Document:

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                                                                    EXHIBIT 10.4

                                    AGREEMENT

         This Agreement (the "Agreement") made the ________ day of
__________________, 1994, by and between USBANCORP, Inc. (the "Company"), a
Pennsylvania corporation, having its principal place of business at Main and
Franklin Streets, Post Office Box 430, Johnstown, Pennsylvania 15907-0430, and
ORLANDO B. HANSELMAN ("Executive").

         WHEREAS, the Executive is the Executive Vice President, Chief Financial
Officer and Manager of Corporate Services of the Company.

         WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interest of the Company and its shareholders
to ensure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined below) of the Company. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change in Control and
to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change in Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change in Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
corporations.
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         NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:

         1. Term. This Agreement shall be for a three (3) year period commencing
on the date first set forth above and shall be automatically renewed on the
first and on each subsequent annual anniversary of the above day and month
("Annual Renewal Date") for a period ending three (3) years from each Annual
Renewal Date unless either party shall give written notice of non-renewal at
least sixty (60) days prior to the Annual Renewal Date.

         2. Change in Control. As used in this Agreement, Change in Control
shall mean the occurrence of any of the following:

                  (a) any "person" or "group" (as those terms are defined or
         used in Section 13(d) of the Securities Exchange Act of 1934 (the
         "Exchange Act"), as enacted and in force on the date hereof) is or
         becomes the "beneficial owner" (as that term is defined in Rule 13d-3
         under the Exchange Act, as enacted and in force on the date hereof) of
         securities of the Company representing 24.99% or more of the combined
         voting power of the Company's securities then outstanding;

                  (b) there occurs a merger, consolidation, share exchange,
         division or other reorganization involving the Company and another
         entity in which Company shareholders do not continue to hold a majority
         of the capital stock of the resulting entity, or a sale, exchange,
         transfer, or other

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         disposition of substantially all of the assets of the Company to
         another entity or other person; or

                  (c) there occurs a contested proxy solicitation or
solicitations of the Company's shareholders which results in the contesting
party or parties obtaining the ability to elect a majority of the members of the
Board of Directors standing for election at one or more meetings of the
Company's shareholders.

         3. Triggering Events. If a Change in Control shall occur and if
thereafter, at any time during the term of this Agreement there shall be:

                  (a) any involuntary termination of the Executive by the
         Company, other than for Cause as defined in Section 4 below;

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

                  (c) the assignment to the Executive of duties inconsistent
         with the Executive's office as such duties existed on the day
         immediately prior to the date of a Change in Control;

                  (d) any reduction in the Executive's annual base salary in
         effect on the day immediately prior to the date of a Change in Control;

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                  (e) any failure to continue the Executive's participation, on
         substantially similar terms, in any incentive compensation or bonus
         plans of the Company in which the Executive participated in immediately
         prior to the Change in Control, or any change or amendment to any of
         the substantive provisions of any of such plans which would materially
         decrease the potential benefits to the Executive under any of such
         plans;

                  (f) any failure to provide the Executive with benefits at
         least as favorable as those enjoyed by the Executive under any pension,
         life insurance, medical, health and accident, disability or other
         employee plans of the Company in which the Executive participated in
         immediately prior to 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, unless such reduction
         relates to a reduction in benefits applicable to all employees
         generally; or

                  (g) any breach of any provision of this Agreement by the
         Company, which breach shall not have been cured by the Company within
         thirty (30) days of the Company's receipt from the Executive or his
         agent of written notice specifying in reasonable detail the nature of
         the Company's breach;

then Executive, at his sole discretion, may upon no less than ninety (90) days
written notice to Company, resign from employment with the Company (or, if
involuntarily

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terminated, give notice of intention to collect benefits under this Agreement)
by delivering written notice to the Company at any time during the term of this
Agreement.

         4. Termination of Executive for Cause. Upon or following a Change in
Control, the Company shall have the right at any time to terminate the
Executive's employment for Cause. In such event, the Company shall give prompt
notice to the Executive, specifying in reasonable detail the basis for such
termination. For purposes of this Agreement, "Cause" shall mean the following
conduct of the Executive:

                  (a) Material breach of any provision of this Agreement, which
         breach Executive shall have failed to cure within thirty (30) days
         after Employee's receipt of written notice from the Company specifying
         the specific nature of the Executive's breach;

                  (b) Willful misconduct of Executive that is materially
         inimical to the best interests, monetary or otherwise, of the Company;

                  (c) Conviction of a felony or of any crime involving moral
         turpitude, fraud or deceit;

                  (d) Adjudication as a bankrupt under the United States
         Bankruptcy Code.

