or

                        (iii) if the Executive voluntarily terminates his
      employment in accordance with the provisions of Section 5 hereof, the
      effective date of termination of employment.

            9. Notices. Except as otherwise provided in this Agreement, any
notice required or permitted to be given under this Agreement shall be deemed
properly given if in writing and if mailed by registered or certified mail,
postage prepaid with return receipt requested, to Executive's residence, in the
case of notices to Executive, and to the principal executive offices of Bancorp
and Bank, in the case of notices to Bancorp and Bank.

            10. Waiver. No provision of this Agreement may be modified, waived,
or discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and an executive officer specifically designated
by the Boards of Directors of Bancorp and Bank. No waiver by either party hereto
at any time of any breach by the 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.

            11. Assignment. This Agreement shall not be assignable by any party,
except by Bancorp and Bank to any successor in interest to their respective
businesses.

            12. Entire Agreement. This Agreement contains the entire agreement
of the parties relating to the subject matter of this Agreement.

            13. Successors; Binding Agreement.

                  (a) Bancorp and Bank will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the businesses and/or assets of Bancorp and Bank to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Bancorp and Bank would be required to perform it if no such
succession had taken place. Failure by Bancorp and Bank to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
constitute a breach of this Agreement and the provisions of Section 3 of this
Agreement shall apply. As used in this Agreement, "Bancorp" and "Bank" shall
mean Bancorp and Bank as defined previously and any successor to their
respective businesses and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law or otherwise.

                  (b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees. If Executive should
die after a Notice of Termination is delivered by Executive, or following
termination of Executive's employment without Cause, and any amounts would be
payable to Executive under this Agreement if Executive had continued to live,
all such amounts shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee, or other designee, or, if there is no such
designee, to Executive's estate.

            14. Arbitration. Bancorp, Bank and Executive recognize that, in the
event a dispute should arise between them concerning the interpretation or
implementation of this

                                       12
<PAGE>

Agreement, lengthy and expensive litigation will not afford a practical
resolution of the issues within a reasonable period of time. Consequently, each
party agrees that all disputes, disagreements and questions of interpretation
concerning this Agreement are to be submitted for resolution, in Reading,
Pennsylvania, to the American Arbitration Association (the "Association") in
accordance with the Association's National Rules for the Resolution of
Employment Disputes or other applicable rules then in effect ("Rules"). Bancorp
and Bank or Executive may initiate an arbitration proceeding at any time by
giving notice to the other in accordance with the Rules. Bancorp and Bank and
Executive, may, as a matter of right, mutually agree on the appointment of a
particular arbitrator from the Association's pool. The arbitrator shall not be
bound by the rules of evidence and procedure of the courts of the Commonwealth
of Pennsylvania but shall be bound by the substantive law applicable to this
Agreement. The decision of the arbitrator, absent fraud, duress, incompetence or
gross and obvious error of fact, shall be final and binding upon the parties and
shall be enforceable in courts of proper jurisdiction. Following written notice
of a request for arbitration, Bancorp, Bank and Executive shall be entitled to
an injunction restraining all further proceedings in any pending or subsequently
filed litigation concerning this Agreement, except as otherwise provided herein.

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

            16. Applicable Law. This Agreement shall be governed by and
construed in accordance with the domestic, internal laws of the Commonwealth of
Pennsylvania, without regard to its conflicts of laws principles.

            17. Headings. The section headings of this Agreement are for
convenience only and shall not control or affect the meaning or construction or
limit the scope or intent of any of the provisions of this Agreement.

                                       13
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

                                   FIRST LEESPORT BANCORP, INC.

                                   By  /s/ John T. Connelly               (SEAL)
                                     -------------------------------------

                                   Attest:  /s/ Jenette L. Eck
                                          --------------------------------------

                                                       "Bancorp"

                                   FIRST NATIONAL BANK OF LEESPORT

                                   By  /s/ John T. Connelly               (SEAL)
                                     -------------------------------------

                                   Attest:  /s/  Raymond H. Melcher, Jr.
                                          --------------------------------------

                                                         "Bank"

Witness:

/s/ Loren Burkey                    /s/ Raymond H. Melcher, Jr.           (SEAL)
---------------------------        ---------------------------------------
                                           Raymond H. Melcher, Jr.

                                                 "Executive"

                                       14

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