Document:

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                                                                   EXHIBIT 10.12

                      ALLIANCE RESOURCE MANAGEMENT GP, LLC

                            SHORT-TERM INCENTIVE PLAN

1.       INTENT.

         The purpose of the Short-Term Incentive Plan (the "Plan") is to
motivate the employees of Alliance Resource Management GP, LLC (the "Company")
and its affiliates who perform services for Alliance Resource Partners, L.P., a
Delaware limited partnership, and its subsidiaries (the "Partnership") to
collectively produce outstanding results, encourage superior performance,
increase productivity, and aid in the retention of key employees.

2.       PLAN GUIDELINES.

         The administration of the Plan and any potential financial renumeration
to come as a result of its implementation is subject to the determination by the
Company's Board of Directors and/or its Compensation Committee (collectively,
the "Compensation Committee") that the performance goals for the applicable
period have been achieved. The Plan is an additional compensation program
designated to encourage Plan Participants (designated by the Company's
Compensation Committee) to exceed specified projected performance levels for
designated periods. The Plan's pay-out pool will be approved by the Company's
Compensation Committee after reviewing the Partnership's performance results for
the designated period.

3.       PERFORMANCE TARGETS.

         3.1 Designation of Performance Targets. The Compensation Committee
shall determine the "performance measure" and "standard performance target" to
be used for each calendar/fiscal year (a "Plan Year") for determining the pool
of dollars to be distributed as a result of this Plan. Satisfactory results as
determined by the Compensation Committee in its sole discretion must be achieved
in order for a performance pay-out distribution to occur under the Plan.

         3.2 Equitable Adjustment to Performance Targets. The performance
criteria for a Plan Year shall be subject to equitable adjustment at the sole
discretion of the Compensation Committee to reflect the occurrence of any
significant events during the Plan Year.

4.       PARTICIPANTS.

         Designated employees of the Company and its affiliates are eligible to
participate in the Plan to share in the rewards of outstanding performance as it
is linked to individual performance, as

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determined by the Compensation Committee, in consultation with the Company's
President and Chief Executive officer ("CEO").

5.       PERFORMANCE PAY.

         The size of any performance pay-out distribution pool and a
Participant's designated level of participation in such pool will be determined
under criteria established or approved by the Compensation Committee for that
Plan Year.

6.       PROCESS FOR PERFORMANCE PAY-OUT.

         6.1 Procedure. After the aggregate performance pay-out distribution
pool for the Plan Year has been determined, the Company's CEO may allocate a
portion of the aggregate performance pay-out pool to each of the Company's
and/or participating affiliates' senior vice presidents, vice presidents and/or
department heads. Such individual's responsibility will be to further allocate,
subject to the CEO's review and approval, the apportioned performance pay-out
distribution pool to Participants assigned within such individual's area of
responsibility based upon the Participant's individual performance during the
Plan Year.

         6.2 Communication to Participants. Care will be used in communicating
to any Participant his individual level assignment and potential performance
pay-out distribution amount. Each Participant may or may not receive the
allocated performance pay-out distribution amount depending upon the Company's
performance, department or regional performance, and discretionary allocations
from the Company's Compensation Committee, or its designee(s).

7.       DISCRETIONARY PAYMENTS OUTSIDE THE PLAN.

         In the event that any Participant's exceptional individual performance
is demonstrated to substantially exceed standard expectations and
responsibilities, the Company's CEO (or his designee(s)) may award and
distribute a discretionary bonus to a Participant. The Company's CEO shall have
the authority to make such discretionary bonus pay-outs; provided, however, if a
discretionary bonus is to be paid to a Participant who also participates in the
Company's Long-Term Incentive Plan such pay-out must be approved in advance by
the Compensation Committee unless and to the extent such advance approval
requirement has been waived by the Compensation Committee.

8.       TERMINATION OF EMPLOYMENT.

         Termination of employment of a Participant for any reason prior to a
performance pay-out distribution will result in the Participant's forfeiture of
any right, title or interest in a performance pay-out distribution under the
Plan, unless and to the extent waived by the Compensation Committee in its
discretion.

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9.       AMENDMENT AND TERMINATION.

         The Company's Compensation Committee, at its sole discretion, reserves
the right to amend the Plan and to terminate the Plan at any time.

10.      ADMINISTRATION OF PLAN.

         10.1 Administration. The Compensation Committee may delegate the
responsibility for the day-to-day administration and operation of the Plan to
the CEO (or his designee(s)) of the Company or any participating affiliate. The
Compensation Committee (or the entity or individual to which administrative
authority has been delegated) shall have the authority to interpret and construe
any and all provisions of the Plan. Any determination made by the Compensation
Committee (or the entity or individual to which administrative authority has
been delegated) shall be final and conclusive.