         5. Compensation and Benefits. Upon the occurrence of an event set forth
in Section 3 hereof and the delivery of a notice of termination to the Company
pursuant to Section 3 hereof, the

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Executive shall be absolutely entitled to receive the compensation and benefits
set forth below:

                  (a) the Executive shall select, in his absolute discretion,
         and receive either (i) monthly installments equal to one thirty-sixth
         (1/36) of an amount equal to 2.99 times the following: (x) During the
         initial three-year term of this Agreement (the "Initial Term")
         commencing on the date hereof, the highest combined base salary and
         bonus paid or payable to the Executive in the then current year or in
         any one of the last five fiscal years preceding the Executive's
         delivery of a notice of termination; or (y) After the expiration of the
         Initial Term, the quotient obtained by dividing the sum of the
         Executive's combined salary and bonuses in the five years preceding the
         Executive's delivery of a notice of termination by five, such monthly
         installments shall be payable for a period of one and one half (1 1/2)
         years (the "Payment Period") commencing on the first day of the first
         calendar month after Executive's delivery of notice of termination, or
         (ii) a one time lump sum payment equal to the non-discounted sum of the
         eighteen (18) monthly payments provided for in Section 5(a)(i)
         immediately above;

                  (b) from the date of the notice of termination through and
         including the last day of the Payment Period, the Executive shall be
         entitled to continue to participate in the employee retirement plan(s)
         of the Company and any

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         supplemental executive retirement plan(s) (including deferred profit
         sharing plan) or other plan in effect during the term of this Agreement
         designed to supplement payments made under such employee retirement
         plan, as the case may be, as if the Executive's employment had not
         terminated;

                  (c) from the date of the notice of termination through and
         including the last day of the Payment Period, the Executive shall be
         provided with life, disability, and medical insurance benefits at
         levels equivalent to the highest levels in effect for the Executive
         during any one of the three (3) calendar years preceding the year in
         which the notice of termination is delivered; and

                  (d) on the date of the notice of termination, all options held
         by the Executive to acquire common stock of the Company, to the extent
         not immediately exercisable by their terms, shall become immediately
         exercisable, and such options shall be exercisable by the Executive at
         any time prior to the earlier of the expiration date(s) of such stock
         options or the date which is ninety (90) days after the Executive's
         termination of employment with the Company.

         In the event the Executive is ineligible to continue participation in
the employee retirement plan of the Company and/or any supplemental executive
retirement plan (including deferred profit sharing plan) or other plan in effect
during the term of this Agreement designed to supplement payments made under
such employee retirement plan or in any of the Company's

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life, disability or medical insurance plans or programs, the Company shall, in
lieu of such participation, pay the Executive a dollar amount equal to the
dollar amount of the benefit forfeited by the Executive as a result of such
ineligibility or a dollar amount equal to the cost to the Executive to obtain
such benefits in the case of any life, disability or medical insurance plans or
programs.

         6. Beneficiary. Should the Executive die after entitlement but prior to
payment in full of amounts due pursuant to Section 5(a)(i) hereof, such monthly
payments shall continue (if such payment option was so elected by Executive) to
the Executive's designated beneficiary or his estate until such entitlement has
been paid in full.

         7. Employment at Will. This Agreement contains the entire understanding
of the Company and the Executive with respect to the subject matter hereof and,
subject to the provisions of any other agreement between the Executive and the
Company, the Executive shall remain an employee at will and nothing herein shall
confer upon the Executive any right to continued employment and shall not affect
the right of the Company to terminate the Executive for any reason not
prohibited by law; provided, however, that any such removal shall be without
prejudice to any rights the Executive may have to compensation and benefits as
provided for in Section 5 hereof.

