Document:

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                                  EXHIBIT 10.1

                   SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT

        THIS AGREEMENT is entered into on this 22 day of April, 2002 by and
between Sterling Financial Corporation (the "Company"), a Pennsylvania
corporation having its principal office at 101 North Pointe Boulevard,
Lancaster, PA 17601 and John E. Stefan (the "Executive") residing at 1315
Stillwater Road, Lancaster, PA 17601.

        WHEREAS, the Executive is presently serving as the Chairman and Chief
Executive Officer of the Company; and

        WHEREAS, the Executive will retire from his position as the Chief
Executive Officer of the Company effective as of April 30, 2002; and

        WHEREAS, the Company wishes to reward the Executive for his many years
of faithful service and significant contributions to the Company; and

        WHEREAS, the Executive and the Company wish to enter into this Agreement
so as to provide the Executive with supplemental retirement benefits in
accordance with the terms of this Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the parties agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

        For purposes of this Agreement, unless otherwise clearly apparent from
the context, the following phrases or terms have the following indicated
meanings.

        1.1     "Account" means the bookkeeping account created and maintained
for the Executive by the Company.

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        1.2     "Administrator" means the person(s) designated by the Board to
administer the Agreement.

        1.3     "Anniversary Date" means each April 30 during the term of this
Agreement.

        1.4     "Beneficiary" means the person(s) designated by the Executive to
receive the benefits described in Section 3.5.

        1.5     "Board" means the board of directors of the Company.

        1.6     "Change in Control" means a change in control as defined in the
Employment Agreement dated July 27, 1999 between the Executive, the Company and
Bank of Lancaster County, N.A.; provided, however, that a consolidation or
merger of the subsidiaries of the Company, as approved by the Board, shall not
constitute a Change in Control for purposes of this Agreement.

        1.7     "Effective Date" means May 1, 2003.

        1.8     "Interest Rate" means the rate of interest payable on five-year
Treasury securities

        1.9     "Option" means any outstanding unexercised stock option that was
granted to the Executive on or before April 30, 2002 pursuant to the Option
Plan.

        1.10    "Option Plan" means the Sterling Financial Corporation 1996
Stock Incentive Plan.

        1.11    "Trust" means the trust established pursuant to the Trust
Agreement.

        1.12    "Trust Agreement" means the Sterling Financial Corporation
Retirement Restoration Trust Agreement.

                                       2
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                                   ARTICLE II

                                TERM OF AGREEMENT

        This Agreement shall be effective during the five (5)-year period
commencing on the Effective Date and ending on April 30, 2008.

                                   ARTICLE III

                               RETIREMENT BENEFITS

        3.1     On the Effective Date, the Executive's Account shall be credited
with the amount of $729,166.67. The Account shall be subsequently credited with
interest as described in Section 3.3 and debited to reflect the payments
described in Sections 3.2, 3.4 and 3.5.

        3.2     During the period commencing on the Effective Date and ending on
April 30, 2004, the Company shall pay to the Executive the total amount of
$145,833.33. This amount shall be payable in twelve (12) approximately equal
monthly installments which shall be made to the Executive on or before the last
day of each month during this twelve (12)-month period.

        3.3     On April 30, 2004 and on each Anniversary Date thereafter during
the term of this Agreement, the Executive's Account shall be credited with
interest by applying the Interest Rate to the balance of Executive's Account
determined as of that Anniversary Date.

        3.4     On each Anniversary Date, after the Executive's Account has been
credited with interest pursuant to Section 3.3, the balance of the Executive's
Account shall be divided by the number of months then remaining in the term of
this Agreement. Monthly distributions shall be made to the Executive on or
before the last day of each of the next succeeding twelve (12) months until the
next Anniversary Date, at which time the Executive's Account shall again be
credited with interest pursuant to Section 3.3. This procedure shall be repeated
until the last monthly payment is made to the Executive on or about April 30,
2008.

