AMERISERV FINANCIAL INC /PA/
AGREEMENT DATED FEBRUARY 1, 2004
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>3
<FILENAME>w93905exv10w7.txt
<DESCRIPTION>AGREEMENT DATED FEBRUARY 1, 2004
<TEXT>
<PAGE>
Exhibit 10.7

                              EMPLOYMENT AGREEMENT

      This Employment Agreement ("AGREEMENT") is entered into on January 16,
2004, and is effective as of February 10, 2004 ("EFFECTIVE DATE"), between
AMERISERV FINANCIAL, INC. a Pennsylvania corporation, (the "Company"), and ALLAN
R. DENNISON, an individual residing at 120 Victoria Lane, Lewisburg,
Pennsylvania 17837 (the "EXECUTIVE").

                                    PREAMBLE

      The Company and the Executive wish to establish a satisfactory employment
relationship. Therefore, the parties hereto, intending to be legally bound,
agree as follows.

                                    AGREEMENT

      1. Employment. The Company hereby employs the Executive as its President
and Chief Executive Officer, and the Executive hereby accepts such employment
and agrees to perform all duties and accept all responsibilities incident to the
position of President and Chief Executive Officer as may be assigned to him by
the Board of Directors of the Company (the "BOARD"). The Executive shall devote
his full time, best efforts, knowledge, and experience in discharging his duties
under this Agreement.

      2. Compensation. (a) Salary. During the term of this Agreement, the
Company agrees to pay to the Executive a base salary at an annual rate of Three
Hundred Thousand Dollars ($300,000), payable in semi-monthly installments in
accordance with the Company's standard payroll practice. The Executive agrees
that he will not be eligible to be considered for a merit increase in his base
salary until calendar year 2008.

            (b) Benefits. The Executive shall be entitled to participate in all
health insurance and life insurance benefit plans available on a general basis
to other non-union employees of the Company through the Company's Cafeteria
Benefit Plan, and to participate in the Company's Flexible Spending Program;
provided, however, that the Company reserves the right, from time to time, to
amend in any respect and to terminate all such benefit plans; provided, however,
that any reduction in benefits must be applicable to all employees generally.

            (c) Additional Benefits.

               (i) The Executive shall be entitled to participate in the
Company's long term disability benefit plan; provided, however, that the Company
reserves the right, from time to time, to amend in any respect and to
<PAGE>
terminate such benefit plan; provided, however, that any reduction in benefits
must be applicable to all employees generally. The amount of insurance under the
long term disability plan currently equals 50% of the Executive's base salary,
as described in the plan's summary plan description.

               (ii) The Executive shall be entitled to participate in the
Company's Defined Benefit Program effective on February 10, 2004 and in
accordance with the terms of the program; provided, however, that the Company
reserves the right, from time to time, to amend in any respect and to terminate
such benefit program; provided, however, that any reduction in benefits must be
applicable to all employees generally.

               (iii) The Executive shall be entitled to participate in the
Company's Profit Sharing Program effective on January 1, 2005 and in accordance
with the terms of the program; provided, however, that the Company reserves the
right, from time to time, to amend in any respect and to terminate such benefit
program; provided, however, that any reduction in benefits must be applicable to
all employees generally.

               (iv) The Executive shall be eligible to participate in the
Company's 401(k) plan effective on January 1, 2005 and in accordance with the
terms of the plan; provided, however, that the Company reserves the right, from
time to time, to amend in any respect and to terminate such benefit plan;
provided, however, that any reduction in benefits must be applicable to all
employees generally.

            (d) Expenses. The Company will reimburse the Executive for all
reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's policies in effect from
time to time with respect to travel, entertainment and other business expenses,
subject to the Company's requirements with respect to reporting and
documentation of such expenses.

            (e) Stock Options. The Company hereby grants to the Executive stock
options (the "OPTIONS") to purchase 60,000 shares of common stock of the
Company. The options shall be granted on the Effective Date of this Agreement
(the "GRANT DATE") and shall vest in accordance with the vesting schedule
described below. The exercise price for the Options shall be the closing price
of the stock on the NASDAQ National Market on the Grant Date. The Options
granted hereunder shall vest in three (3) equal installments, with the first
installment vesting on the first anniversary of the Grant Date and the other two
(2) installments vesting on the second and third anniversaries of the Grant
Date. The terms and conditions governing the grant, exercise and transfer of the
Options shall be governed by the USBANCORP, Inc. 2001 Stock Incentive Plan which
is attached hereto as Exhibit A and incorporated herein by reference.
<PAGE>
            (f) Vacation. During the term of this Agreement, the Executive shall
be entitled to paid vacation and holidays on an annual basis in accordance with
the Company's vacation and holiday policies. The Executive also will be entitled
to personal time on an annual basis during the term of this Agreement, as
mutually agreed upon by the Executive and the Board. It is agreed that the
Executive shall be entitled to four (4) weeks of paid vacation for calendar year
2004.