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         8. Arbitration. Except as otherwise provided herein, in the event of
any controversy, dispute or claim arising out of, or relating to this Agreement,
or the breach thereof, the parties may seek recourse only for temporary or
preliminary injunctive relief to the courts having jurisdiction thereof. If any
relief other than injunctive relief is sought, the Company and the Executive
agree that such underlying controversy, dispute or claim shall be settled by
arbitration conducted in Pittsburgh, Pennsylvania in accordance with this
Section 8 and the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The matter shall be heard and decided, and awards rendered,
by a panel of three (3) arbitrators (the "Arbitration Panel"). The Company and
Executive shall each select one arbitrator from the AAA National Panel of
Commercial Arbitrators (the "Commercial Panel") and AAA shall select a third
arbitrator from the Commercial Panel. The award rendered by the Arbitration
Panel shall be final and binding as between the parties hereto and their heirs,
executors, administrators, successors and assigns, and judgment on the award may
be entered by any court having jurisdiction thereof. Each party shall pay their
professional fees, expenses and costs incurred in connection with the resolution
of any controversy, dispute or claim arising out of, or relating to this
Agreement.

         9. Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company, and the Company shall
require any successor to expressly

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acknowledge and assume its obligation hereunder. This Agreement shall inure to
the extent provided hereunder to the benefit of and be enforceable by the
Executive or his/her legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. The Executive may not
delegate any of his/her duties, responsibilities, obligations or positions
hereunder to any person and any such purported delegation by him/her shall be
void and of no force and effect.

         10. Prior Termination. Anything in this Agreement to the contrary
notwithstanding, if the Executive's employment with the Company is terminated
prior to the date on which a Change in Control occurs either (a) by the Company
other than for Cause or (b) by the Executive for any one of the reasons set
forth in Section 3 hereof, and it is reasonably demonstrated that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect the Change in Control or (ii) otherwise
arose in connection with or anticipation of the Change in Control, then for all
purposes of this Agreement the termination shall deemed to have occurred upon a
Change in Control and the Executive will be entitled to the compensation and
benefits provided for in Section 5 hereof.

         11. Release. The Executive hereby acknowledges and agrees that prior to
the occurrence of the Executive's or his dependent's right to receive from the
Company or any of its representatives or agents any compensation or benefit to
be paid

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or provided to him or his dependents pursuant to Section 5 of this Agreement,
the Executive may be required by the Company, in its sole discretion, to execute
a release in a form reasonably acceptable to the Company, which releases any and
all claims the Executive has or may have against the Company or its
subsidiaries, agents, officers, directors, successors or assigns.

         12. Compliance with Laws. The parties hereto acknowledge and agree that
this Agreement and each party's enforcement of their rights hereunder are
subject to the Comprehensive Thrift and Bank Fraud Prosecutions Act of 1990 (12
USC 1828) as enacted and in force on the date hereof.

         13. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested -- in the case of the Executive, to his residence address as
set forth below, and in the case of the Company, to the address of its principal
place of business, in care of the Board -- or to such other person or at such
other address with respect to each party as such party shall notify the other in
writing.

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

Attest:                                    USBANCORP, Inc.

_____________________________              By:__________________________
Secretary                                      Terry K. Dunkle
                                               Chairman, President & CEO

                                           _____________________________(SEAL)
                                           Orlando B. Hanselman
                                           Address:  P.O. Box 337
                                           Johnstown, PA 15907-0337

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                                                                    Exhibit 10.5

                                 USBANCORP, INC.

                             1991 STOCK OPTION PLAN

                                 AUGUST 23, 1991
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                                 USBANCORP, INC.

                             1991 STOCK OPTION PLAN

     The purposes of the 1991 Stock Option Plan (the "Plan") are to encourage
eligible employees of USBANCORP, INC. (the "Corporation") and its Subsidiaries,
including Directors and officers of the Corporation who are employees, to
increase their efforts to make the Corporation and each Subsidiary more
successful, to provide an additional inducement for such employees to remain
with the Corporation or a Subsidiary, to reward such employees by providing an
opportunity to acquire the Common Stock, par value $2.50 per share, of the
Corporation (the "Common Stock") on favorable terms and to provide a means
through which the Corporation may attract able persons to enter the employment
of the Corporation or one of its Subsidiaries. For purposes of the Plan, the
term "Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation if each of the corporations (other than the last
corporation in the unbroken chain) owns stock possessing at least fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in the chain.

                                    SECTION 1

                                 ADMINISTRATION

     The Plan shall be administered by a Committee (the "Committee") appointed
from time to time by the Board of Directors of the Corporation (the "Board") and
consisting of no

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fewer than three members of the Board, none of whom is, or was within one year
prior to becoming a member of the Committee, eligible for selection as a person
to whom stock options may be granted pursuant to the Plan or any other plan of
the Corporation or any of its affiliates (as "affiliates" is defined in
regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) entitling the
participants therein to acquire stock or stock options of the Corporation or any
of its affiliates. If at any time a member of the Committee would not be
eligible for initial appointment to the Committee, said member shall be deemed
to have resigned from the Committee. The Board may at any time, without cause,
remove any person from the Committee by written notice to such person. Any
member of the Committee may resign by written notice to the Board.

