Document:

EXHIBIT 10.12

                       EMPLOYMENT AGREEMENT

          THIS AGREEMENT, made as of the 1st day of October,
1999, among FIRST LEESPORT BANCORP, INC. ("Bancorp"), a
Pennsylvania business corporation having a place of business at
133 North Centre Avenue, Leesport, Pennsylvania, FIRST LEESPORT
INVESTMENT GROUP, INC. ("FLIG"), a Pennsylvania corporation
having a place of business at 560 Van Reed Road, Suite 308,
Wyomissing, Pennsylvania, FIRST LEESPORT WEALTH MANAGEMENT, INC.
("FLWM"), a Pennsylvania corporation having a place of business
at 560 Van Reed Road, Suite 308, Wyomissing, Pennsylvania, and
KEITH W. JOHNSON ("Executive"), an adult individual.

                           WITNESSETH:

          WHEREAS, FLIG and FLWM are direct or indirect wholly-
owned subsidiaries of Bancorp;

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

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

                           AGREEMENT:

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

          1.   Employment.  FLIG and FLWM each hereby employ
Executive, and Executive hereby accepts employment with FLIG and
FLWM 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 FLIG and of FLWM as may be reasonably assigned to
Executive from time to time by the respective Boards of
Directors of FLIG and of FLWM consistent with his position,
including management responsibility for the Investment Division
of Bancorp's affiliated companies.  Executive shall be employed
as President and Chief Executive Officer of FLIG and of FLWM,
and shall hold such other titles as may be given to him from
time to time by the respective Boards of Directors of Bancorp,
FLIG or FLWM.  Executive shall devote his full time, attention
and energies to the business of FLIG and of FLWM 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, Bank,
FLIG or FLWM, (b) participating in service opportunities within
SunAmerica Securities, Inc., such as the Management Advisory
Counsel and National Education Committee, provided that such
activities do not unreasonably interfere with Executive's
responsibilities to Bancorp, FLIG or FLWM, (c) serving as an
adjunct professor at the Philadelphia College of Bible provided
that such activities do not unreasonably interfere with
Executive's responsibilities to Bancorp, FLIG or FLWM, or
(d) being involved in any other activity with the prior approval
of the Board of Directors of Bancorp.

          3.  Term of Agreement.

               (a)  This Agreement shall be for a three (3) year
period (the "Employment Period") commencing on October 1, 1999
and ending on September 30, 2002; provided, however, that the
Employment Period shall be automatically extended on October 1,
2000 and on October 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.

               (b)  Notwithstanding the provisions of
Section 3(a) of this Agreement, this Agreement shall terminate
automatically for Cause (as defined below) upon written notice
from the Board of Directors of either Bancorp, FLIG or FLWM 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 at least
     30 days or more; or

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

                    (iii)  Executive's willful failure to
     substantially perform Executive's duties to FLIG or FLWM,
     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, FLIG or FLWM; or

                    (iv)  Executive's failure to maintain any
     license necessary to perform services under this Agreement
     or Executive's intentional violation of any material
     provision of this Agreement; or

                    (v)  dishonesty or gross negligence of the
     Executive in the performance of his duties; or

                    (vi)  conduct on the part of the Executive
     which brings public discredit to Bancorp, FLIG or FLWM; or

                    (vii)  Executive's breach of fiduciary duty
     involving personal profit involving Executive's employment
     or which results in demonstrable material injury to
     Bancorp, FLIG, or FLWM; or

                    (viii)  Executive's removal or prohibition
     from being an institution-affiliated party by a final order
     of an appropriate federal banking agency pursuant to
     Section 8(e) of the Federal Deposit Insurance Act or by the
     Pennsylvania Department of Banking pursuant to state law.

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, except for provisions which by
their terms extend beyond termination 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 15(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 a period of six (6) consecutive
months.

               Executive agrees that, in the event his
employment under this Agreement terminates for any reason,
Executive shall concurrently resign as a director of Bancorp,
Bank, FLIG, FLWM, and any affiliate thereof, 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, FLIG or FLWM shall pay Executive
a salary, in the aggregate, at the rate of Two Hundred Thousand
Dollars ($200,000.00) per year, payable at the same times as
salaries are payable to other executive employees of Bancorp.
Subsequent to September 30, 2002, FLIG or FLWM 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 FLIG or of FLWM or any committee of such Boards in
the resolutions authorizing such increases.

               (a)  Bonus.  For services performed by Executive
under this Agreement, Executive may be entitled to receive a
bonus based upon the attainment of certain goals, which goals
will be agreed upon annually by Executive and the Board of
Directors of Bancorp.  The payment of any such bonuses shall not
reduce or otherwise affect any other obligation of Bancorp, FLIG
or FLWM to Executive provided for in this Agreement.

               (b)  Vacation.  During the term of this
Agreement, Executive shall be entitled to paid annual vacation
in accordance with the policies established for senior
executives of Bancorp. Executive shall not be entitled to
receive any additional compensation from Bancorp, FLIG, or FLWM
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.

               (d)  Automobile.  During the term of this
Agreement, Executive shall be provided with exclusive use of an
automobile equivalent in type to Executive's automobile on the
date of this Agreement.  FLIG and FLWM 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.  Executive shall be provided
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.  Executive agrees that all of the equity in his
existing automobile on the date of this Agreement shall be
applied to reduce the purchase price or the lease amount on the
first automobile to be provided for Executive's use pursuant to
this paragraph.

               (e)  Employee Benefit Plans.  Executive shall
initially be entitled to participate in and receive the benefits
of any employee benefit plan in effect for employees of Johnson
Financial Group, Inc. ("JFG") immediately prior to the merger of
JFG with a subsidiary of Bancorp until such time that the Board
of Directors of Bancorp authorizes a change in such benefits.
Executive shall be entitled to participate in and receive the
benefits of any employee benefit plan in effect for employees of
Bancorp or its affiliates to the extent required by the terms of
any of such plans.  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.

