EMPLOYMENT AGREEMENT



     THIS EMPLOYMENT AGREEMENT is made as of January 1, 1996, by

and between THE PEOPLES BANK OF OXFORD, a Pennsylvania banking

corporation with its principal place of business at 24 S. Third

Street, P.O. Box 500, Oxford, Pennsylvania 19363-0500

("Employer"), and GEORGE C. MASON, residing at 801 N. High

Street, West Chester, PA 19380 ("Employee").



                           BACKGROUND



     Employer wishes to employ Employee and Employee wishes to

be so employed in accordance with the terms and provisions of

this Employment Agreement.



                           AGREEMENT



     NOW, THEREFORE, intending to be legally bound hereby, the

parties agree as follows:



     Section 1.  Employment. Employer hereby employs Employee,

who hereby accepts such employment, to serve as Employer's Chief

Executive Officer and Chairman of the Board of Directors of

Employer, subject to the terms and conditions hereinafter set

forth.



     Section 2.  Term. Employee's employment under the terms and

conditions of this Agreement shall commence as of the date

hereof and shall continue until December 31, 2000, unless sooner

terminated as herein provided (the "Initial Term").

Notwithstanding anything herein provided to the contrary, absent

the prior termination of this Agreement, or the delivery of a

Notice of Termination (as defined in Section 10 below),

commencing at the end of the Initial Term, and continuing for

each one (1) year period at the end of any renewal period, this

Agreement shall automatically be renewed for a new one (1) year

term, unless written notice is given by either party, no later

than ninety (90) days prior to the last day of the Initial Term,

or any renewal period, indicating that the automatic renewal

will not occur.



     Section 3.  Duties. Employee shall perform such duties as

are generally incident to the office of Chief Executive Officer

and Chairman of the Board of Directors of a banking institution

of comparable size to Employer, and such other duties as are

required under the By-laws of Employer or reasonably required by

the Board of Directors of the Employer.



     Section 4.  Compensation.



     (a)  Salary. During the Initial Term and all renewals

thereof, Employer shall pay to Employee, in equal installments

at least as frequently as monthly, a minimum annual salary equal

to the greater of (i) $125,000.00, or (ii) such higher annual

salary as any future compensation committee of the Board of

Directors may determine, or in the absence of any such

compensation committee, as the Board of Directors of Employer

may determine.



     (b)  Bonus. During the Initial Term of this Agreement and

all renewals thereof, Employer will pay to Employee an annual

bonus in an amount and in such installments as any future

compensation committee of the Board of Directors may determine,

or in the absence of any such compensation committee, as the

Board of Directors of Employer may determine, but in no case

shall the bonus be less than Ten Thousand Dollars ($10,000.00)

annually.



     (c)  Additional Benefits.  During the Initial Term and all

renewals thereof, Employee shall be entitled to participate in

all of the employee benefit plans of Employer which are

applicable to executive salaried officers, including, but

without limitation, the pension plan, health insurance,

disability insurance with a monthly benefit of at least

$2,500.00 and no less than four (4) weeks paid vacation. In

addition, upon termination of this Agreement for any reason,

Employee shall have the right to purchase any insurance policies

which Employer owns on his life for the cash surrender value

plus an assumption of the remaining payments; provided, however,

Employee shall not have the right to purchase any insurance

policies necessary to fund any of his rights and benefits

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