     The Committee shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operations of the Plan as it
shall deem to be necessary and advisable for the administration of the Plan
consistent with the purposes of the Plan.

     The Committee shall keep records of any action taken at its meetings. A
majority of the Committee shall constitute a quorum at any meeting and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the Committee, shall be
the acts of the Committee.

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                                    SECTION 2

                                   ELIGIBILITY

     Those salaried employees of the Corporation or any Subsidiary with
executive, managerial, technical or professional responsibility, who may or may
not be an officer or a member of the Board of Directors, shall be eligible to
receive stock options as described herein.

     Subject to the provisions of the Plan, the Committee shall have full and
final authority, in its discretion, to grant stock options as described herein
and to determine the employees to whom stock options shall be granted and the
number of shares to be covered by each stock option. In determining the
eligibility of any employee, as well as in determining the number of shares
which may be acquired pursuant to each stock option, the Committee shall
consider the positions and the responsibilities of the employee being
considered, the nature and value to the Corporation or a Subsidiary of his or
her services, his or her present and/or potential contribution to the success of
the Corporation or a Subsidiary and such other factors as the Committee may deem
relevant.

                                    SECTION 3

                         SHARES AVAILABLE UNDER THE PLAN

     The aggregate number of shares of the Common Stock which may be issued or
delivered and as to which stock options may be granted under the Plan is 128,000
shares. All of such shares

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are subject to adjustment and substitution as set forth in Section 6.

     If any stock option granted under the Plan is cancelled by mutual consent
or terminates or expires for any reason without having been exercised in full,
the number of shares subject to such stock option shall again be available for
purposes of the Plan.

     The shares which may be issued or delivered under the Plan may be either
authorized but unissued shares or treasury shares or partly each, as shall be
determined from time to time by the Board.

                                    SECTION 4

                             GRANT OF STOCK OPTIONS

     The Committee shall have authority, in its discretion, to grant "incentive
stock options" pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), to grant "non-statutory stock options" (stock options
which do not qualify under such Section 422 of the Code) or to grant both types
of stock options, provided that the exercise of one type of option shall not
affect the other type.

     To the extent that the aggregate fair market value of stock with respect to
which incentive stock options are exercisable for the first time by any
individual during any calendar year (under all plans of the individual's
employer corporation and its parent and subsidiary corporations) exceeds
$100,000, such stock options shall be treated as options which are non-

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statutory stock options. The preceding sentence shall be applied by taking
options into account in the order in which they are granted. Also, for this
purpose, the fair market value of any stock shall be determined as of the date
the option with respect to such stock was granted.

                                    SECTION 5

                      TERMS AND CONDITIONS OF STOCK OPTIONS

     Stock options granted under the Plan shall be subject to the following
terms and conditions:

     (A) The purchase price at which each stock option may be exercised (the
"option price") shall be such price as the Committee, in its discretion, shall
determine but shall not be less than one hundred percent (100%) of the fair
market value per share of Common Stock which may be acquired pursuant to the
stock option on the date of grant, except that in the case of an incentive stock
option granted to an employee who, immediately prior to such grant, owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Corporation or any Subsidiary (a "Ten Percent
Employee"), the option price shall not be less than 110% of such fair market
value on the date of grant. For purposes of this Section 5(A), the fair market
value of the Common Stock shall be determined as provided in Section 5(H) below.
Also, for purposes of this Section 5(A), an individual (i) shall be considered
as owning not only shares of the Common Stock owned individually, but also all
shares that are at the time owned, directly or indirectly, by or for the spouse,
ancestors, lineal descendants and brothers and sisters (whether by the whole or
half blood) of such

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individual and (ii) shall be considered as owning proportionately any shares
owned, directly or indirectly, by or for any corporation, partnership, estate or
trust in which such individual shall be a stockholder, partner or beneficiary.

     (B) The option price shall be payable in full in any one or more of the
following ways:

          (i)  in cash; and/or

          (ii) in shares of the Common Stock (which are owned by the optionee
free and clear of all liens and other encumbrances and which are not subject to
the restrictions set forth in Section 7 below) having a fair market value on the
date of exercise of the stock option, determined as provided in Section 5(H),
equal to the option price for the shares being purchased.