               (f)  1999 Stock Options.  Executive shall be
eligible to participate in Bancorp's stock option plan.
Concurrently with the execution of this Agreement,  Executive
shall receive a grant of nonqualified stock options to purchase
3,000 shares of Bancorp common stock at an exercise price equal
to the fair market value of a share of Bancorp common stock on
the date of grant.  Such options shall be subject to a five-year
vesting provision, with 1/5 of the total number of options
vesting on the first annual anniversary of Executive's
employment and an additional 1/5 of the total number of options
vesting on each subsequent annual anniversary date thereafter;
provided, however, that such options shall provide for immediate
vesting in the event that Executive's employment is terminated
by Bancorp, FLIG or FLWM without Cause or Executive terminates
his employment in accordance with the provisions of Section 5.
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)  a change, without Executive's prior
     written consent, in any significant respect in Executive's
     authority, duties or other terms or conditions of
     Executive's employment as the same exist on the date of the
     Change in Control or as the same may be increased from time
     to time after the Change in Control;

                    (ii)  any reassignment of Executive to a
     location greater than fifty (50) miles from the location of
     Executive's office on the date of the Change in Control;

                    (iii)  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;

                    (iv)  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, except for any
     reductions in benefits or other actions resulting from
     changes to or reductions in benefits applicable to all
     employees generally; or

                    (vi)  any requirement that Executive travel
     in performance of his duties on behalf of Bancorp, FLIG or
     JFG 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;

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
FLIG and JFG (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
FLIG and JFG 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, FLIG, or FLWM, (B) a sale, exchange,
transfer, or other disposition of substantially all of the
assets of Bancorp, FLIG, or FLWM, 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
seventy percent (70%) 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, FLIG, or FLWM; 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 Changes in Control.

               (a)  In the event that Executive delivers a
Notice of Termination (as defined in Section 5(a) of this
Agreement), Executive shall be absolutely entitled to receive a
lump-sum cash payment no later than thirty (30) days following
the date of such termination in an amount equal to and no
greater than two (2.0) times Executive's annual base salary, as
set forth in Section 4(a), in effect on the date of termination
of employment.

               (b)  Notwithstanding the foregoing, if any
portion of the payment due pursuant to this Section 6 is found
to violate any of the proscriptions in Section 359 of the
Federal Deposit Insurance Corporation rules and regulations,
then neither Bancorp, FLIG or JFG shall be obligated to make any
such payment found to violate such proscriptions.

               (c)  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 be reduced
dollar-for-dollar by any other compensation to be received by
Executive at any time during the twelve (12) month period
following delivery of the Notice of Termination.

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

               (a)  In the event that Executive's employment is
involuntarily terminated without Cause and no Change in Control
shall have occurred at the date of such termination, Bancorp,
FLIG or JFG shall pay (or cause to be paid), in the aggregate,
to Executive in cash, an amount equal to the Executive's annual
base salary (with deductions not to exceed those required by
law) in effect on the date of termination for the greater of
(i) the remainder of the then existing Employment Term or
(ii) twenty-six (26) weeks, paid at the same intervals as the
salary is payable under Section 4(a).  Notwithstanding the
preceding sentence, in the event that the payments 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 sum
would 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 benefits provided for in this Section 7 shall be reduced
dollar-for-dollar by any other compensation to be received by
Executive during the period in which Executive is receiving
payments under Section 7(a) as the result of Executive's
employment by another employer.

               (c)  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, FLIG and/or FLWM 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, FLIG
and FLWM 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), securities brokerage,
     financial advisory 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,
     FLIG, FLWM or any of their respective 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),
     securities brokerage, financial advisory 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 voluntarily terminates his
     employment (other than in accordance with the provisions of
     Section 5 hereof) or Executive's employment is terminated
     for Cause (as defined in Section 3(b), the longer of
     (i) the ending date of the then existing Employment Period
     or (ii) twelve (12) months from the date of Executive's
     termination of employment;

                    (ii)  if Executive voluntarily terminates
     his employment in accordance with the provisions of
     Section 5, the effective date of termination of Executive's
     employment;

                    (iii)  if Executive's employment is
     involuntarily terminated in accordance with the provisions
     of Section 7, the effective date of termination of
     Executive's employment; or

                    (iv)  if Executive's employment terminates
     as a result of delivery of a notice of nonrenewal by
     Bancorp in accordance with Section 3(a), the ending date of
     the then existing Employment Period; or

                    (v)  if Executive's employment terminates as
     a result of delivery of a notice of nonrenewal by Executive
     in accordance with Section 3(a), twelve (12) months from
     the end of the then existing Employment Period.

          9.   Unauthorized Disclosure.  During the term of his
employment hereunder, or at any later time, Executive shall not,
without the written consent of the Board of Directors of the
Bancorp, or a person authorized thereby, knowingly disclose to
any person, other than an employee of Bancorp, FLIG or FLWM or a
person to whom disclosure is reasonably necessary or appropriate
in connection with the performance by Executive of his duties
hereunder, any material confidential information obtained by him
while in the employ of Bancorp, FLIG or FLWM with respect to any
of Bancorp's, FLIG's or FLWM's or any of their respective
affiliates' services, products, improvements, formulas, designs
or styles, processes, customers, methods of business or any
business practices the disclosure of which could be or would be
damaging to Bancorp, FLIG or FLWM, or any such affiliate
provided, however, that confidential information shall not
include any information known generally to the public (other
than as a result of unauthorized disclosure by Executive or any
person with the assistance, consent, or direction of Executive),
or any information that must be disclosed as required by law.
Subject to the nonsolicitation provisions of Section 10, this
Section 9 shall not be deemed to prohibit Executive from
utilizing or disclosing information with respect to customers of
Johnson Financial Group, Inc. or KRJ & Associates existing on
the date of this Agreement.

          10.  Nonsolicitation of Customers and Employees.
Executive hereby agrees that he shall not during any period that
he is subject to the provisions of Section 8, directly or
indirectly, (i) solicit any customer of Bancorp, FLIG or FLWM or
any affiliate of Bancorp for any banking, securities brokerage,
investment, advising, insurance or other services then being
offered by any of such entities or (ii) solicit or hire any
persons who were at any time employees of the Bancorp, FLIG or
FLWM or any other affiliate of Bancorp except for former
employees of JFG.  Executive also agrees that he shall not at
any time encourage or induce any of such customers or employees,
except for former employees of JFG, of Bancorp, FLIG or FLWM or
any affiliate of Bancorp to terminate their relationship with
any of such entities.