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        3.5     In the event of the Executive's death prior to the distribution
of the entire balance of the Executive's Account hereunder, the remaining
balance of the Executive's Account shall be distributed to the Beneficiary
designated by the Executive or, if there has been no such designation, to the
Executive's estate. Distributions shall be made in the form of monthly
installments in accordance with Article III for the remainder of the term of
this Agreement.

                                   ARTICLE IV

                                CHANGE IN CONTROL

        Upon a Change in Control, the Company shall, as soon as possible, but in
no event longer than sixty (60) days following (i) the Change in Control and
(ii) each Anniversary Date thereafter, make an irrevocable contribution to the
Trust in an amount that is sufficient to make up for any shortfall between (i)
the anticipated obligations that are to be paid pursuant to this Agreement and
(ii) amounts previously contributed to the Trust that had been specifically
designated to satisfy the obligations under this Agreement.

                                    ARTICLE V

                          COORDINATION WITH OTHER PLANS

        Nothing in this Agreement shall be construed as having any impact on the
Executive's entitlement to retirement benefits pursuant to any plan, program or
other arrangement maintained (or previously maintained) by the Company
including, but not limited to, the Sterling Financial Corporation 401(k)
Retirement Plan, Bank of Lancaster County, N.A. Pension Plan and the Sterling
Financial Corporation Retirement Restoration Plan.

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                                   ARTICLE VI

                                     OPTIONS

        Any and all Options shall remain exercisable in accordance with their
terms during the term of this Agreement.

                                   ARTICLE VII

                                     NOTICE

        For purposes of this Agreement, notices and all other communications
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States certified mail, return receipt requested, postage
prepaid, addressed as follows:

                If to the Executive:   John E. Stefan
                                       1315 Stillwater Road
                                       Lancaster, PA 17601

                If to the Company:     J. Roger Moyer
                                       Sterling Financial Corporation
                                       101 North Pointe Boulevard
                                       Lancaster, PA 17601

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon actual receipt.

                                  ARTICLE VIII

                                 ADMINISTRATION

        The Administrator shall have full power and authority to interpret and
administer this Agreement and the Administrator's actions in doing so shall be
final, conclusive and binding on all persons interested in the Agreement.

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                                   ARTICLE IX

                            AMENDMENT AND TERMINATION

        This Agreement may be amended or terminated only by the mutual agreement
of the parties hereto in writing without the consent of any other person.

                                    ARTICLE X

                                CLAIMS PROCEDURE

        10.1    In the event that the Executive or Beneficiary is denied a claim
for benefits under this Agreement, the Administrator shall provide to such
claimant written notice of the denial which shall set forth:

                (a)     the specific reasons for the denial;

                (b)     specific references to the pertinent provisions of the
Agreement on which the denial is based;

                (c)     a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and

                (d)     an explanation of the Agreement's claim review
procedure.

        10.2    After receiving written notice of the denial of a claim, a
claimant or his representative may request a review of such denial by written
application to the Administrator.

        10.3    If the claimant wishes such a review of the decision denying his
claim to benefits under the Agreement, he must submit such written application
to the Administrator within sixty (60) days after receiving written notice of
the denial.

        10.4    No later than ninety (90) days following the receipt of the
written application for review, the Administrator shall submit its decision on
the review in writing to the claimant

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involved and to his representative. The decision shall include specific reasons
for the decision and specific references to the pertinent provisions of the
Agreement on which the decision is based.

                                   ARTICLE XI

                                      TRUST

        11.1    The provisions of this Agreement will govern the rights of the
Executive to receive supplemental retirement benefits pursuant to this
Agreement. The provisions of the Trust Agreement will govern the rights of the
Executive to assets transferred to the Trust.

        11.2    The Company's obligation hereunder may be satisfied with Trust
assets distributed pursuant to the terms of the Trust Agreement and any such
distribution will reduce the Company's obligations hereunder.