     If the option price is paid in whole or in part in shares of Common Stock,
any portion of the option price representing a fraction of a share shall be paid
in cash. The date of exercise of a stock option shall be determined under
procedures established by the Committee, and the option price shall be payable
at such time or times as the Committee, in its discretion, shall determine. No
shares shall be issued or delivered upon exercise of a stock option until full
payment of the option price has been made. When full payment of the option price
has been made and subject to the restrictions set forth in Section 7, the
optionee shall be considered for all purposes to be the owner of the shares with
respect to which payment has been made. Payment of the option price with shares
shall not

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increase the number of shares of Common Stock which may be issued or delivered
under the Plan as provided in Section 3.

     (C) Subject to Section 8 hereof, stock options may be exercised at the
following rate. On or after the first anniversary of the date on which the
options were granted (the "Grant Date"), one-third of such options may be
exercised (rounded upward to the nearest whole share). On or after the second
anniversary of the Grant Date two-thirds of such options may be exercised
(rounded upward to the nearest whole share) minus the aggregate number of such
options previously exercised. On or after the third anniversary of the Grant
Date, the remainder of the options may b exercised. No incentive stock option
shall be exercisable after the expiration of ten years (five years in the case
of a Ten Percent Employee) from the date of grant. No non-statutory stock option
shall be exercisable after the expiration of ten years and six months from the
date of grant. Subject to this Section 5(C) and Sections 5(F), 5(G) and 5(H)
below, stock options may be exercised at such times, in such amounts and subject
to such restrictions as shall be determined, in its discretion, by the
Committee.

     (D) No stock option rights shall be transferable by an optionee other than
by will, or if an optionee dies intestate, by the laws of descent and
distribution of the state of domicile of the optionee at the time of death, and
all stock options shall be exercisable during the lifetime of an optionee only
by the optionee.

     (E) Unless otherwise determined by the Committee and set forth in the stock
option agreement referred to in Section 5(G) or an amendment thereto:

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          (i) If the employment of an optionee who is not a Disabled Optionee
(as defined in Section 5(F) below) is voluntarily terminated with the consent of
the Corporation or Subsidiary, any then outstanding stock option held by such an
optionee shall be exercisable (to the extent exercisable on the date of
termination of employment) by such an optionee at any time prior to the earlier
of the expiration date of such stock option or the date which is three months
after the date of termination of employment;

          (ii) If an optionee retires under any retirement plan of the
Corporation or a Subsidiary, any then outstanding stock option held by such an
optionee shall be exercisable in full (whether or not so exercisable on the date
of termination of employment) by such an optionee at any time prior to the
earlier of the expiration date of such stock option or the date which is three
months after the date of termination of employment;

          (iii) If the employment of an optionee who is a Disabled Optionee is
terminated, any then outstanding stock option held by such optionee shall be
exercisable in full (whether or not so exercisable on the date of termination of
employment) by the optionee at any time prior to the earlier of the expiration
date of such stock option or the date which is one year after the date of
termination of employment;

         (iv) The following transfers of employees will not be treated as a
termination of employment:

               (a) A transfer of an employee between Subsidiaries of the
Corporation;

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               (b) A transfer of an employee from the Corporation to one of its
Subsidiaries; or

               (c) A transfer of an employee to the Corporation from one of its
Subsidiaries.

          (v) Following the death of an optionee during employment, any
outstanding stock option held by the optionee at the time of death shall be
exercisable in full (whether or not so exercisable on the date of the death of
the optionee) by the person or persons entitled to do so under the will of the
optionee, or, if the optionee shall fail to make testamentary disposition of the
stock option or shall die intestate, by the legal representative of the
optionee, at any time prior to the expiration date of such stock option or
within one year after the date of death, whichever is the shorter period.
Following the death of an optionee after termination of employment during a
period when a stock option is exercisable provided in clauses (i), (ii) and
(iii) above, any outstanding stock option held by the optionee at the time of
death shall, to the extent the stock option was exercisable by such person or
persons as would have been entitled had the employee died prior to the
termination of employment so long as such exercise occurs prior to the earlier
of the expiration date of such stock option or the date which is one year after
the date of death.