         10.2 Indemnification. Neither the Company, any participating affiliate,
nor the Board of Directors, or any member or any committee thereof, of the
Company or any participating affiliate, nor any employee of the Company or any
participating affiliate shall be liable for any act, omission, interpretation,
construction or determination made in connection with the Plan in good faith;
and the members of the Company's Board of Directors, the Compensation Committee
and/or the employees of the Company or any participating affiliate shall be
entitled to indemnification and reimbursement by the Company to the maximum
extent permitted by law in respect of any claim, loss, damage or expense
(including counsel's fees) arising from their acts, omission and conduct in
their official capacity with respect to the Plan.

11.      GENERAL PROVISIONS.

         11.1 Non-Guarantee of Employment. Nothing contained in this Plan shall
be construed as a contract of employment between the Company and/or a
participating affiliate and a Participant, and nothing in this Plan shall confer
upon any Participant any right to continued employment with the Company or a
participating affiliate, or to interfere with the right of the Company or a
participating affiliate to discharge a Participant, with or without cause.

         11.2 Interests Not Transferable. Except as to withholding of any tax
under the laws of the United States or any state or locality, no benefits under
the Plan shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment or other legal process, or encumbrance of any
kind, and any attempt to do so shall be void.

         11.3 Facility Payment. Any amounts payable hereunder to any person
under legal disability or who, in the judgment of the Company's Board of
Directors and/or the Compensation Committee, is unable to properly manage his
financial affairs, may be paid to the legal representative of such person, or
may be applied for the benefit of such person in any manner which the Company's

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Board of Directors and/or the Compensation Committee may select, and each
participating affiliate shall be relieved of any further liability for payment
of such amounts.

         11.4 Tax Withholding. The Company and/or any participating affiliate
may deduct from any payments otherwise due under this Plan to a Participant (or
beneficiary) amounts required by law to be withheld for purposes of federal,
state or local taxes.

         11.5 Gender and Number. Words in the masculine gender shall include the
feminine gender, the plural shall include the singular and the singular shall
include the plural.

         11.6 Controlling Law. To the extent not superseded by federal law, the
law of the State of Delaware shall be controlling in all matters relating to the
Plan.

         11.7 No Rights to Award. No person shall have any claim to be granted
any award under the Plan, and there is no obligation for uniformity of treatment
of participants. The terms and conditions of awards need not be the same with
respect to each recipient.

         11.8 Severability. If any provision of the Plan or any award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any person or award, or would disqualify the Plan or any
award under the law deemed applicable by the Compensation Committee, such
provision shall be construed or deemed amended to conform to the applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Compensation Committee, materially altering the intent of
the Plan or the award, such provision shall be stricken as to such jurisdiction,
person or award and the remainder of the Plan and any such award shall remain in
full force and effect.

         11.9 No Trust or Fund Created. Neither the Plan nor any award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any participating affiliate and a
participant or any other person. To the extent that any person acquires a right
to receive payments from the Company or any participating affiliate pursuant to
an award, such right shall be no greater than the right of any general unsecured
creditor of the Company or any participating affiliate.

         11.10 Headings. Headings are given to the Sections of the Plan solely
as a convenience to facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or interpretation of the Plan
or any provision thereof.

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                                                                    EXHIBIT 10.1

                             AMERICAN SAVINGS BANK
                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT, effective December 1, 1999, by and between AMERICAN SAVINGS
BANK (the "Institution" or the "Bank"), a state-chartered savings institution,
with its principal administrative office at 178 Main Street, New Britain, CT
06051, AMERICAN FINANCIAL HOLDINGS, INC. (the "Holding Company"), a corporation
organized under the laws of the state of Delaware and the holding company of the
Institution, and ROBERT T. KENNEY ("Executive").

     WHEREAS, the Institution wishes to continue to assure itself of the
services of Executive for the period provided in this Agreement; and

     WHEREAS, Executive is willing to continue to serve in the employ of the
Institution on a full-time basis in accordance with the terms of this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.  CONSIDERATION PROVIDED BY THE EXECUTIVE.

     During the period of his employment hereunder, Executive agrees to serve as
Chairman, President and Chief Executive Officer of the Institution.  Executive
shall render administrative and management services to the Institution such as
are customarily performed by persons in a similar executive capacity.  During
said period, Executive also agrees to serve, if appointed, as an officer or if
elected as a director of the Holding Company.  Failure to reappoint Executive as
Chairman, President and Chief Executive Officer of the Institution, or failure
to nominate or reelect Executive to the Board of Directors of the Institution,
without the consent of Executive, shall constitute a breach of this Agreement.