                                   ARTICLE XII

                                  MISCELLANEOUS

        12.1    The Executive and his Beneficiaries, heirs and successors will
have no legal or equitable rights, interests or claims in any property or assets
of the Company. The Company's obligations hereunder will be merely that of an
unfunded and unsecured promise to pay money to the Executive in the future.

        12.2    This Agreement shall not be assignable by either party, except
by the Company to any successor in interest to the Company's business.

        12.3    This Agreement contains the entire agreement of the parties
pertaining to the subject matter of this Agreement.

        12.4    This Agreement shall be governed and construed in accordance
with the laws of the Commonwealth of Pennsylvania.

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ATTEST:                                    STERLING FINANCIAL CORPORATION

/s/ Tamara L. Coleman                      By:  /s/ Garth Sprecher
---------------------------------               --------------------------------

WITNESS:                                   EXECUTIVE

/s/ Kathleen A. Prime                      /s/ John E. Stefan
---------------------------------          -------------------------------------

                                       8<PAGE>
                                  EXHIBIT 10.2

                    CONSULTING AGREEMENT AND GENERAL RELEASE

         THIS Consulting Agreement and General Release (hereinafter "Agreement")
is made this 22 day of April, 2002, by and between Sterling Financial
Corporation, a Pennsylvania business corporation having its principal office at
101 North Pointe Boulevard, Lancaster, Pennsylvania 17601 and John E. Stefan, an
adult individual residing at 1315 Stillwater Road, Lancaster, Pennsylvania 17601
(hereinafter "Stefan").

         WHEREAS, Stefan desires to end his Executive Employment Agreement
entered by Stefan, Sterling Financial Corporation and Bank of Lancaster County,
N.A. and dated July 27, 1999 (hereinafter "Employment Agreement") and retire
effective as of the close of business on April 30, 2002; and

         WHEREAS, Stefan will continue to serve as Chairman of the Board of
Directors of Sterling Financial Corporation through April 30, 2003 and remain on
the Board of Directors of Sterling Financial Corporation through the end of his
term in 2004 and thereafter, as decided by the Board of Directors of Sterling
Financial Corporation; and

         WHEREAS, Stefan will provide consulting services to Sterling Financial
Corporation from May 1, 2002 through April 30, 2003; and

         WHEREAS, Sterling Financial Corporation and Stefan desire to resolve
their employment relationship in a final and definitive manner, including their
mutual obligations under the Employment Agreement and to avoid any protracted
issues and disputes between them; and

         WHEREAS, Sterling Financial Corporation recognizes Stefan's many years
of loyal, dedicated and distinguished service,

         NOW THEREFORE, IN CONSIDERATION of the mutual covenants set forth
herein, and intending to be legally bound hereby, the parties agree as follows:

1.       RELEASE. Effective April 30, 2002, Stefan will end his employment and
retire from all offices and positions with Sterling Financial Corporation, Bank
of Lancaster County, N.A. and their subsidiaries and affiliates, provided,
however, that he will continue to serve as Chairman and a member of the Board of
Directors of Sterling Financial Corporation, consistent with Section 3 of this
Agreement. For and in consideration of the benefits provided to Stefan under a
Supplemental Executive Retirement Plan and the agreements and commitments set
forth in this Agreement, including the continuation of benefits, Stefan does
hereby knowingly and voluntarily release and forever discharge, both jointly and
severally, Sterling Financial Corporation and all of its subsidiaries,
divisions, affiliates, and its officers, directors, employees, shareholders,
servants, agents and attorneys in their official and individual capacities,
together with their predecessors, successors and/or assigns (hereinafter
"Sterling") from any and all actions, causes