     (F) If the employment of an optionee terminates for any reason other than
voluntary termination with the consent of the Corporation or a Subsidiary
disability, retirement under any retirement plan of the Corporation or a
Subsidiary, or death, the rights of such optionee under any then outstanding
stock

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option shall terminate at the time of such termination of employment. In
addition, the Committee may in its discretion immediately terminate any stock
options held by the optionee if an optionee (i) engages in the operation ( or
management of a business, whether as owner, partner, officer, director, employee
or otherwise and whether during or after termination of employment, which is in
competition with the Corporation or any of its Subsidiaries; (ii) uses for his
own benefit or discloses to a third party information pertaining to the
Corporation or any of its Subsidiaries which the Corporation or its Subsidiaries
consider to be confidential; or (iii) interferes with the relationship between
the Corporation or a Subsidiary and its employees, suppliers or customers.

     "Disabled Optionee" shall mean an individual who is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.

     Whether termination of employment is a voluntary termination with the
consent of the Corporation or a Subsidiary; whether an optionee is a Disabled
Optionee; whether an optionee has engaged in the operation or management of a
business which is in competition with the Corporation or any of its
Subsidiaries; whether an optionee uses for his own benefit or discloses to a
third party information pertaining to the Corporation or any of its Subsidiaries
which is confidential; and whether an optionee has interfered with the relations
between the Corporation or a Subsidiary and its employees, suppliers or
customers shall be determined in each case by the

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Committee, whose determination shall be final and binding unless such
determination is demonstrably arbitrary and capricious.

     (G) All stock options shall be confirmed by a stock option agreement, or an
amendment thereto, which shall be executed by the Chief Executive Officer, the
President (if other than the Chief Executive Officer) or any Executive Vice
President on behalf of the Corporation and by the employee to whom such stock
options are granted.

     (H) Fair market value of the Common Stock, so long as the Common Stock
trades in the over-the-counter market or on a stock exchange, shall be computed
by taking a weighted average of the mean between the highest and lowest selling
prices per share of the Common Stock as quoted in such reliable publication as
the Committee, in its discretion, may choose to rely upon, on the nearest date
before and the nearest date after the date as of which fair market value is to
be determined on which there are sales.

     If at any time the Common Stock does not trade in the over-the-counter
market or on a stock exchange, the fair market value of the Common Stock shall
be determined by an independent and experienced appraiser which is selected by
the Committee. Fair market value shall be determined without regard to any
restriction applicable to the Common Stock other than a restriction which, by
its terms, will never lapse.

     (I) The obligation of the Corporation to issue or deliver shares of the
Common Stock under the Plan shall be subject to (i) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, with
respect to such shares,

                                       11
<PAGE>   13
if deemed necessary or appropriate by counsel for the Corporation, (ii) the
condition that the shares shall have been listed (or authorized for listing upon
official notice of issuance) upon each stock exchange on which such shares may
then be listed and (iii) all other applicable laws, regulations, rules and
orders which may then be in effect; provided, however, that if the Company Stock
shall be delisted from all national stock exchanges and/or deregistered in
accordance with the provisions of the Securities Exchange Act of 1934, as
amended, the Corporation shall have the obligation to issue and deliver shares
of Common Stock under the Plan upon the exercise of any then outstanding stock
option.

     Subject to the foregoing provisions of this Section 5 and the other
provisions of the Plan, any stock option granted under the plan shall be subject
to such other terms and conditions as the Committee shall deem advisable.

                                    SECTION 6

                      ADJUSTMENT AND SUBSTITUTION OF SHARES

     If a dividend or other distribution shall be declared upon the Common Stock
payable in shares of Common Stock, the number of shares of Common Stock then
subject to any outstanding stock option and the number of shares which may be
issued or delivered under the Plan but are not then subject to an outstanding
stock option shall be adjusted by adding thereto the number of shares which
would have been distributable thereon if such shares had bee outstanding on the
date fixed for determining the stockholders entitled to receive such stock
dividend or distribution.

                                       12
<PAGE>   14
     If the outstanding shares of Common Stock shall be changed into or
exchangeable for a different number or kind of shares of stock or other
securities of the Corporation or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of Common Stock subject to any then outstanding stock option and for each
share of Common Stock which may be issued or delivered under the Plan but is not
then subject to an outstanding stock option, the number and kind of shares of
stock or other securities into which each outstanding share of Common Stock
shall be so changed or for which each such share shall be exchangeable.