2.  TERMS.

     (a)  The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months.  Commencing on the first
anniversary date of this Agreement, and continuing on each anniversary
thereafter, the disinterested members of the board of directors of the
Institution ("Board") may extend the Agreement an additional year such that the
remaining term of the Agreement shall be thirty-six (36) months unless the
Executive elects not to extend the term of this Agreement by giving written
notice in accordance with Section 8 of this Agreement.  The Board will review
the Agreement and Executive's performance annually for purposes of determining
whether to extend the Agreement and the rationale and results thereof shall be
included in the minutes of the Board's meeting.  The Board shall give notice to
the Executive as soon as possible after such review as to whether the Agreement
is to be extended.
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  (b)  During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive shall devote substantially all his business time,
attention, skill, and efforts to the faithful performance of his duties
hereunder including activities and services related to the organization,
operation and management of the Institution and participation in community and
civic organizations; provided, however, that, with the approval of the Board, as
evidenced by a resolution of such Board, from time to time, Executive may serve,
or continue to serve, on the boards of directors of, and hold any other offices
or positions in, companies or organizations, which, in the  Board's judgment,
will not present any conflict of interest with the Institution, or materially
affect the performance of Executive's duties pursuant to this Agreement.

     (c) Notwithstanding anything herein contained to the contrary, Executive's
employment with the Institution may be terminated by the Institution or
Executive during the term of this Agreement, subject to the terms and conditions
of this Agreement.

3.   CONSIDERATION PROVIDED BY THE INSTITUTION.

     (a) The compensation specified under this Agreement shall constitute
consideration paid by the Institution in exchange for the duties described in
Section 1.  The Institution shall pay Executive as compensation a salary of not
less than $430,000 per year ("Base Salary").   Base Salary shall include any
amounts of compensation deferred by Executive under any employee benefit plan or
deferred compensation arrangement maintained by the Bank or the Holding Company.
Executive's Base Salary shall be payable in accordance with the Bank's general
payroll practices. During the period of this Agreement, Executive's Base Salary
shall be reviewed at least annually; the first such review will be made no later
than one year from the date of this Agreement.  Such review shall be conducted
by the Board or a committee designated by the Board, and the Board may increase
Executive's Base Salary at any time.  The increased Base Salary shall become the
new "Base Salary" for purposes of this Agreement.  In addition to the Base
Salary provided in this Section 3(a), the Institution shall also provide
Executive, at no cost to Executive, with all such other benefits as are provided
uniformly to permanent full-time employees of the Institution or the Holding
Company.

     (b) The Institution will provide Executive with the opportunity to
participate in employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or
otherwise deriving a benefit from immediately prior to the beginning of the term
of this Agreement, and the Institution will not, without Executive's prior
written consent, make any changes in such plans, arrangements or perquisites
which would adversely affect Executive's rights or benefits thereunder, without
separately providing for an arrangement that ensures Executive receives or will
receive the economic value that Executive would otherwise lose as a result of
such adverse affect.  Without limiting the generality of the foregoing
provisions of this Subsection (b), Executive will be entitled to participate in
or receive benefits under any employee benefit plans, whether tax-qualified or
otherwise, including, but not limited to, retirement plans, supplemental
retirement plans, pension plans, profit-sharing plans, health-and-accident plan,
medical coverage or any other employee benefit plan or arrangement
<PAGE>

made available by the Institution now or in the future to its senior executives
and key management employees, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans and arrangements.
Executive will be entitled to incentive compensation and bonuses as provided in
any plan or arrangement of the Institution in which Executive is eligible to
participate. Nothing paid to Executive under any such plan or arrangement will
be deemed to be in lieu of other compensation to which Executive is entitled
under this Agreement.

     (c) In addition to the Base Salary provided for by paragraph (a) of this
Section 3 and other compensation provided for by paragraph (b) of this Section
3, the Institution shall pay or reimburse Executive for all reasonable travel
and other expenses incurred by Executive in performing his obligations under
this Agreement, including expenses associated with membership in clubs or
organizations, as mutually agreed to between the Board and Executive.