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of action, suits, debts, dues, sums of money, accounts, damages, judgments,
claims and/or demands whatsoever, in law or in equity, (hereinafter collectively
referred to as "claims"), whether known or unknown to Stefan, which Stefan ever
had, now has or may or might in the future have against Sterling, based on any
acts, omissions, transactions or occurrences whatsoever occurring prior to or on
the date of execution of this Agreement, and specifically, but not by way of
limitation, from those claims which are, or arise by reason of, or are in any
way connected with, or which are or may be based in whole or in part on, or do
or may arise out of, or are or may be related to or with (i) the employment
relationship which existed between Stefan and Sterling and subsequent
termination thereof; (ii) those claims arising under any state fair employment
practices act and/or any law, ordinance or regulation promulgated by any county,
municipality or other state subdivision; (iii) those claims for breach of duty
and/or implied covenant of good faith and fair dealing; (iv) those claims for
interference with and/or breach of contract (express or implied, in fact or in
law, oral or written), including the Employment Agreement entered by Stefan,
Sterling Financial Corporation and Bank of Lancaster County, N.A. and dated July
27, 1999 and the Release that was entered by Stefan, Sterling Financial
Corporation and Bank of Lancaster County, N.A., addressing the transition of
Stefan's duties as President and Chief Executive Officer of Sterling Financial
Corporation; (v) those claims for retaliatory or wrongful discharge of any kind;
(vi) those claims for intentional or negligent infliction of emotional distress
or mental anguish; (vii) those claims for outrageous conduct; (viii) those
claims for interference with business relationships, contractual relationships
or employment relationships of any kind; (ix) those claims for breach of duty,
fraud, fraudulent inducement to contract, breach of right of privacy, libel,
slander, or tortious conduct of any kind; (x) those claims arising under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e, et seq.; (xi)
those claims under the National Labor Relations Act, 29 U.S.C. Section 51 et
seq.; (xii) those claims arising under the Age Discrimination in Employment Act,
29 U.S.C. Section 621 et seq.; (xiii) those claims arising under the Americans
with Disabilities Act, 42 U.S.C. Section 12101 et seq.; (xiv) those claims
arising under the Civil Rights Act of 1866 or 1871, 42 U.S.C. Section 1981 et
seq.; (xv) those claims arising under the Family and Medical Leave Act of 1993,
29 U.S.C. Section 2601, et seq.; (xvi) those claims arising under any state or
federal handicap age or disability discrimination law or act; (xvii) those
claims arising from any damages suffered at any time after the date of this
Agreement by reason of the effects or continued effects of any alleged or actual
discriminatory or wrongful acts which occurred on or before the date of the
execution of this Agreement; (xviii) those claims arising under Pennsylvania
Workers' Compensation laws; (xix) those claims arising under or in reliance upon
any statute, regulation, rule or ordinance (local, state or federal), including,
without limitation, any claims brought pursuant to the Pennsylvania Human
Relations Act, 43 P.S. Section 951 et seq.; (xx) any and all other claims
arising under the law or in equity; (xxi) any and all other claims asserted or
which could have been asserted by Stefan in any other charges or claims of
alleged violation of any applicable law, rule, ordinance or regulation; and
(xxii) any and all claims for any remedies which might otherwise be available to
him including, without limitation, claims for contract or tort damages, punitive
or exemplary damages, special damages, compensatory damages, consequential
damages, lost benefits of any kind including, without limitation, life
insurance, sick pay, severance pay or medical benefits, recovery of attorneys'
fees, costs, expenses of any kind, and reinstatement to a position of employment
or reemployment with Sterling. It is understood and agreed that the waiver of
benefits contained in the preceding sentence does not include the waiver of any
vested, non-forfeitable pension, profit

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sharing or other retirement benefits to which Stefan is entitled through an
existing or prior retirement or profit sharing program, and the consideration
specified in this Section. Stefan further covenants that he has not filed any
charge, complaint or action before any federal, state or local administrative
agency or court against Sterling and that he shall not sue Sterling or
participate in any way in any suit or proceeding or to execute, seek to impose,
collect or recover upon or otherwise enforce or accept any judgment, decision,
award, warranty or attainment upon any claim released herein.