     In the case of any adjustment or substitution as provided for in this
Section 6, the aggregate option price for all shares subject to each then
outstanding stock option prior to such adjustment or substitution shall be the
aggregate option price for all shares of stock or other securities (including
any fraction) to which such shares shall have been adjusted or which shall have
been substituted for such shares. Any new option price per share shall be
carried to at least three decimal places with the last decimal place rounded
upwards to the nearest whole number.

     No adjustment or substitution provided for in this Section 6 shall require
the Corporation to issue or sell a fraction of a share or other security.
Accordingly, all fractional shares or other securities which result from any
such adjustment or substitution shall be eliminated and not carried forward to
any subsequent adjustment or substitution.

                                       13
<PAGE>   15
     If any such adjustment or substitution provided for in this Section 6
requires the approval of stockholders in order to enable the Corporation to
grant incentive stock options, then no such adjustment or substitution shall be
made without prior stockholder approval. Notwithstanding the foregoing, in the
case of incentive stock options, if the effect of any such adjustment or
substitution would be to cause the stock option to fail to continue to qualify
as an incentive stock option or to cause a modification, extension or renewal of
such stock option within the meaning of Section 424 of the Code, the Committee
may elect that such adjustment or substitution not be made but rather shall use
reasonable efforts to effect such other adjustment of each then outstanding
stock option as the Committee in its sole discretion shall deem equitable and
which will not result in any disqualification, modification, extension or
renewal (within the meaning of Section 424 of the Code) of such incentive stock
option.

                                    SECTION 7

                   RESTRICTIONS ON TRANSFER OF CERTAIN SHARES

     Shares of Common Stock acquired under exercise of an option pursuant to
Section 5(B)(ii) by a person then subject to the provision of Section 16 of the
Exchange Act shall not be sold or otherwise transferred prior to the expiration
of six months after the date of the grant of the option. The Corporation is
authorized to (i) retain the certificate(s) representing such shares or place
such certificates in the custody of its transfer agent, (ii) place a restrictive
legend on such shares, and/or (iii) issue a stop transfer order to the transfer
agent with

                                       14
<PAGE>   16
respect to such shares in order to enforce the transfer restrictions of this
Section.

                                    SECTION 8

               ACCELERATION OF THE EXERCISE DATE OF STOCK OPTIONS

     Notwithstanding any other provision of this Plan, all stock options shall
become exercisable upon the occurrence of any of the events listed below whether
or not such options are then exercisable under the provisions of the applicable
agreements relating thereto:

     (A) Stock option rights shall be exercisable during any one or more of the
following periods:

          (i) for a period of 60 days beginning on the date on which shares of
Common Stock are first purchased pursuant to a tender offer or exchange offer
(other than such an offer by the Corporation or a Subsidiary), whether or not
such offer is approved or opposed by the Corporation or a Subsidiary and
regardless of the number of shares of Common Stock purchased pursuant to such
offer;

          (ii) for a period of 60 days beginning on the date the Corporation
acquires knowledge that any person or group deemed a person under Section
13(d)(3) of the Exchange Act (other than any director of the Corporation on
August 23, 1991, any Affiliate or Associate of any such director (with such
terms having the respective meanings set forth in Rule 12b-2 under the Exchange
Act as in effect on August 23, 1991), any member of the family of any such
director, any trust (including the trustees

                                       15
<PAGE>   17
thereof) established by or for the benefit of any such person or any charitable
foundation, whether a trust or a corporation (including the trustees and
directors thereof) established by any of such persons), in a transaction or
series of transactions shall become the beneficial owner, directly or indirectly
(with beneficial ownership determined as provided in Rule 13d-3, or any
successor rule, under the Exchange Act), of securities of the Corporation
entitling the person or group to 20% or more of all votes (without consideration
of the rights of any class of stock to elect directors by a separate class vote)
to which all shareholders of the Corporation would be entitled if the election
of Directors were an election held on such date;

          (iii) for a period of 60 days beginning on the date of filing under
the Exchange Act of a Statement on Schedule 13D, or any amendment thereto, by
any person or group deemed a person under Section 13(d)(3) of the Exchange Act,
disclosing an intention or possible intention to acquire or change control of
the Corporation;

          (iv) for a period of 60 days beginning on the date, during any period
of two consecutive years, when individuals who at the beginning of such period
constitute the Board of Directors of the Corporation cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination
for election by the shareholders of the Corporation, of each new Director was
approved by a vote of at least two-thirds of the Directors then still in office
who were directors at the beginning of such period; and