          11.  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, FLIG and FLWM, in the case of notices to Bancorp,
FLIG or FLWM.

          12.  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, FLIG and FLWM.  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 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.

          13.  Assignment. This Agreement shall not be
assignable by any party, except by Bancorp, FLIG or FLWM to any
successor in interest to their respective businesses.

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

          15.  Successors; Binding Agreement.

               (a)  Bancorp, FLIG and FLWM 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, FLIG and FLWM to expressly
assume and agree to perform this Agreement in the same manner
and to the same extent that Bancorp, FLIG and FLWM would be
required to perform it if no such succession had taken place.
Failure by Bancorp, FLIG and FLWM to obtain such assumption and
agreement prior to the effectiveness of any such succession
shall constitute a breach of this Agreement.  As used in this
Agreement, "Bancorp," "FLIG" and "FLWM" shall mean Bancorp, FLIG
and FLWM 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.

          16.  Arbitration.  Bancorp, FLIG, FLWM and Executive
recognize that, in the event a dispute should arise between them
concerning the interpretation or implementation of this
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, FLIG and
FLWM or Executive may initiate an arbitration proceeding at any
time by giving notice to the other in accordance with the Rules.
Bancorp, FLIG, FLWM 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, FLIG, FLWM 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.

          17.  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.

          18.  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.

          19.  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.

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

                             FIRST LEESPORT BANCORP, INC.

                             By /s/Raymond H. Melcher, Jr.(SEAL)
                                    Raymond H. Melcher, Jr.

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

                                         ("Bancorp")

                             FIRST LEESPORT WEALTH MANAGEMENT,
                             INC.

                             By /s/Raymond H. Melcher, Jr.(SEAL)
                                    Raymond H. Melcher, Jr.

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

                                           ("FLWM")

                             FIRST LEESPORT INVESTMENT GROUP,
                             INC.

                             By /s/Raymond H. Melcher, Jr.(SEAL)
                                    Raymond H. Melcher, Jr.

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

                                           ("FLIG")

Witness:

/s/Gregory C. Hartman(SEAL)  /s/Keith W. Johnson    (SEAL)
Gregory C. Hartman           Keith W. Johnson

                                        ("Executive")

14<PAGE> 1

EXHIBIT 10.1   SOUTH JERSEY FINANCIAL CORPORATION, INC. 2000 STOCK OPTION PLAN

<PAGE> 2

                    SOUTH JERSEY FINANCIAL CORPORATION, INC.
                             2000 STOCK OPTION PLAN

1.    DEFINITIONS.
      -----------

      (a) "Affiliate" means any "parent corporation" or "subsidiary corporation"
of the Holding Company,  as such terms are defined in Sections 424(e) and 424(f)
of the Code.

      (b)  "Association"  means  South  Jersey  Savings  and  Loan  Association,
Turnersville, New Jersey.

      (c) "Award" means, individually or collectively, a grant under the Plan of
Non-Statutory Stock Options and Incentive Stock Options.

      (d) "Award Agreement" means an agreement  evidencing and setting forth the
terms of an Award.

      (e)  "Board of  Directors"  means the board of  directors  of the  Holding
Company.

      (f) "Change in Control" of the Holding  Company or the  Association  shall
mean an event of a nature  that (i) would be required to be reported in response
to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant  to Section  13 or 15(d) of the  Securities  Exchange  Act of 1934 (the
"Exchange  Act");  or (ii) results in a Change in Control of the  Association or
the Holding  Company within the meaning of the Home Owners' Loan Act of 1933, as
amended,  the  Federal  Deposit  Insurance  Act,  and the Rules and  Regulations
promulgated by the Office of Thrift Supervision (or its predecessor  agency), as
in effect on the date hereof  (provided,  that in  applying  the  definition  of
change in control as set forth under the rules and  regulations  of the OTS, the
Board shall  substitute  its  judgment  for that of the OTS);  or (iii)  without
limitation  such a Change in Control  shall be deemed to have  occurred  at such
time as (A) any "person" (as the term is used in Sections 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 voting  securities of the
Association or the Holding Company representing 20% or more of the Association's
or the Holding Company's  outstanding voting securities or right to acquire such
securities except for any voting securities of the Association  purchased by the
Holding Company and any voting securities purchased by any employee benefit plan
of the Holding  Company or its  Subsidiaries,  or (B) individuals who constitute
the Board on the date hereof  (the  "Incumbent  Board")  cease for any reason to
constitute  at least a majority  thereof,  provided  that any person  becoming a
director  subsequent to the date hereof whose election was approved by a vote of
at least  three-quarters  of the directors  comprising the Incumbent  Board,  or
whose  nomination for election by the Company's  stockholders  was approved by a
Nominating  Committee  solely  composed  of members  which are  Incumbent  Board
members, shall be, for purposes of this clause (B), considered as though he were
a  member  of the  Incumbent  Board,  or (C) a plan of  reorganization,  merger,
consolidation, sale of all or substantially all the assets of the Association or
the Holding Company or similar transaction occurs or is effectuated in which the
Association or Holding Company is not the resulting entity;  provided,  however,
that such an event listed above will be deemed to have  occurred or to have been
effectuated  upon the receipt of all required federal  regulatory  approvals not
including the lapse of any statutory  waiting periods,  or (D) a proxy statement
has  been  distributed  soliciting  proxies  from  stockholders  of the  Holding
Company,  by someone other than the current  management of the Holding  Company,
seeking   stockholder   approval  of  a  plan  of   reorganization,   merger  or
consolidation   of  the  Holding  Company  or  Association   with  one  or  more
corporations  as a result  of  which  the  outstanding  shares  of the  class of
securities  then  subject  to such  plan or  transaction  are  exchanged  for or
converted into cash or property or securities  not issued by the  Association or
the Holding Company shall be distributed,  or (E) a tender offer is made for 20%
or more of the voting  securities  of the  Institution  or Holding  Company then
outstanding.