            (g) Company Vehicle. The Company agrees to purchase or lease, at the
Board's sole discretion, a vehicle (which shall be owned or leased by the
Company) for the Executive's business use (and ancillary personal use). The
Company will cover all repairs and operating expenses of said vehicle, including
the cost of liability insurance, comprehensive and collision insurance. Upon
termination of the Executive's employment hereunder for any reason, the
Executive shall either immediately return the vehicle to the Company or purchase
the vehicle (or assume the lease) in accordance with the Company's vehicle
purchase policy. Upon request by the Company, the Executive shall submit to the
Company on a timely basis documentation which defines the percentage of the
Executive's use of the vehicle which was for business purposes.

            (h) Incentive Compensation. The Executive is eligible to receive
incentive compensation for the calendar year 2004 based on the overall
performance of the Company during calendar year 2004. The criterion for the
award of such incentive compensation is the absence of a degradation in the
performance of the Company during 2004 as determined in the sole, but reasonable
discretion of the Board. The amount of the award, if any, will be determined by
a consensus of the Board in early 2005, following the formal announcement of the
Company's 2004 performance. The award, if any, will be targeted at thirty
percent (30%), up to a maximum of sixty percent (60%), of the Executive's base
salary and will be paid on March 31, 2005 in the form of cash and/or common
stock, in the Board's sole discretion.

            (i) Club Membership and Dues. During the term of this Agreement, the
Company agrees to pay the initiation fees and dues for the Executive to be a
member of the Sunnehanna Country Club and agrees to reimburse the Executive for
all ordinary, necessary, and reasonable business-related expenses incurred by
the Executive on Company business at said country club. As a condition to
receiving such reimbursements, the Executive shall submit to the Company on a
timely basis business expense reports, including substantiation sufficient to
enable the Company to deduct the reimbursed expenses for tax purposes.

            (j) Relocation Expenses.

               (i) The Company agrees to cover the cost of moving the
Executive's household furnishings and personal belongings currently located in
<PAGE>
Lewisburg, Pennsylvania to the Johnstown, Pennsylvania area, via a moving
company selected by the Company in its sole discretion, during calendar year
2004.

               (ii) The Company agrees to cover the cost of storing the
Executive's household furnishings for up to six (6) months, if necessary, as
determined by the Board in its sole discretion.

               (iii) The Company agrees to cover the cost of temporary lodging
for the Executive from the Effective Date through June 30, 2004, in an amount
not to exceed $1,200 per month.

               (iv) The Company agrees to reimburse the Executive's spouse for
documented, reasonable and necessary expenses incurred in connection with
house-hunting activities in the Johnstown, Pennsylvania area, including
transportation expenses, up to a maximum of five (5) separate visits occurring
between the Effective Date and June 30, 2004.

               (v) The Company agrees to reimburse the Executive for any real
estate closing costs associated with the purchase of his home in the Johnstown
area, including, but not limited to, transfer stamps and title insurance costs
paid by the Executive in connection with his purchase of such home.

               (vi) The Company agrees to purchase the Executive's principal
residence located at 120 Victoria Lane, Lewisburg, Pennsylvania 17837 for an
amount equal to its average fair market value as determined by three (3)
appraisals. The appraisals shall be performed by appraisers selected by mutual
agreement of the Executive and the Company's Senior Human Resources Officer.
Once the Company has purchased the Executive's principal residence, the Company
may sell such residence at its discretion.