4.  PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a) Upon the occurrence of an Event of Termination (as herein defined)
during Executive's term of employment under this Agreement, the provisions of
this Section 4 shall apply.  As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following:  (i) the
termination by the Institution of Executive's full-time employment hereunder for
any reason other than, death, Disability, as defined in Section 6 hereof,
Retirement, as defined in Section 4(f) hereof, or Termination for Cause, as
defined in Section 7 hereof; (ii) Executive's resignation from the Institution's
employ, upon any (A) notice to Executive by the Institution of non-renewal of
the term of this Agreement, (B) failure to appoint or reappoint Executive as
Chairman, President and Chief Executive Officer of the Institution, or failure
to nominate or reelect Executive to the Board of Directors of the Institution,
unless Executive consents to any such event, (C) a material change in
Executive's function, duties, or responsibilities, which change would cause
Executive's position to become one of lesser responsibility, importance, or
scope from the position and attributes thereof described in Section 1 above (and
any such material change shall be deemed a continuing breach of this Agreement),
(D) a relocation of Executive's principal place of employment by more than fifty
(50) miles from its location at the effective date of this Agreement, or a
material reduction in the benefits and perquisites available to Executive to
which Executive does not consent or for which Executive is not or will not be
provided the economic benefit pursuant to Section 3(b) hereof, (E) liquidation
or dissolution of the Institution or the Holding Company, or (F) breach of this
Agreement by the Institution.  Upon the occurrence of any event described in
clauses (A), (B), (C), (D), (E) or (F), above, Executive shall have the right to
elect to terminate his employment under this Agreement by resignation upon not
less than sixty (60) days prior written notice given within a reasonable period
of time not to exceed, except in case of a continuing breach, four calendar
months after the event giving rise to said right to elect.

     (b) Upon the occurrence of an Event of Termination on the Date of
Termination as defined in Section 8, the Institution shall be obligated to pay
Executive, or, in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be:  (i) the amount of the
remaining payments and benefits that Executive would have earned if he had
<PAGE>

continued his employment with the Institution or Holding Company during the
remaining unexpired term of this Agreement, based on the Executive's Base Salary
and benefits provided at the Date of Termination, as set out in Sections 3(a)
and (b) hereof, as the case may be, and (ii) the amount still due the Executive
under any paragraph of Section 3 for service through the Date of Termination.
At the election of Executive, which election is to be made within thirty (30)
days of the Date of Termination, such payments shall be made in a lump sum or
paid monthly during the remaining term of the agreement following Executive's
termination.  In the event that no election is made, payment to Executive will
be made in a lump sum.  Such payments shall not be reduced in the event
Executive obtains other employment following termination of employment.

     (c) Upon the occurrence of an Event of Termination, Executive will be
entitled to receive benefits due him under or contributed by the Institution or
the Holding Company on his behalf pursuant to any retirement, incentive, profit
sharing, bonus, performance, disability or other employee benefit plan
maintained by the Institution or the Holding Company on Executive's behalf to
the extent such benefits are not otherwise paid to Executive under a separate
provision of this Agreement.

     (d) To the extent that the Institution or the Holding Company continues to
offer any life, medical, health, disability or dental insurance plan or
arrangement in which Executive participates in on the last day of his employment
(each being a "Welfare Plan"), after an Event of Termination (as herein
defined), Executive and his dependents shall continue participating in such
Welfare Plans, subject to the same premium contributions on the part of
Executive as were required immediately prior to the Event of Termination until
the earlier of (i) his death; (ii) his employment by another employer other than
one of which he is the majority owner; or (iii) the end of the remaining term of
this Agreement.  If the Institution or the Holding Company does not offer the
Welfare Plans after the Event of Termination, then the Institution shall provide
Executive with a payment equal to the actuarial value of the provision of such
benefit for the period which runs until the earlier of (i) his death; (ii) his
employment by another employer other than one of which he is the majority owner;
or (iii) the end of the remaining term of this Agreement.

     (e) In the event that Executive is receiving monthly payments pursuant to
Section 4(b) hereof, on an annual basis, thereafter, between the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount payable under the Agreement at that time shall be paid in a lump
sum or on a pro rata basis.  Such election shall be irrevocable for the year for
which such election is made.