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

<PAGE> 3

      (h) "Committee" means the committee  designated by the Board of Directors,
pursuant to Section 2 of the Plan, to administer the Plan.

      (i) "Common  Stock"  means the Common  Stock of the Holding  Company,  par
value, $.01 per share.

      (j)   "Date of Grant" means the effective date of an Award.

      (k)  "Disability"  means any mental or physical  condition with respect to
which the Participant  qualifies for and receives benefits for under a long-term
disability  plan of the Holding  Company or an  Affiliate,  or in the absence of
such a long-term  disability  plan or coverage  under such a plan,  "Disability"
shall mean a physical or mental  condition  which, in the sole discretion of the
Committee,   is  reasonably  expected  to  be  of  indefinite  duration  and  to
substantially   prevent  the   Participant   from   fulfilling   his  duties  or
responsibilities to the Holding Company or an Affiliate.

      (l) "Effective  Date" means the date the Plan is approved by  shareholders
of the Holding Company.

      (m)  "Employee"  means any person  employed by the  Holding  Company or an
Affiliate.  Directors  who are  employed by the Holding  Company or an Affiliate
shall be considered Employees under the Plan.

      (n)  "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      (o) "Exercise Price" means the price at which a Participant may purchase a
share of Common Stock pursuant to an Option.

      (p) "Fair Market Value" means the market price of Common Stock, determined
by the Committee as follows:

            (i)   If the Common  Stock was traded on the date in question on The
                  Nasdaq  Stock Market then the Fair Market Value shall be equal
                  to the closing price reported for such date;

            (ii)  If the Common Stock was traded on a stock exchange on the date
                  in question,  then the Fair Market Value shall be equal to the
                  closing   price   reported   by   the   applicable   composite
                  transactions report for such date; and

            (iii) If neither of the foregoing provisions is applicable, then the
                  Fair Market Value shall be determined by the Committee in good
                  faith on such basis as it deems appropriate.

      Whenever possible, the determination of Fair Market Value by the Committee
shall  be  based  on  the  prices  reported  in The  Wall  Street  Journal.  The
                                                --------------------------
Committee's  determination  of Fair Market Value shall be conclusive and binding
on all persons.

      (q)   "Holding Company" means South Jersey Financial Corporation, Inc.

      (r)   "Incentive   Stock  Option"  means  a  stock  option  granted  to  a
Participant,  pursuant  to Section 7 of the Plan,  that is  intended to meet the
requirements of Section 422 of the Code.

      (s)  "Non-Statutory  Stock  Option"  means a  stock  option  granted  to a
Participant  pursuant  to the terms of the Plan but which is not  intended to be
and is not  identified  as an Incentive  Stock Option or a stock option  granted
under the Plan which is intended to be and is identified  as an Incentive  Stock
Option but which does not meet the requirements of Section 422 of the Code.

      (t)  "Option"  means an  Incentive  Stock  Option or  Non-Statutory  Stock
Option.

                                       A-2

<PAGE> 4

      (u) "Outside  Director" means a member of the board(s) of directors of the
Holding  Company or an  Affiliate  who is not also an  Employee  of the  Holding
Company or an Affiliate.

      (v)   "Participant" means any person who holds an outstanding Award.

      (w) "Performance  Award" means an Award granted to a Participant  pursuant
to Section 8 of the Plan.

      (x) "Plan"  means this  South  Jersey  Financial  Corporation,  Inc.  2000
Stock-Option Plan.

      (y) "Retirement" means retirement from employment with the Holding Company
or an Affiliate in accordance with the then current  retirement  policies of the
Holding  Company or  Affiliate,  as  applicable.  Notwithstanding  the foregoing
"Retirement" shall include termination of employment (other than Termination for
Cause) under which the Participant  would qualify for normal or early retirement
under the money purchase pension plan sponsored by the Association, as in effect
on the Effective Date.  "Retirement"  with respect to an Outside  Director means
the termination of service from the board(s) of directors of the Holding Company
and any Affiliate  following written notice to such board(s) of directors of the
Outside Director's intention to retire.

      (z)  "Termination   for  Cause"  shall  mean  termination   because  of  a
Participant's personal dishonesty,  incompetence,  willful misconduct, breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations  or similar  offenses)  or material  breach of any  provision  of any
employment  agreement  between the Holding  Company and/or any subsidiary of the
Holding Company and a Participant.

      (aa)  "Trust"  means a trust  established  by the  Board of  Directors  in
connection  with  this  Plan to hold  Common  Stock  or other  property  for the
purposes set forth in the Plan.

      (bb)  "Trustee"  means  any  person  or  entity  approved  by the Board of
Directors or its designee(s) to hold any of the Trust assets.

2.    ADMINISTRATION.
      --------------

      (a) The Committee  shall  administer the Plan. The Committee shall consist
of two or more  disinterested  directors  of the Holding  Company,  who shall be
appointed by the Board of Directors. A member of the Board of Directors shall be
deemed to be  "disinterested"  only if he satisfies (i) such requirements as the
Securities  and Exchange  Commission  may establish for  non-employee  directors
administering  plans intended to qualify for exemption  under Rule 16b-3 (or its
successor)  under the  Exchange Act and (ii) such  requirements  as the Internal
Revenue Service may establish for outside  directors acting under plans intended
to qualify for exemption  under Section  162(m)(4)(C)  of the Code. The Board of
Directors  may also  appoint  one or more  separate  committees  of the Board of
Directors,  each composed of one or more directors of the Holding  Company or an
Affiliate who need not be  disinterested,  that may grant Awards and  administer
the Plan with respect to Employees and Outside  Directors who are not considered
officers or directors of the Holding  Company  under  Section 16 of the Exchange
Act or for whom Awards are not  intended to satisfy  the  provisions  of Section
162(m) of the Code.