               (k) No Right to Personal Loans; Sarbanes-Oxley Compliance. The
Executive acknowledges and agrees that, notwithstanding anything to the contrary
in this Agreement, he shall not be entitled to, and this Agreement does not
confer on the Executive, any benefits that constitute (or which, in the
Company's good faith determination based on the advice of counsel, would likely
constitute) a personal loan in violation of Section 402 of the Sarbanes-Oxley
Act of 2002, including any implementing regulations thereunder, or any similar
provision of applicable law (collectively, including Section 13(k)(3) of the
Securities Exchange Act of 1934, as amended (providing a limited exception to
the prohibition on loans to officers made or maintained by an insured depository
institution, if the loan is subject to the insider lending restrictions of
section 22(h) of the Federal Reserve Act), to the extent applicable, "SECTION
402"). In the event that the Company, in good faith and upon the advice of
counsel, determines that any provision of this Agreement would, absent this
subsection, give rise to a potential violation of Section 402, the Executive
<PAGE>
and the Company shall promptly negotiate, in good faith, towards an appropriate
amendment to this Agreement that would eliminate such potential violation, but
which would, as closely as reasonably possible, afford both the Company and the
Executive, the same relative economic benefits of their bargain hereunder prior
to such amendment.

3. Change in Control. (a) If during the first three (3) years of this Agreement
there is a Change in Control (defined below) and following such Change of
Control one of the following events occurs:

               (i) there is an involuntary termination of the Executive by the
Company other than for Cause as defined in Section 4 of this Agreement
("INVOLUNTARY TERMINATION");

               (ii) there is a reduction in the Executive's title,
responsibilities, including reporting responsibilities, or authority, including
such title, responsibilities, or authority as such may have been increased from
time to time during the term of this Agreement;

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

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

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

               (vi) the Company fails to provide the Executive with benefits at
least as favorable as those enjoyed by the Executive under any pension, life
insurance, medical, health and accident, disability or other employee plans of
the Company in which the Executive participated immediately prior to the Change
in Control, or the Company takes any action that would materially reduce any of
such benefits in effect at the time of the Change in Control, unless such
reduction relates to a reduction in benefits applicable to all employees
generally; or

               (vii) there is a breach of any provision of this Agreement by the
Company, which breach shall not have been cured by the Company within thirty
(30) days of the Company's receipt from the Executive or his agent of written
notice specifying in reasonable detail the nature of the Company's breach;
<PAGE>
then the Executive may collect the compensation and benefits described in this
Section as follows:

               1. If the Executive is terminated pursuant to an Involuntary
               Termination, the Executive shall collect benefits under this
               Section without any further action by the Executive.

               2. If any of the events described in Sections 3(a)(ii) through
               (vii) occur, the Executive may collect benefits under this
               Section by delivering thirty (30) days prior written notice to
               the Company of Executive's decision to resign from his
               employment with the Company (effective thirty (30) days after
               the date of notice or such earlier time as the Company may
               determine) and of Executive's decision to collect benefits
               under this Section ("NOTICE").

               (b) Upon the occurrence of an Involuntary Termination or of an
event described in subsection (a)(ii)-(a)(vii) hereof ("EVENT") and the proper
delivery of the Notice, the Executive shall be entitled to the following:

               (i) The Company shall pay to the Executive either (x) monthly
installments equal to one thirty-sixth (1/36) of an amount equal to the product
of (A) 2.99 multiplied by (B) the quotient obtained by dividing the sum of the
Executive's combined salary and bonuses in the three calendar years (or such
lesser whole number of calendar years that the Executive was employed by the
Company) preceding the date of the Executive's Involuntary Termination or the
month preceding the Executive's delivery of Notice (whichever is applicable) by
three (or such lesser whole number of calendar years that the Executive was
employed by the Company), being paid in thirty-six (36) equal monthly
installments (such 36 month period, the "PAYMENT PERIOD"), without interest,
commencing on the first day of the calendar month following the month in which
the Involuntary Termination occurred or the month in which the Executive's
resignation pursuant to the Notice was effective (whichever is applicable), or
(y) a one time lump sum payment equal to 75% the total amount payable under
subsection (b)(i)(x), with the amount payable under this subsection being
non-qualified deferred compensation for which the Company shall establish a
deferred compensation plan if none is otherwise available to pay the benefit;
and

               (ii) In addition, from the date of the Executive's Involuntary
Termination or the date on which an Event occurred (whichever is applicable)
through and including the last day of the Payment Period, the Executive shall
(A) be entitled to continue to participate in the employee retirement plan(s) of
the Company and any supplemental executive retirement plan(s) (including
deferred profit sharing plan) or other plan in effect during the term of this
Agreement
<PAGE>
designed to supplement payments made under such employee retirement plan, as the
case may be, as if the Executive's employment had not terminated and (B) be
provided with life, disability, and medical insurance benefits at levels
equivalent to the highest levels in effect for the Executive during any one of
the three (3) calendar years preceding the year in which the Involuntary
Termination or the date on which an Event occurred; and