     (f) For the purpose of this Section, termination of Executive based on
"Retirement" shall mean termination in accordance with the Holding Company's or
Bank's retirement policy or in accordance with any retirement arrangement
established with Executive's consent with respect to him.  Upon termination of
Executive upon Retirement, Executive shall be entitled to all benefits under any
retirement plan of the Holding Company or the Bank and other plans to which
Executive is a party or a participant.
<PAGE>

5.  CHANGE IN CONTROL.

     (a) For purposes of this Agreement, a "Change in Control" of the
Institution or the Holding Company 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 Institution or the Holding Company within the meaning
of the Change in Bank Control Act and the Rules and Regulations promulgated by
the Federal Deposit Insurance Corporation ("FDIC") at 12 C.F.R. (S) 303.4(a),
with respect to the Institution, and the Rules and Regulations promulgated by
the Office of Thrift Supervision ("OTS") (or its predecessor agency), with
respect to the Holding Company, as in effect on the date of this Agreement; 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 Institution or the Holding Company representing 20% or more of
the Institution's or the Holding Company's outstanding voting securities or
right to acquire such securities except for any voting securities of the
Institution 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 Holding 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 Institution or the Holding Company or similar transaction occurs
or is effectuated in which the Institution or Holding Company is not the
resulting entity, 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
Institution 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
Institution 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.

     (b) If any of the events described in Section 5(a) hereof constituting a
Change in Control have occurred or the Board has determined that a Change in
Control has occurred, Executive shall be entitled to the benefits provided in
paragraphs (c), (d), (e), (f) and (g) of this Section 5 upon his termination of
employment on or after the date the Change in Control occurs at any time during
the term of this Agreement due to (1) Executive's dismissal; (2) Executive's
voluntary resignation for any reason on or within the sixty (60) day period
immediately following the date a Change in Control has occurred; or (3)
Executive's resignation following any demotion, loss of title, office or
significant authority or responsibility, reduction in annual
<PAGE>

compensation or benefits or relocation of his principal place of employment by
more than 50 miles from its location immediately prior to the Change in Control,
unless such termination is because of his death, or Termination for Cause;
provided, however, that such payments shall be reduced by any payment made under
Section 4 of this agreement.

     (c) Upon the occurrence of a Change in Control followed by Executive's
termination of employment, as provided in Section 5(b), the Institution shall
pay Executive, or in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay or liquidated
damages, or both, a sum equal to the greater of: (1) the payments due for the
remaining term of the Agreement or (2) three (3) times Executive's average
annual compensation for the five (5) preceding taxable years. In determining
Executive's average annual compensation, annual compensation shall include Base
Salary and any other taxable income, including but not limited to amounts
related to the granting, vesting or exercise of restricted stock or stock option
awards, commissions, bonuses, pension and profit sharing plan contributions or
benefits (whether or not taxable), severance payments, retirement benefits,
director or committee fees and fringe benefits paid or to be paid to Executive
or paid for Executive's benefit during any such year.  At the election of
Executive, which election is to be made prior to or within thirty (30) days of
the Date of Termination on or following a Change in Control, such payment may be
made in a lump sum (without discount for early payment) on or immediately
following the Date of Termination (which may be the date a Change in Control
occurs) or paid in equal monthly installments during the thirty-six (36) months
following Executive's termination.  In the event that no election is made,
payment to Executive will be made on a monthly basis during the thirty-six (36)
months following Executive's termination.

     (d) Upon the occurrence of a Change in Control, Executive will be entitled
to receive benefits due him under or contributed by the Institution or the
Holding Company on his behalf pursuant to any retirement, incentive, profit
sharing, bonus, performance, disability or other employee benefit plan
maintained by the Institution or the Holding Company on Executive's behalf to
the extent such benefits are not otherwise paid to Executive under a separate
provision of this Agreement.

     (e) Upon the occurrence of a Change in Control and Executive's termination
of employment in connection therewith, the Institution will cause to be
continued life, medical and disability coverage substantially identical to the
coverage maintained by the Institution or Holding Company for Executive and any
of his dependents covered under such plans prior to the Change in Control.  Such
coverage and payments shall cease upon the expiration of thirty-six (36) full
calendar months following the Date of Termination.  In the event Executive's
participation in any such plan or program is barred, the Institution shall
arrange to provide Executive and his dependents with benefits substantially
similar as those of which Executive and his dependents would otherwise have been
entitled to receive under such plans and programs from which their continued
participation is barred or provide their economic equivalent.
<PAGE>

     (f) The use or provision of any membership, license, automobile use, or
other perquisites shall be continued during the remaining term of the Agreement
on the same financial terms and obligations as were in place immediately prior
to the Change in Control.  To the extent that any item referred to in this
paragraph will at the end of the term of this Agreement, no longer be available
to the Executive, the Executive will have the option to purchase all rights then
held by the Institution or the Holding Company to such item for a price equal to
the then fair market value of the item.

     (g) In the event that Executive is receiving monthly payments pursuant to
Section 5(c) hereof, on an annual basis, thereafter, between the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount payable under the Agreement at that time shall be paid in a lump
sum or on a pro rata basis pursuant to such section.  Such election shall be
irrevocable for the year for which such election is made.