      (b) The Committee shall (i) select the Employees and Outside Directors who
are to receive Awards under the Plan, (ii) determine the type,  number,  vesting
requirements  and other features and conditions of such Awards,  (iii) interpret
the Plan and Award  Agreements in all respects and (iv) make all other decisions
relating to the  operation of the Plan.  The  Committee  may adopt such rules or
guidelines  as it deems  appropriate  to  implement  the Plan.  The  Committee's
determinations under the Plan shall be final and binding on all persons.

      (c)  Each  Award  shall  be  evidenced  by  a  written  agreement  ("Award
Agreement")  containing  such  provisions  as may be  required  by the  Plan and
otherwise  approved by the Committee.  Each Award Agreement  shall  constitute a
binding   contract   between  the  Holding  Company  or  an  Affiliate  and  the
Participant, and every Participant,

                                     A-3

<PAGE> 5

upon  acceptance  of an  Award  Agreement,  shall  be  bound  by the  terms  and
restrictions  of the Plan  and the  Award  Agreement.  The  terms of each  Award
Agreement  shall be in accordance  with the Plan,  but each Award  Agreement may
include any additional provisions and restrictions  determined by the Committee,
in its discretion, provided that such additional provisions and restrictions are
not inconsistent with the terms of the Plan. In particular and at a minimum, the
Committee  shall  set  forth  in each  Award  Agreement:  (i) the  type of Award
granted;  (ii) the  Exercise  Price of any  Option;  (iii) the  number of shares
subject to the Award;  (iv) the  expiration  date of the Award;  (v) the manner,
time,  and rate  (cumulative or otherwise) of exercise or vesting of such Award;
and (vi) the restrictions,  if any, placed upon such Award, or upon shares which
may be issued upon  exercise of such Award.  The Chairman of the  Committee  and
such other  directors  and officers as shall be  designated  by the Committee is
hereby  authorized  to execute  Award  Agreements on behalf of the Company or an
Affiliate and to cause them to be delivered to the recipients of Awards.

      (d) The Committee may delegate all authority for: (i) the determination of
forms of payment to be made by or received by the Plan and (ii) the execution of
any   Award   Agreement.   The   Committee   may   rely  on  the   descriptions,
representations,  reports and estimates  provided to it by the management of the
Holding  Company or an Affiliate for  determinations  to be made pursuant to the
Plan,  including the  satisfaction  of any  conditions  of a Performance  Award.
However,  only the  Committee  or a portion of the  Committee  may  certify  the
attainment  of any  conditions of a  Performance  Award  intended to satisfy the
requirements of Section 162(m) of the Code.

3.    TYPES OF AWARDS AND RELATED RIGHTS.
      ----------------------------------

      The following Awards may be granted under the Plan:

      (a)   Non-Statutory Stock Options.
      (b)   Incentive Stock Options.

4.    STOCK SUBJECT TO THE PLAN.
      -------------------------

      Subject to adjustment as provided in Section 13 of the Plan, the number of
shares  reserved  for Options  under the Plan is  379,343.  The shares of Common
Stock issued  under the Plan may be either  authorized  but  unissued  shares or
authorized shares previously issued and acquired or reacquired by the Trustee or
the Holding Company,  respectively. To the extent that Options are granted under
the Plan, the shares  underlying  such Awards will be unavailable  for any other
use  including  future  grants  under the Plan except  that,  to the extent that
Options  terminate,  expire or are  forfeited  without  having vested or without
having been exercised,  new Awards may be made with respect to these shares.  No
Employee may be granted an Option  under this Plan to purchase  more than 25% of
all shares of Common Stock available under this Plan. No outside Director may be
granted  an Option  under  this Plan to  purchase  more than 5% of all shares of
Common Stock available under this Plan.

5.    ELIGIBILITY.
      -----------

      Subject to the terms of the Plan,  all  Employees  and  Outside  Directors
shall be eligible to receive Awards under the Plan.

6.    NON-STATUTORY STOCK OPTIONS.
      ---------------------------

      The  Committee  may,  subject  to the  limitations  of this  Plan  and the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant  Non-Statutory  Stock Options to eligible  individuals upon such
terms and conditions as it may determine to the extent such terms and conditions
are consistent with the following provisions:

                                     A-4

<PAGE> 6

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Non-Statutory Stock Option.  However,  the Exercise Price shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant.

      (b) Terms of  Non-statutory  Stock Options.  The Committee shall determine
          --------------------------------------
the term during which a Participant may exercise a  Non-Statutory  Stock Option,
but in no event may a Participant  exercise a  Non-Statutory  Stock  Option,  in
whole or in part, more than ten (10) years from the Date of Grant. The Committee
shall also determine the date on which each  Non-Statutory  Stock Option, or any
part  thereof,   first  becomes  exercisable  and  any  terms  or  conditions  a
Participant must satisfy in order to exercise each  Non-Statutory  Stock Option.
The shares of Common Stock  underlying  each  Non-Statutory  Stock Option may be
purchased in whole or in part by the  Participant at any time during the term of
such Non-Statutory Stock Option, or any portion thereof,  once the Non-Statutory
Stock Option becomes exercisable.