          (v) for a period of 60 days beginning on the date of approval by the
shareholders of the Corporation of an agreement

                                       16
<PAGE>   18
(a "reorganization agreement") providing for (a) the merger or consolidation of
the Corporation with another corporation where the shareholders of the
Corporation, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares of the
corporation issuing cash or securities in the merger or consolidation entitling
such shareholders to 40% or more of all votes (without consideration of the
rights of any class of stock to elect directors by a separate class vote) to
which all shareholders of such corporation would be entitled in the election of
Directors or where the members of the Board of Directors of the Corporation,
immediately prior to the merger or consolidation, do not, immediately after the
merger or consolidation, constitute a majority of the Board of Directors of the
corporation issuing cash or securities in the merger or consolidation or (b) the
sale or other disposition of all or substantially all the assets of the
Corporation.

                                    SECTION 9

           EFFECT OF THE PLAN ON THE RIGHTS OF EMPLOYEES AND EMPLOYER

     Neither the adoption of the Plan nor any action of the Board or the
Committee pursuant to the Plan shall be deemed to give any employee any right to
be granted a stock option under the Plan and nothing in the Plan, in any stock
option granted under the Plan or in any stock option agreement shall confer any
right upon any employee to continue in the employment of the Corporation or any
Subsidiary or diminish in any way the right of the Corporation or any Subsidiary
to terminate the employment of any employee at any time. The granting of a stock
option

                                       17
<PAGE>   19
shall impose no obligation upon the Optionee to exercise such option.

                                   SECTION 10

                                    AMENDMENT

     The right to alter and amend the Plan at any time and from time to time and
the right to revoke or terminate the Plan are hereby specifically reserved to
the Board; provided always that no such revocation or termination shall
terminate any outstanding stock option theretofore granted under the Plan; and
provided further that no such alteration or amendment of the Plan shall, without
prior stockholder approval, (a) increase the total number of shares which may be
issued under the Plan, (b) increase the total number of shares issuable pursuant
to any stock option granted to any one optionee, (c) make any changes in the
class of eligible employees or (d) extend the period set forth in the Plan
during which stock options may be granted. No alteration, amendment, revocation
or termination of the Plan shall, without the written consent of the holder of a
stock option theretofore granted under the Plan, adversely affect the rights of
such holder with respect to such stock option.

                                   SECTION 11

                       EFFECTIVE DATE AND DURATION OF PLAN

     The effective date and date of adoption of the Plan shall be August 23,
1991 (the "Effective Date"), the date of adoption of the Plan by the Board,
provided that such adoption of the Plan by the Board is approved by the
affirmative vote of the

                                       18
<PAGE>   20
holders of at least a majority of the outstanding shares of Common Stock at a
meeting of such holders duly called, convened and held within one year of the
Effective Date. Notwithstanding any provision of the Plan to the contrary, no
stock option granted under the Plan prior to such shareholder approval may be
exercised until after such approval. No stock option may be granted under the
Plan subsequent to the date which is ten (10) years following the effective date
of the Plan.

                                   SECTION 12

                              APPLICATION OF FUNDS

     The proceeds received by the Corporation for the sale of the Common Stock
pursuant to exercise of stock options shall be used for general corporate
purpose

                                   SECTION 13

                            RESERVATION OF THE STOCK

     The Corporation shall be under no obligation to purchase or reserve Common
Stock to satisfy the exercise of stock options. The grant of stock options to
employees hereunder shall not be construed to constitute the establishment of a
trust of the Common Stock issuable pursuant to such stock options, and no
particular Common Stock shall be identified as optioned and reserved for
employees hereunder. The Corporation shall be deemed to have complied with the
terms of the Plan if, at the time of issuance and delivery pursuant to the
exercise of a stock option, it has a sufficient number of shares of the Common
Stock authorized and unissued or in its treasury which may then

                                       19
<PAGE>   21
be appropriate and issued for purposes of the Plan, irrespective of the date
when such Common Stock was authorized.

                                   SECTION 14

                                  GOVERNING LAW

     The Plan and all determinations and actions taken pursuant thereto shall be
governed by the laws of the Commonwealth of Pennsylvania and construed in
accordance therewith.

     This Plan has been prepared, negotiated and delivered in, and shall be
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania.

                              USBANCORP, INC.

                              By:  CLIFFORD A. BARTON
                              Title:  Chairman, President & CEO

ATTEST:

TERRY K. DUNKLE
Secretary

                                       20

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