            In the event the Executive is ineligible to continue participation
in the employee retirement plans of the Company and/or any supplemental
executive retirement plans (including profit sharing plan) or other plans in
effect during the term of this Agreement designed to supplement payments made
under such employee retirement plan or in any of the Company's life, disability
or medical insurance plans or programs, the Company shall, in lieu of such
participation, pay the Executive a dollar amount equal to the dollar amount of
the benefit forfeited by the Executive as a result of such ineligibility or a
dollar amount equal to the after-tax cost to the Executive to obtain such
benefits in the case of any life, disability or medical insurance plans or
programs, at the election of the Board in its sole discretion. Such payments
shall be made on a mutually agreeable periodic basis, determined in good faith
by the parties.

            Notwithstanding the preceding provisions of this Section, in no
event shall the aggregate of the amounts payable and benefits provided under
this Section, when added to all other amounts and benefits payable or provided
to Executive under any other plan, document, or arrangement, exceed an amount
which would cause an excise tax to be imposed on him under Section 4999 of the
Internal Revenue Code of 1986, as amended. The Executive shall be entitled to
select, prior to his termination, the specific payments and benefits to be
provided hereunder that will not result in such an excise tax. All calculations
made in connection with such excise tax and otherwise required hereunder shall
be made by the Company's accountants, subject to the review of the Executive or
his representative.

      (c) As used in this Agreement, "CHANGE IN CONTROL" shall mean the
occurrence of any of the following:

               (i) If during the first three (3) years of this Agreement any
"person" or "group" which is not an Affiliate of the Company (as those terms are
defined or used in Section 13(d) of the Securities Exchange Act of 1934 (the
"EXCHANGE ACT"), as enacted and in force on the date hereof) is or becomes the
"beneficial owner" (as that term is defined in Rule 13d-3 under the Exchange
Act, as enacted and in force on the date hereof) of securities of the Company
representing fifty percent (50%) or more of the combined voting power of the
Company's securities then outstanding; or

               (ii) If during the first three (3) years of this Agreement there
occurs a merger, consolidation, share exchange, division or other
<PAGE>
reorganization involving the Company and another entity which is not an
Affiliate of the Company in which the Company's shareholders do not continue to
hold a majority of the capital stock of the resulting entity, or a sale,
exchange, transfer, or other disposition of substantially all of the assets of
the Company to another entity or other person which is not an Affiliate of the
Company.

               (d) Should the Executive die after entitlement but prior to
payment in full of amounts due pursuant to subsection (b)(i)(x) hereof, such
monthly payments shall continue (if such payment option was so elected by the
Executive) to the Executive's designated beneficiary or, in absence of a written
designation, his estate until such entitlement has been paid in full; provided,
however, that in such case, the benefits described in subsection (b)(ii) hereof
shall not thereafter accrue or be paid.

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

      4. Term and Disability.

               (a) Term. This Agreement shall commence on the Effective Date and
shall continue thereafter for five (5) years unless earlier terminated as
hereinafter provided. This Agreement may be terminated by either party at any
time and for any reason on sixty (60) days' prior written notice to the other
party. Any compensation payable or benefits to be provided to the Executive
during such sixty (60) day notice period shall be reduced by any amounts
received during this period by the Executive from a third party as compensation
for services. Compensation shall not include for purposes of this subsection
directors fees paid to the Executive by third parties and any income that the
Executive may realize from passive investments. Notwithstanding any other
provisions of this Agreement, this Agreement shall terminate automatically
without notice at any time upon the occurrence of any one or more of the
following events: (i) the Executive's death or Total and Permanent Disability
(as defined below); (ii) a material breach of this Agreement by the Executive;
(iii) the Executive's commission of any act involving dishonesty or fraud or
conduct tending to bring the Company into public disgrace or disrepute in any
respect, including but not limited to acts of dishonesty or fraud, commission of
a felony or a crime of moral turpitude; (iv) gross negligence or willful
misconduct by the
<PAGE>
Executive with respect to the Company or the Executive's continuing and
unreasonable refusal to substantially perform his duties with the Company as
specifically directed by the Board; or (v) the Executive's addiction to drugs or
alcohol if the Executive has refused treatment or has failed to successfully
complete treatment within the past twelve (12) months. If the Executive is
terminated as a result of the occurrence of any one or more of the events
described in (i) through (v) of this Section 4(a), the Executive will be deemed
to have been terminated for "CAUSE". Should this Agreement remain in effect four
and one-half (4 -1/2) years after the Effective Date, the parties agree to
discuss whether to extend the term of this Agreement beyond five (5) years.