     (h) Notwithstanding the preceding paragraphs of this Section 5, for any
taxable year in which the Executive shall be liable, as determined for the
payment of an excise tax under Section 4999 of the Code (or any successor
provision thereto), with respect to any payment in the nature of the
compensation made by the Institution or the Holding Company  (or for the benefit
of) Executive pursuant to this Agreement or otherwise, the Institution shall pay
to the Executive an amount determined under the following formula:

     An amount equal to:  (E x P) + X

WHERE:

     X  =               E x P
           ------------------
          1 - [(FI x (1 - SLI)) + SLI + E + (M + PO)]

                 E  =  the rate at which the excise tax is assessed under
                 Section 4999 of the Code;

                 P  =  the amount with respect to which such excise tax is
                 assessed, determined without regard to this Section 5;

     FI          =  the highest marginal rate of federal income, employment, and
                 other taxes (other than taxes imposed under Section 4999 of
                 the Code) applicable to Executive for the taxable year in
                 question;

                 SLI =  the sum of the highest marginal rates of income and
                 payroll tax applicable to Executive under applicable state and
                 local laws for the taxable year in question;

                 M   =  highest marginal rate of Medicare Tax; and

                 PO  =  adjustment for phase out of or loss of deduction,
                 personal exemption or other similar items.
<PAGE>

With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Section or otherwise and
on which an excise tax under Section 4999 of the Code will be assessed, the
payment determined under this Section 5 shall be made to Executive on the
earliest of (i) the date the Institution is required to withhold such tax, (ii)
the date the tax is required to be paid by Executive, or (iii) at the time of
the Change in Control.  It is the intention of the parties that the Institution
provide Executive with a full tax gross-up under the provisions of this Section,
so that on a net after-tax basis, the result to Executive shall be the same as
if the excise tax under Section 4999 (or any successor provisions) of the Code
had not been imposed.  The tax gross-up may be adjusted if alternative minimum
tax rules are applicable to Executive.

     (i) Notwithstanding the foregoing, if it shall subsequently be determined
in a final judicial determination or a final administrative settlement to which
Executive is a party that the excess parachute payment as defined in Section
4999 of the Code, reduced as described above, is more than the amount determined
as "P", above (such greater amount being hereafter referred to as the
"Determinative Excess Parachute Payment") then the Institution's independent
accountants shall determine the amount (the "Adjustment Amount") the Institution
must pay to the Executive, in order to put the Executive (or the Institution, as
the case may be) in the same position as the Executive (or the Holding Company,
as the case may be) would have been if the amount determined as "P" above had
been equal to the Determinative Excess Parachute Payment.  In determining the
Adjustment Amount, the independent accountants shall take into account any and
all taxes (including any penalties and interest) paid by or for Executive or
refunded to Executive or for Executive's benefit.  As soon as practicable after
the Adjustment Amount has been so determined, the Holding Company shall pay the
Adjustment Amount to Executive.

     (k) In each calendar year that Executive receives payments or benefits
under this Agreement, Executive shall report on his state and federal income tax
returns such information as is consistent with the determination made by the
independent accountants of the Institution as described above.  The Institution
shall indemnify and hold Executive harmless from any and all losses, costs and
expenses (including without limitation, reasonable attorney's fees, interest,
fines and penalties) which Executive incurs as a result of so reporting such
information.  Executive shall promptly notify the Institution in writing
whenever the Executive receives notice of the institution of a judicial or
administrative proceeding, formal or informal, in which the federal tax
treatment under Section 4999 of the Code of any amount paid or payable under
this Agreement is being reviewed or is in dispute.  The Institution shall assume
control at its expense over all legal and accounting matters pertaining to such
federal tax treatment (except to the extent necessary or appropriate for
Executive to resolve any such proceeding with respect to any matter unrelated to
amounts paid or payable pursuant to this contract) and Executive shall cooperate
fully with the Institution in any such proceeding.  Executive shall cooperate
fully with the Holding Company in any such proceeding.  Executive shall not
enter into any compromise or settlement or otherwise prejudice any rights the
Institution may have in connection therewith without prior consent to the
Institution.
<PAGE>

6.  DISABILITY BENEFITS.

     In the event of the disability of Executive, the Institution shall continue
to pay Executive the compensation provided by this Agreement during the period
of his disability.  In the event Executive is disabled for a continuous period
exceeding 12 calendar months, the Institution may, at its election, terminate
this Agreement; provided, however, the last 6 months of such 12-month period
shall constitute the "elimination period" for benefit determination under the
Institution's Long-Term Disability Plan.  As used in this Agreement, the term
"disability" shall mean the complete and permanent inability of Executive to
perform his duties under this Agreement as determined by an independent
physician selected with the approval of the Institution and Executive.  If, in
the opinion of said physician, there is a reasonable prognosis of recovery, this
Agreement may not be terminated by the Holding Company pursuant to this
paragraph 6.