      (c)  Non-Transferability.  Unless otherwise determined by the Committee in
           -------------------
accordance  with this Section  6(c), a  Participant  may not  transfer,  assign,
hypothecate,  or  dispose  of in any  manner,  other than by will or the laws of
intestate succession,  a Non-Statutory Stock Option. The Committee may, however,
in its sole discretion,  permit transferability or assignment of a Non-Statutory
Stock Option if such transfer or assignment is, in its sole  determination,  for
valid estate  planning  purposes and such  transfer or  assignment  is permitted
under the Code and Rule 16b-3  under the  Exchange  Act.  For  purposes  of this
Section 6(c), a transfer for valid estate planning purposes includes, but is not
limited  to:  (a) a transfer  to a  revocable  intervivos  trust as to which the
Participant is both the settlor and trustee, (b) a transfer for no consideration
to: (i) any member of the Participant's  Immediate Family, (ii) any trust solely
for the  benefit of members of the  Participant's  Immediate  Family,  (iii) any
partnership  whose only  partners  are  members of the  Participant's  Immediate
Family,  and (iv) any limited  liability  corporation or corporate  entity whose
only members or equity owners are members of the Participant's Immediate Family,
or (c) a  transfer  to the  South  Jersey  Savings  Charitable  Foundation.  For
purposes  of  this  Section  6(c),  "Immediate  Family"  includes,  but  is  not
necessarily limited to, a Participant's parents, grandparents, spouse, children,
grandchildren,  siblings  (including half bothers and sisters),  and individuals
who are family members by adoption. Nothing contained in this Section 6(c) shall
be  construed  to require the  Committee to give its approval to any transfer or
assignment of any Non- Statutory Stock Option or portion  thereof,  and approval
to transfer or assign any Non-Statutory Stock Option or portion thereof does not
mean that such  approval  will be given with respect to any other  Non-Statutory
Stock Option or portion thereof. The transferee or assignee of any Non-Statutory
Stock Option shall be subject to all of the terms and  conditions  applicable to
such Non-Statutory  Stock Option immediately prior to the transfer or assignment
and shall be subject to any other  conditions  proscribed by the Committee  with
respect to such Non-Statutory Stock Option.

      (d)  Termination  of Employment  or Service  (General).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  upon the termination of a Participant's employment
or other service for any reason other than Retirement,  Disability, death, or as
a result of a Termination  for Cause,  the  Participant  may exercise only those
Non-Statutory Stock Options that were immediately exercisable by the Participant
at the  date of such  termination  and only for a  period  of three  (3)  months
following the date of such termination.

      (e) Termination of Employment or Service  (Retirement).  In the event of a
          --------------------------------------------------
Participant's   Retirement,   all  Non-Statutory   Stock  Options  held  by  the
Participant at the date of Retirement shall immediately  become  exercisable and
remain  exercisable  for a  period  of five  (5)  years  following  the  date of
Retirement.

      (f)  Termination of Employment or Service  (Disability  or death).  In the
           ------------------------------------------------------------
event of the termination of a  Participant's  employment or other service due to
Disability or death,  all  Non-Statutory  Stock Options held by such Participant
shall immediately become exercisable and remain exercisable for a period one (1)
year following the date of such termination.

      (g) Termination of Employment or Service  (Termination for Cause).  Unless
          -------------------------------------------------------------
otherwise  determined  by  the  Committee,  in  the  event  of  a  Participant's
Termination  for  Cause,  all rights  with  respect  to the  Participant's  Non-
Statutory Stock Options shall expire immediately upon the effective date of such
Termination for Cause.

                                     A-5

<PAGE> 7

      (h) Termination of Employment or Service (Change in Control). In the event
          --------------------------------------------------------
of a Change in Control, all Non-Statutory Stock Options held by a Participant as
of the date of the Change in Control shall  immediately  become  exercisable and
shall remain  exercisable  until the expiration of the term of the Non-Statutory
Stock  Option,  regardless  of  whether  or when the  Option  holder  terminates
employment or service.

      (i)  Payment.  Payment  due  to  a  Participant  upon  the  exercise  of a
           -------
Non-Statutory Stock Option shall be made in the form of shares of Common Stock.

7.    INCENTIVE STOCK OPTIONS.
      -----------------------

      The  Committee  may,  subject  to the  limitations  of the  Plan  and  the
availability  of shares of Common Stock reserved but unawarded  under this Plan,
grant  Incentive  Stock Options to an Employee upon such terms and conditions as
it may determine to the extent such terms and conditions are consistent with the
following provisions:

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Incentive Stock Option.  However, the Exercise Price shall not be less than
100% of the  Fair  Market  Value  of the  Common  Stock  on the  Date of  Grant;
PROVIDED, HOWEVER, that if at the time an Incentive Stock Option is granted, the
Employee owns or is treated as owning,  for purposes of Section 422 of the Code,
Common Stock  representing more than 10% of the total combined voting securities
of the Holding Company ("10% Owner"),  the Exercise Price shall not be less than
110% of the Fair Market Value of the Common Stock on the Date of Grant.

      (b) Amounts of Incentive  Stock Options.  To the extent the aggregate Fair
          -----------------------------------
Market  Value of shares of Common Stock with  respect to which  Incentive  Stock
Options  that are  exercisable  for the first  time by an  Employee  during  any
calendar  year under the Plan and any other  stock  option  plan of the  Holding
Company  or an  Affiliate  exceeds  $100,000,  or such  higher  value  as may be
permitted  under  Section 422 of the Code,  such Options in excess of such limit
shall be treated as  Non-Statutory  Stock  Options.  Fair Market  Value shall be
determined  as of the Date of Grant with  respect to each such  Incentive  Stock
Option.

      (c) Terms of Incentive  Stock Options.  The Committee  shall determine the
          ---------------------------------
term during which a Participant may exercise an Incentive  Stock Option,  but in
no event may a Participant  exercise an Incentive  Stock Option,  in whole or in
part, more than ten (10) years from the Date of Grant;  PROVIDED,  HOWEVER, that
if at the time an Incentive  Stock Option is granted to an Employee who is a 10%
Owner,  the  Incentive  Stock  Option  granted  to such  Employee  shall  not be
exercisable  after the expiration of five (5) years from the Date of Grant.  The
Committee shall also determine the date on which each Incentive Stock Option, or
any part  thereof,  first  becomes  exercisable  and any terms or  conditions  a
Participant  must satisfy in order to exercise each Incentive Stock Option.  The
shares of Common Stock  underlying  each Incentive Stock Option may be purchased
in whole or in part at any time during the term of such  Incentive  Stock Option
after such Option becomes exercisable.

      (d)  Non-Transferability.  No Incentive Stock Option shall be transferable
           -------------------
except  by will or the laws of  descent  and  distribution  and is  exercisable,
during his  lifetime,  only by the  Employee  to whom the  Committee  grants the
Incentive Stock Option.  The designation of a beneficiary  does not constitute a
transfer of an Incentive Stock Option.