2.       REVIEW OF AGREEMENT. Stefan acknowledges and promises that he has
carefully reviewed, studied and thought over the terms of this Agreement and
that all questions concerning this Agreement have been answered to his
satisfaction. Stefan acknowledges that he has been advised to consult with his
private attorney prior to executing this Agreement. Stefan further agrees,
acknowledges, and promises that prior to execution of this Agreement, he was
encouraged and afforded the opportunity to review it with any professional on
his behalf, including his accountant or tax advisor, and that, to the extent
desired, he has availed himself of that opportunity. Stefan does further
acknowledge and agree that he was given a period of at least twenty-one (21)
days within which to consider this Agreement, that he has had this Agreement in
his possession for a reasonable amount of time, and that he has had the
opportunity to consider and reflect upon the terms of this Agreement before
signing or executing it. Stefan does further acknowledge and agree that he
knowingly and voluntarily entered into and executed this Agreement after
deliberate consideration and that he was not coerced, pressured or forced in any
way by Sterling or anyone else to accept the terms of this Agreement, and that
the decision to accept the terms of this Agreement was entirely his own after an
opportunity for full consultation with his attorney. Stefan also acknowledges
and agrees that he fully understands that he may be giving up certain legal
rights by entering into this Agreement. Stefan also acknowledges that he
understands that he has seven (7) days to revoke this Agreement following its
execution by mailing written notice of revocation postmarked within that seven
(7) day period to: Kathy Prime, Senior Vice President, Human Resources, Sterling
Financial Corporation, 101 North Pointe Boulevard, Lancaster, PA 17601.

By placing his initials at the end of this paragraph, Stefan acknowledges that
he has been informed about his rights and that he specifically waives any claim
that he may have arising under the Older Workers Benefits Protection Act, and
that he has had an opportunity to consult with his attorney regarding his
rights, that he has been advised of the requirement that Sterling allow him
twenty-one (21) days to consider this waiver, and that he may revoke the waiver,
once given, at any time during the seven (7) day period following the signing of
the waiver.

                                                                        --------
                                                                        JES

3.       BOARD SERVICE. Sterling and Stefan agree that Stefan will continue to
serve as Chairman of the Board of Directors of Sterling Financial Corporation
through April 30, 2003 and thereafter, as decided by the Board of Directors of
Sterling Financial Corporation. Stefan will remain on the Board of Directors of
Sterling Financial Corporation through the end of his term in 2004 and
thereafter, as decided by the Board of Directors of Sterling Financial
Corporation.

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Stefan shall continue to perform and discharge well and faithfully duties as
Chairman of the Board of Directors as may be assigned to Stefan by the Board of
Directors of Sterling Financial Corporation. Stefan shall not be entitled to
receive directors' fees from Sterling Financial Corporation during the
Consulting Period (as defined in Section 4 of this Agreement).

4.       CONSULTING SERVICES. For the period of May 1, 2002 through April 30,
2003 (hereinafter the "Consulting Period"), Stefan shall provide consulting
services to the President and Chief Executive Officer and senior management team
of Sterling Financial Corporation to assist them in their new management roles,
at the request of Sterling Financial Corporation's President and Chief Executive
Officer. It is anticipated that services provided will include business
development, board development and education, assistance in strategic planning
and clarification of company vision.

5.       PAYMENTS FOR SERVICES. For services performed by Stefan under this
Agreement, Sterling Financial Corporation shall pay Stefan an annual fee of One
Hundred Forty-Five Thousand Eight Hundred Thirty-Three Dollars and Thirty-Three
Cents ($145,833.33), payable in four (4) equal monthly installments, beginning
in January 2003. No taxes or other deductions will be withheld from the
payments. Sterling Financial Corporation will provide Stefan with Internal
Revenue Service Form 1099, reflecting the fees that Sterling Financial
Corporation pays Stefan for the consulting services that Stefan provides to
Sterling and its management team. If a Change in Control (as defined in the
Employment Agreement, provided, however, that a consolidation or merger of the
subsidiaries of Sterling Financial Corporation, as approved by the Board of
Directors of Sterling Financial Corporation, shall not constitute a Change in
Control) shall occur, Stefan may elect to receive the fees owed to him by
Sterling Financial Corporation for consulting services in one lump sum payment.