7.  TERMINATION FOR CAUSE.

     The term "Termination for Cause" shall mean termination because of: (1)
Executive's personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than traffic violations or similar
offenses), final cease and desist order or material breach of any provision of
this Agreement which results in a material loss to the Institution or the
Holding Company, or (2) Executive's conviction of a crime or act involving moral
turpitude or a final judgement rendered against Executive based upon actions of
Executive which involve moral turpitude.  For the purposes of this Section, no
act, or the failure to act, on Executive's part shall be "willful" unless done,
or omitted to be done, not in good faith and without reasonable belief that the
action or omission was in the best interests of the Institution or its
affiliates.  Notwithstanding the foregoing, Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a Notice of Termination which shall include a copy of a resolution duly
adopted by the affirmative vote of not less than three-fourths of the members of
the Board at a meeting of the Board called and held for that purpose (after
reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying Termination for Cause
and specifying the particulars thereof in detail.  The Executive shall not have
the right to receive compensation or other benefits for any period after
Termination for Cause.   During the period beginning on the date of the Notice
of Termination for Cause pursuant to Section 8 hereof through the Date of
Termination, stock options and related limited rights granted to Executive under
any stock option plan shall not be exercisable nor shall any unvested awards
granted to Executive under any stock benefit plan of the Institution, the
Holding Company or any subsidiary or affiliate thereof, vest.  At the Date of
Termination, such stock options and related limited rights and any such unvested
awards shall become null and void and shall not be exercisable by or delivered
to Executive at any time subsequent to such Termination for Cause.
<PAGE>

8.  NOTICE.

     (a) Any purported termination by the Institution or by Executive shall be
communicated by Notice of Termination to the other party hereto.  For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

     (b) "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given);
provided, however, that if a dispute regarding the Executive's termination
exists, the "Date of Termination" shall be determined in accordance with Section
8(c) of this Agreement.

     (c) If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the occurrence of a
Change in Control and voluntary termination by the Executive in which case the
Date of Termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected)
and; provided, further, that the Date of Termination shall be extended by a
notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable
diligence.  Notwithstanding the pendency of any such dispute, the Institution
will continue to pay Executive his full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, Base
Salary) and continue him as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice of dispute was
given, until the dispute is finally resolved in accordance with this Agreement.
Amounts paid under this Section are in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any other amounts due
under this Agreement.

9.  POST-TERMINATION OBLIGATIONS.

     All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for one (1) full year
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Institution.  Executive shall, upon reasonable
notice, furnish such information and assistance to the Institution as may
reasonably be required by the Institution in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.
<PAGE>

10.  NON-COMPETITION AND NON-DISCLOSURE.

     (a) Upon any termination of Executive's employment hereunder pursuant to
Section 4 hereof, Executive agrees not to compete with the Institution for a
period of one (1) year following such termination in any city, town or county in
which the Executive's normal business office is located and the Institution has
an office or has filed an application for regulatory approval to establish an
office, determined as of the effective date of such termination, except as
agreed to pursuant to a resolution duly adopted by the Board.  Executive agrees
that during such period and within said cities, towns and counties, Executive
shall not work for or advise, consult or otherwise serve with, directly or
indirectly, any entity whose business materially competes with the depository,
lending or other business activities of the Institution.  The parties hereto,
recognizing that irreparable injury will result to the Institution, its business
and property in the event of Executive's breach of this Subsection 10(a) agree
that in the event of any such breach by Executive, the Institution, will be
entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by Executive, Executive's partners,
agents, servants, employees and all persons acting for or under the direction of
Executive.  Executive represents and admits that in the event of the termination
of his employment pursuant to Section 7 hereof, Executive's experience and
capabilities are such that Executive can obtain employment in a business engaged
in other lines and/or of a different nature than the Institution and that the
enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood.  Nothing herein will be construed as prohibiting the
Institution from pursuing any other remedies available to the Institution for
such breach or threatened breach, including the recovery of damages from
Executive.