      (e) Termination of Employment  (General).  Unless otherwise  determined by
          ------------------------------------
the  Committee,  upon the  termination  of a  Participant's  employment or other
service for any reason other than Retirement,  Disability, death, or as a result
of a Termination  for Cause,  the  Participant may exercise only those Incentive
Stock Options that were  immediately  exercisable by the Participant at the date
of such termination and only for a period of three (3) months following the date
of such termination.

                                       A-6

<PAGE> 8

      (f)   Termination   of  Employment   (Retirement).   In  the  event  of  a
            -------------------------------------------
Participant's Retirement, all Incentive Stock Options held by the Participant at
the date of Retirement  shall  immediately  become  exercisable and shall remain
exercisable for a period of five (5) years following the date of Retirement. Any
Option originally  designated as an Incentive Stock Option shall be treated as a
Non-Statutory  Stock Option to the extent the Participant  exercises such Option
more than three (3) months following the Date of the Participant's Retirement.

      (g) Termination of Employment  (Disability or Death).  In the event of the
          ------------------------------------------------
termination of a Participant's  employment or other service due to Disability or
death,  all Incentive Stock Options held by such Participant  shall  immediately
become  exercisable  and remain  exercisable for a period one (1) year following
the date of such termination.

      (h) Termination of Employment  (Termination  for Cause).  Unless otherwise
          ---------------------------------------------------
determined  by the  Committee,  in the event of an  Employee's  Termination  for
Cause,  all rights under such  Employee's  Incentive  Stock Options shall expire
immediately upon the effective date of such Termination for Cause.

      (i) Change in Control. In the event of a Change in Control,  all Incentive
          -----------------
Stock  Options  held by a  Participant  as of the date of the  Change in Control
shall  immediately  become  exercisable and shall remain  exercisable  until the
expiration of the term of the Incentive  Stock Option,  regardless of whether or
when the Option holder terminates  employment or service.  Any Option originally
designated  as an Incentive  Stock  Option  shall be treated as a  Non-Statutory
Stock  Options to the extent the  Participant  exercises  such  Option more than
three (3) months following the Date of the Participant's Retirement.

      (j)  Payment.  Payment  due  to a  Participant  upon  the  exercise  of an
           -------
Incentive Stock Option shall be made in the form of shares of Common Stock.

      (k)  Disqualifying  Dispositions.  Each Award Agreement with respect to an
           ---------------------------
Incentive  Stock Option shall require the Participant to notify the Committee of
any  disposition  of shares of Common Stock  issued  pursuant to the exercise of
such Option  under the  circumstances  described  in Section  421(b) of the Code
(relating  to  certain  disqualifying  dispositions),  within  10  days  of such
disposition.

8.    PERFORMANCE AWARDS.
      ------------------

      The Committee  may  determine to make any Award under the Plan  contingent
upon the  satisfaction  of any  conditions  related  to the  performance  of the
Holding Company,  an Affiliate or the Participant.  Each Performance Award shall
be  evidenced  in the Award  Agreement,  which  shall  set forth the  applicable
conditions,  the maximum  amounts payable and such other terms and conditions as
are applicable to the Performance Award.

9.    DEFERRED PAYMENTS.
      -----------------

      The  Committee,  in its  discretion,  may permit a Participant to elect to
defer receipt of all or any part of any cash or stock payment under the Plan, or
the Committee may determine to defer receipt by some or all Participants, of all
or part of any such  payment.  The  Committee  shall  determine  the  terms  and
conditions of any such deferral, including the period of deferral, the manner of
deferral,  and the method for measuring  appreciation on deferred  amounts until
their payout.

10.    METHOD OF EXERCISE OF OPTIONS.
       -----------------------------

      Subject to any applicable Award Agreement,  any Option may be exercised by
the  Participant in whole or in part at such time or times,  and the Participant
may make  payment of the Exercise  Price in such form or forms  permitted by the
Committee,  including,  without limitation,  payment by delivery of cash, Common
Stock  or  other  consideration  (including,  where  permitted  by law  and  the
Committee,  Awards) having a Fair Market Value on the day immediately  preceding
the exercise date equal to the total Exercise  Price,  or by any  combination of
cash, shares

                                     A-7

<PAGE> 9

of Common  Stock  and  other  consideration,  including  exercise  by means of a
cashless exercise arrangement with a qualifying broker-dealer,  as the Committee
may specify in the applicable Award Agreement.

11.   RIGHTS OF PARTICIPANTS.
      ----------------------

      No Participant  shall have any rights as a shareholder with respect to any
shares of Common  Stock  covered by an Option  until the date of  issuance  of a
stock  certificate for such Common Stock.  Nothing  contained in this Plan or in
any Award Agreement confers on any person any right to continue in the employ or
service of the Holding Company or an Affiliate or interferes in any way with the
right of the  Holding  Company or an  Affiliate  to  terminate  a  Participant's
services.

12.   DESIGNATION OF BENEFICIARY.
      --------------------------

      A Participant  may, with the consent of the Committee,  designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Committee and may be revoked in writing. If a Participant fails
effectively to designate a beneficiary,  then the  Participant's  estate will be
deemed to be the beneficiary.

13.   DILUTION AND OTHER ADJUSTMENTS.
      ------------------------------

      In the event of any change in the  outstanding  shares of Common  Stock by
reason of any stock dividend or split, recapitalization,  merger, consolidation,
spin-off,  reorganization,  combination or exchange of shares,  or other similar
corporate  change,  or other increase or decrease in such shares without receipt
or  payment  of  consideration  by  the  Holding  Company,  or in the  event  an
extraordinary  capital  distribution  is  made,  the  Committee  may  make  such
adjustments to previously  granted Awards, to prevent dilution,  diminution,  or
enlargement  of the  rights  of  the  Participant,  including  any or all of the
following:

      (a)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other  securities that may underlie future Awards under the
            Plan;

      (b)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other securities  underlying  Awards already made under the
            Plan;

      (c)   adjustments in the  Exercise  Price of  outstanding Incentive and/or
            Non-Statutory Stock Options.