      (b) Total and Permanent Disability.

               (i) "TOTAL AND PERMANENT DISABILITY" shall mean a mental or
physical disability, illness or incapacity of the Executive which renders the
Executive unable to perform a substantial portion of his duties as an employee
of the Company for a period of three (3) consecutive months or an aggregate
period of six (6) months in any eighteen month period or that renders the
Executive unable to earn a livelihood as an employee of a business comparable to
the Company's business, unless further time is required as a reasonable
accommodation under the Americans with Disabilities Act. The final determination
of Total and Permanent Disability shall be made by physicians selected by the
Board and shall be made in light of the Executive's position and
responsibilities in the Company prior to the commencement of his disability and
in light of his employment history.

               (ii) If the Executive suffers a Total and Permanent Disability,
the Company shall continue the Executive's salary for up to ninety (90) days
commencing with the first day of the month immediately following the month in
which the Executive suffers a Total and Permanent Disability. The Executive's
salary shall be reduced by any amounts payable to the Executive under a
disability insurance plan maintained by the Company.

            (c) Temporary Impairment. If the Executive, in the reasonable
opinion of a physician selected by the Board, is unable or incompetent mentally
or physically, even with reasonable accommodation, to perform the essential
functions of his job or devote his best efforts (measured against prior
performance) to the Company for more than 30 work days in any 12-month period,
subsequent compensation (including salary) shall be paid (or accrued) only with
respect to those work days during which the Executive is able, in the reasonable
opinion of a physician selected by the Board, with or without reasonable
accommodation, to perform the essential functions of his job or devote his best
efforts (measured against prior performance) to the Company. These provisions on
temporary impairment shall in no way affect the Company's rights to terminate
the Executive under Section 4(a) hereof, which rights may also be exercised
during any period of temporary impairment. Any salary
<PAGE>
payable (or accrued) during the 30-day period of inability or incompetence shall
be reduced by any amounts payable to the Executive under a disability insurance
plan maintained by the Company, and no compensation shall be paid (or accrued)
for such 30-day period if the temporary impairment is the fault of the
Executive.

      5. Confidential Information. The Executive will not reveal (or permit to
be revealed) to a third party or use for his own benefit, either during or after
his employment hereunder, without the prior written consent of the Company, any
confidential information pertaining to the business of the Company or its
shareholders, subsidiaries or other Affiliates, including but not limited to
information about customers, suppliers, employees, financial condition,
operations, procedures, know-how, production, distribution, experiments, patent
or other trade secrets of the Company or its Affiliates except for information
clearly established to be in the public record. For purposes of this Section 5,
(A) the term "AFFILIATE" shall mean, with respect to any Person, any other
Person which controls, is controlled by or is under common control with such
first Person, (B) "CONTROL" means, with respect to any entity, the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting
securities, by contract or otherwise, and (C) the term "PERSON" means any
individual, partnership, corporation, trust, limited liability company or other
entity. Notwithstanding the foregoing, confidential information does not include
(i) information which the Executive can prove to the Company's satisfaction is
or has become generally known to the public through no act or omission of the
Executive and (ii) information which has been or hereafter is lawfully obtained
by the Executive from a source other than the Company or any of its Affiliates
(or their respective officers, directors, employees, equity holders or agents)
so long as, in the case of information obtained from a third party, such third
party was not, directly or indirectly, subject to an obligation of
confidentiality owed to the Company or any of its Affiliates at the time such
confidential information was disclosed to the Executive.

      6. Severance/Consideration.

            (a) In the event that the Executive is notified by the Company that
his employment is going to be terminated hereunder, other than for Cause and
absent a Change in Control as defined in Section 3(c) of this Agreement and
absent a prior termination as described in Section 3(e) of this Agreement, then:

               (i) if the Executive is terminated, other than for Cause, prior
to the third anniversary of the Effective Date, the Company shall pay to the
Executive an amount equal to his base salary in effect at the time and continue
his benefits coverage in effect at that time of termination through the fifth
anniversary of the Effective Date; or
<PAGE>
               (ii) if the Executive is terminated, other than for Cause, after
the third anniversary of the Effective Date, the Company shall pay to the
Executive an amount equal to his base salary in effect at the time and continue
his benefits coverage in effect at that time for a period of twenty-four (24)
months from the date of termination.