     (b) Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Institution as it
may exist from time to time, is a valuable, special and unique asset of the
business of the Institution.  Executive will not, during or after the term of
his employment, disclose any knowledge of the past, present, planned or
considered business activities of the Institution thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever unless
expressly authorized by the Board of Directors or required by law.
Notwithstanding the foregoing, Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Institution.
Further, Executive may disclose information regarding the business activities of
the Institution to the Connecticut Department of Banks, OTS and the FDIC
pursuant to a formal regulatory request.  In the event of a breach or threatened
breach by the Executive of the provisions of this Section, the Institution will
be entitled to an injunction restraining Executive from disclosing, in whole or
in part, the knowledge of the past, present, planned or considered business
activities of the Institution or from rendering any services to any person,
firm, corporation, other entity to whom such knowledge, in whole or in part, has
been disclosed or is threatened to be disclosed.  Nothing herein will be
construed as prohibiting the Institution from pursuing any other remedies
available to the Institution for such breach or threatened breach, including the
recovery of damages from Executive.
<PAGE>

11.  SOURCE OF PAYMENTS.

     (a) All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the Institution.  The Holding Company, however,
unconditionally guarantees payment and provision of all amounts and benefits due
hereunder to Executive and, if such amounts and benefits due from the
Institution are not timely paid or provided by the Institution, such amounts and
benefits shall be paid or provided by the Holding Company.

     (b) Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement of even date herewith,
between Executive and the Holding Company, such compensation payments and
benefits paid by the Holding Company will be subtracted from any amounts due
simultaneously to Executive under similar provisions of this Agreement.

12.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Institution or any
predecessor of the Institution and Executive, except that this Agreement shall
not affect or operate to reduce any benefit or compensation inuring to Executive
of a kind elsewhere provided.  No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.

13.  NO ATTACHMENT.

     (a) Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

     (b) This Agreement shall be binding upon, and inure to the benefit of,
Executive and the  Institution and their respective successors and assigns.

14.  MODIFICATION AND WAIVER.

     (a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

     (b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall
<PAGE>

operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future as to any act other
than that specifically waived.

15.  REQUIRED PROVISIONS.

     Any payments made to Executive pursuant to this Agreement, or otherwise,
are subject to and conditioned upon compliance with 12 U.S.C. (S)1828(k) and any
rules and regulations  promulgated thereunder, including 12 C.F.R. Part 359.

16.  SEVERABILITY.

     If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.

17.  HEADINGS FOR REFERENCE ONLY.

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

18.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Connecticut,
unless otherwise specified herein.

19.  ARBITRATION.

     Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of the Institution, in accordance with the
rules of the American Arbitration Association then in effect.  Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
<PAGE>

20.  PAYMENT OF COSTS AND LEGAL FEES AND REINSTATEMENT OF BENEFITS.

     In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of: (1) all legal fees incurred by Executive in resolving such dispute or
controversy, and (2) any back-pay, including salary, bonuses and any other cash
compensation, fringe benefits and any compensation and benefits due Executive
under this Agreement.

21.  INDEMNIFICATION.

     During the term of this Agreement and for an additional period of seven
years thereafter, the Institution shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, and shall indemnify, hold
harmless and defend Executive (and his heirs, executors and administrators) to
the fullest extent permitted under Connecticut law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of the Institution (whether or not he continues to be
a director or officer at the time of incurring such expenses or liabilities),
such expenses and liabilities to include, but not be limited to, judgments,
court costs and attorneys' fees and the cost of reasonable settlements.

22.  SUCCESSOR TO THE INSTITUTION.

     The Institution shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Institution or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Institution's obligations under this Agreement, in the same manner and to the
same extent that the Institution would be required to perform if no such
succession or assignment had taken place.
<PAGE>

                                   SIGNATURES

     IN WITNESS WHEREOF, American Savings Bank and American Financial Holdings,
Inc. have caused this Agreement to be executed and their seals to be affixed
hereunto by their duly authorized officers and directors, and Executive has
signed this Agreement, on the 22 day of November, 1999.
                              ---       --------

ATTEST:                          AMERICAN SAVINGS BANK

 /s/ Richard  J. Moore           By: /s/ Fred Hollfelder
-----------------------             ---------------------------------
Secretary                           For the Board of Directors

     [SEAL]

ATTEST:                          AMERICAN FINANCIAL HOLDINGS,INC.

     (Guarantor)

 /s/ Richard J. Moore            By:/s/ Fred Hollfelder
-----------------------             ---------------------------------
Secretary                           For the Board of Directors

     [SEAL]

WITNESS:                         EXECUTIVE

/s/ Richard J. Moore             /s/ Robert T. Kenney
-----------------------          ---------------------------------
                                 Robert T. Kenney

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