6.       CONTINUATION OF BENEFITS. For and in consideration of the agreements
and commitments set forth in this Agreement, including Stefan's execution of the
release contained in this Agreement, Sterling Financial Corporation will
continue to provide Stefan with the benefits identified in this Section 6 until
Stefan reaches age 65. Sterling Financial Corporation will continue to reimburse
Stefan for any and all initiation fees, membership dues, assessments, and
reasonably related business expenses associated with Stefan's membership in
Lancaster Country Club, Bent Creek Country Club, Country Club of Hershey (and
any successor thereto) and Hamilton Club. In addition, Sterling Financial
Corporation shall provide Stefan with exclusive use of an automobile to be
selected by Stefan at the end of Stefan's current lease, provided that the
automobile selected must be consistent with the models that Stefan previously
leased during his employment with Sterling. Sterling Financial Corporation shall
be responsible and shall pay for all costs of insurance coverage, repairs,
maintenance and other operating and incidental expenses, including registration,
fuel and oil. Sterling Financial Corporation will also provide Stefan with
continued use of the office space that he occupied at Sterling Financial
Corporation's North Pointe office building during his employment with Sterling,
until Sterling Financial Corporation and Stefan mutually designate other space
in the North Pointe office building. Sterling Financial Corporation will provide
the latter office space to Stefan until he reaches age 65. Finally, Sterling
Financial Corporation will continue to reimburse Stefan for any and all fees,
costs and reasonably related business expenses associated with his participation
and

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attendance at the Shesnoff conferences that he traditionally attended during
his employment with Sterling, provided, however, that such reimbursement does
not preclude any member of Sterling's senior management team from attending any
Shesnoff conferences.

7.       RESTRICTIVE COVENANT.

(a)      Executive hereby acknowledges and recognizes the highly competitive
nature of the business of Sterling and accordingly agrees that, during the
Consulting Period, Stefan shall not, except as otherwise permitted in writing by
Sterling Financial Corporation:

         (i)      be engaged, directly or indirectly, either for his own account
or as agent, consultant, employee, partner, officer, director, proprietor,
investor (except as an investor owning less than 5% of the stock of a publicly
owned company) or otherwise of any person, firm, corporation or enterprise
engaged in (1) the banking (including financial or bank holding company) or
financial services industry, or (2) any other activity in which Sterling is
engaged during the Consulting Period or was engaged at any time during Stefan's
employment with Sterling, within one hundred (100) miles of Sterling's main
offices at 101 North Pointe Boulevard, Lancaster, Pennsylvania, 17601, including
areas located outside of the Commonwealth of Pennsylvania (the "Non-Competition
Area"); or

         (ii)     provide financial or other assistance to any person, firm,
corporation, or enterprise engaged in (1) the banking (including financial or
bank holding company) or financial services industry, or (2) any other activity
in which Sterling is engaged during the Consulting Period or was engaged at any
time during Stefan's employment with Sterling, in the Non-Competition Area; or

         (iii)    directly or indirectly contact, solicit or induce any person,
corporation or other entity who or which is a referral source or customer of
Sterling at any time during the Consulting Period or was a referral source or
customer of Sterling at any time during Stefan's employment with Sterling; or

         (iv)     directly or indirectly solicit, induce or encourage any
employee of Sterling, who is employed at any time during the Consulting Period
or was an employee of Sterling at any time during Stefan's employment with
Sterling, to seek, obtain or accept employment with any person other than
Sterling.