No such  adjustments  may,  however,  materially  change  the value of  benefits
available to a Participant  under a previously  granted Award.  All Awards under
this Plan  shall be  binding  upon any  successors  or  assigns  of the  Holding
Company.

14.   TAXES.
      -----

      (a)  Whenever  under this Plan,  cash or shares of Common  Stock are to be
delivered  upon  exercise or payment of an Award or any other event with respect
to rights and benefits hereunder,  the Committee shall be entitled to require as
a condition of delivery (i) that the Participant  remit an amount  sufficient to
satisfy all  federal,  state,  and local tax  withholding  requirements  related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any  combination  of the foregoing  PROVIDED,  HOWEVER,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan.  Furthermore,  Participants  may direct the Committee to instruct the
Trustee to sell shares of Common  Stock to be  delivered  upon the payment of an
Award to satisfy tax obligations.

                                     A-8

<PAGE> 10

      (b) If any  disqualifying  disposition  described  in Section 7(l) is made
with respect to shares of Common Stock acquired under an Incentive  Stock Option
granted  pursuant to this Plan,  or any  transfer  described  in Section 6(c) is
made,  or any election  described in Section 16 is made,  then the person making
such disqualifying disposition, transfer, or election shall remit to the Holding
Company or its  Affiliates an amount  sufficient to satisfy all federal,  state,
and local withholding  taxes thereby  incurred;  provided that, in lieu of or in
addition to the foregoing,  the Holding Company or its Affiliates shall have the
right to withhold such sums from compensation  otherwise due to the Participant,
or, except in the case of any transfer pursuant to Section 6(c), from any shares
of Common Stock due to the Participant under this Plan.

15.   NOTIFICATION UNDER SECTION 83(b).
      --------------------------------

      The  Committee  may,  on the Date of Grant or any later  date,  prohibit a
Participant  from making the election  described below. If the Committee has not
prohibited  such  Participant  from making such  election,  and the  Participant
shall, in connection with the exercise of any Option,  or the grant of any Stock
Award,  make the  election  permitted  under  Section  83(b) of the  Code,  such
Participant shall notify the Committee of such election within 10 days of filing
notice of the election  with the Internal  Revenue  Service,  in addition to any
filing and  notification  required  pursuant  to  regulations  issued  under the
authority of Section 83(b) of the Code.

16.   AMENDMENT OF THE PLAN AND AWARDS.
      --------------------------------

      (a) The Board of Directors may at any time, and from time to time,  modify
or amend  the Plan in any  respect,  prospectively  or  retroactively;  provided
however,  that provisions  governing  grants of Incentive Stock Options shall be
submitted  for  shareholder  approval  to  the  extent  required  by  such  law,
regulation   or   otherwise.   Failure  to  ratify  or  approve   amendments  or
modifications  by  shareholders  shall  be  effective  only  as to the  specific
amendment or modification requiring such ratification.  Other provisions of this
Plan will remain in full force and effect. No such termination,  modification or
amendment may adversely affect the rights of a Participant  under an outstanding
Award without the written permission of such Participant.

      (b)  The  Committee  may  amend  any  Award  Agreement,  prospectively  or
retroactively;  PROVIDED, HOWEVER, that no such amendment shall adversely affect
the rights of any  Participant  under an  outstanding  Award without the written
consent of such Participant.

17.   EFFECTIVE DATE OF PLAN.
      ----------------------

      The Plan shall become  effective  upon  approval by the Holding  Company's
shareholders.  The failure to obtain  shareholder  approval  will not effect the
validity of the Plan and any Awards made under the Plan; PROVIDED, HOWEVER, that
if the Plan is not approved by stockholders in accordance with IRS  regulations,
the Plan shall remain in full force and effect,  and any Incentive Stock Options
granted under the Plan shall be deemed to be Non-Statutory Stock Options and any
Award  intended to comply with Section  162(m) of the Code shall not comply with
Section 162(m) of the Code.

18.   TERMINATION OF THE PLAN.
      -----------------------

      The right to grant Awards under the Plan will  terminate  upon the earlier
of: (i) ten (10) years after the Effective  Date;  (ii) the issuance of a number
of shares of Common Stock  pursuant to the exercise of Options is  equivalent to
the maximum  number of shares  reserved under the Plan as set forth in Section 4
of the Plan.  The Board of Directors  has the right to suspend or terminate  the
Plan at any time,  provided  that no such action will,  without the consent of a
Participant  or except as provided for in Section  16(c) of the Plan,  adversely
affect a Participant's vested rights under a previously granted Award.

                                     A-9

<PAGE> 11

19.   APPLICABLE LAW.
      --------------

      The Plan will be  administered in accordance with the laws of the state of
Delaware to the extent not pre- empted by applicable federal law.

20.   TREATMENT OF  AWARDS UPON A CHANGE IN CONTROL.
      ---------------------------------------------

      In the  event of a Change in  Control  where the  Holding  Company  or the
Association is not the surviving  entity,  the Board of Directors of the Holding
Company and/or the Association, as applicable,  shall require that the successor
entity  take one of the  following  actions  with  respect to all Awards held by
Participants at the date of the Change in Control:

            (i)  Assume the Awards with the same terms and conditions as granted
            to the Participant under this Plan; or

            (ii) Replace the Awards with comparable Awards,  subject to the same
            or more  favorable  terms and conditions as the Award granted to the
            Participant under this Plan, whereby the Participant will be granted
            common stock or the option to purchase common stock of the successor
            entity;  or, only if the  Committee  determines  that neither of the
            alternatives set forth in clauses (i) or (ii) are legally available;
            or

            (iii)  Replace the Awards  with a cash  payment  under an  incentive
            plan,  program,  or other  arrangement of the successor  entity that
            preserves  the economic  value of the Awards and makes any such cash
            payment  subject  to the same  vesting  or  exercisability  schedule
            applicable to such Awards.

      (b) The  determination  of  comparability of Awards offered by a successor
entity under clause (ii) of paragraph (a) above shall be made by the  Committee,
and the Committee's determination shall be conclusive and binding.

                                      A-10

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