(b)      It is expressly understood and agreed that, although Sterling and
Stefan consider the restrictions contained in this Section 7 to be reasonable
for the purpose of preserving for Sterling, its good will and other proprietary
rights, if a final judicial determination is made by a court having jurisdiction
that the time or territory or any other restriction contained in this Section 7
is an unreasonable or otherwise unenforceable restriction against Stefan, the
provisions of this Section 7 shall not be rendered void, but shall be deemed
amended to apply as to such maximum time and territory and to such other extent
as such court may judicially determine or indicate to be reasonable.

                                       5
<PAGE>

8.       UNAUTHORIZED DISCLOSURE. During the term of the Consulting Period, or
at any later time, Stefan shall not, without the written consent of the Board of
Directors of Sterling Financial Corporation or a person authorized thereby,
knowingly disclose to any person, other than an employee or director of Sterling
Financial Corporation or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by Stefan of his consulting
duties, any material confidential information obtained by him during his
employment with Sterling or the Consulting Period, with respect to any of
Sterling's services, products, improvements, formulas, designs or styles,
processes, customers, customer lists, methods of business or any business
practices the disclosure of which could be or will be damaging to Sterling;
provided, however, that confidential information shall not include any
information known generally to the public (other than as a result of
unauthorized disclosure by Stefan or any person with the assistance, consent or
direction of Stefan) or any information of a type not otherwise considered
confidential by persons engaged in the same business of a business similar to
that conducted by Sterling or any information that must be disclosed as required
by law.

9.       WAIVER. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Stefan and an executive officer specifically designated by the
Board of Directors of Sterling Financial Corporation. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

10.      ASSIGNMENT. This Agreement shall not be assignable by any party, except
by Sterling to any successor in interest to their respective businesses.

11.      ATTORNEY'S FEES AND COSTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, each party shall
bear their own attorney's fees and costs.

12.      SUCCESSORS; BINDING AGREEMENT.

(a)      Sterling will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the businesses and/or assets of Sterling Financial Corporation to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that Sterling Financial Corporation would be required to perform it if no
such succession had taken place.

(b)      This Agreement shall inure to the benefit of and be enforceable by
Stefan's personal or legal representatives, executors, administrators, heirs,
distributees, devisees and legatees. If Stefan should die and any amounts would
be payable to Stefan under this Agreement if Stefan had continued to live, all
such amounts shall be paid in accordance with the terms of this Agreement to
Stefan's devisee, legatee, or other designee, or, if there is no such designee,
to Stefan's estate.

                                       6
<PAGE>

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

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

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

16.      PRONOUNS. Any pronouns used in this Agreement are intended to refer to
Stefan, regardless of the pronoun's gender.

17.      NOTICES. Except as otherwise provided in this Agreement, any notice
required or permitted to be given under this Agreement shall be deemed properly
given if in writing and if mailed by registered or certified mail, postage
prepaid with return receipt requested, as follows:

         IF TO STEFAN:                           Mr. John E. Stefan
         -------------                           1315 Stillwater Road
                                                 Lancaster, Pennsylvania 17601

         IF TO STERLING FINANCIAL CORPORATION:   Mr. J. Roger Moyer, Jr.
         -------------------------------------   President and CEO
                                                 Sterling Financial Corporation
                                                 101 North Pointe Boulevard
                                                 Lancaster, PA 17601

         or to such other address as either party may have furnished to the
         other in writing, except that notices of change of address shall be
         effective only upon actual receipt.

                                       7
<PAGE>

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

ATTEST:                                     STERLING FINANCIAL CORPORATION

 /s/ Tamara L. Coleman                      By   /s/ Garth Sprecher
-------------------------------                  -------------------------------

WITNESS:                                    "Stefan"

 /s/ Kathleen A. Prime                      /s/ John E. Stefan
-------------------------------             ------------------------------------
                                            John E. Stefan

141710

                                       8

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