The Company's obligation to make the payments described in this Section 6, is
conditioned on the execution by the Executive of an Agreement and Release
substantially in the form of Exhibit B attached hereto, or as revised by the
Company if required to conform to changes in the law or regulations after the
execution of this Agreement and thereafter does not revoke such Agreement and
Release in the manner permitted under Section 19 of such Agreement and Release.
Payments under Section 6(a)(i) for the first twenty-four (24) months and any
payments under Section 6(a)(ii) shall be considered severance pay, for which the
Company shall establish a severance pay plan if none is otherwise available to
pay the benefit. Payments under Section 6(a)(i) greater than twenty-four (24)
months shall be considered non-qualified deferred compensation, for which the
Company shall establish a deferred compensation plan if none is otherwise
available to pay the benefit. Severance pay described in this Section 6 will be
made in accordance with the Company's regular payroll practice, will be subject
to legally required withholding and shall commence on the next
regularly-scheduled pay date that occurs at least eight (8) days after the
Executive's execution of the Agreement and Release. The continuation of
healthcare coverage will not be counted toward the Executive's COBRA
entitlement.

            (b) The Executive acknowledges that the payments and benefits set
forth in this Section constitute consideration over and above anything of value
that he would be entitled to but for this Agreement. The Executive's acceptance
of the consideration to be made under this Section is in full accord and
satisfaction of all claims arising out of the Executive's employment with the
Company.

      7. Arbitration. Any disagreement or claim (other than a claim for
injunctive relief for violation of Sections 5 or 8 hereof) arising out of or
relating to this Agreement, or the breach thereof, or its termination shall be
finally settled by arbitration in Cambria County, Pennsylvania or Pittsburgh,
Pennsylvania pursuant to the rules of the American Arbitration Association
regarding employment disputes. In such instances, it is agreed that the dispute
shall be submitted to final and binding arbitration by one arbitrator; provided,
however, that either party may request that there be three arbitrators, in which
case each party shall select one arbitrator, and the two arbitrators so selected
shall select a third. All costs of arbitration (other than the costs of a
party's own witnesses and professional advisors) shall be split equally between
the parties.
<PAGE>
      8. Additional Covenants of Executive. The Executive hereby agrees that:

            (a) Employee Work. All written and graphic materials, computer
software, inventions, discoveries, patents, patent applications developed,
authored, prepared, conceived or made by the Executive during the term of his
employment hereunder and which are related to or are the product of the tasks,
assignments and performance by the Executive of the duties of his employment and
relate to the Business (defined below) of the Company or any of its Affiliates
(collectively, "EMPLOYEE WORK") shall be the sole property of the Company and,
to the extent applicable, shall be "work made for hire" under and as defined in
the Copyright Act of 1976, 17 U.S.C. Section 1 et seq. For purposes of this
subsection (a), the term "BUSINESS" shall mean providing and/or developing
financial services. The Executive hereby agrees to disclose promptly to the
Company all Employee Work and hereby agrees to assign to the Company all right,
title and interest in and to such Employee Work and shall execute all such
documents and instruments as the Company may reasonably determine are necessary
or desirable in order to give effect to this subsection or to preserve, protect
or enforce the Company's rights with respect to any Employee Work.

            (b) Return of Company Property. Promptly after termination of the
Executive's employment hereunder for any reason, the Executive or his personal
representative shall return to the Company all property of the Company then in
his possession, including without limitation papers, documents, computer disks,
vehicles, keys, credit cards and confidential information, and shall neither
make nor retain copies of the same.

      9. Representations and Warranties of the Executive. The Executive hereby
represents and warrants to the Company that he is not a party to or otherwise
subject to or bound by any contract, agreement or understanding which would
limit or otherwise adversely affect his ability to perform his duties hereunder
or which would be breached by his execution and delivery of this Agreement or by
the performance of his duties hereunder. The Executive further represents and
warrants that his employment by the Company will not require him to disclose or
use any confidential information belonging to prior employers or other persons
or entities.

      10. Notice. Any notice required to be provided to the Executive hereunder
shall be given to the Executive in writing by certified mail, return receipt
requested, or by Federal Express, addressed to the Executive at the address of
record with the Company, or at such other place as the Executive may from
time-to-time designate in writing. Any notice which the Executive is required to
give to the Company hereunder shall be given in writing by certified mail,
return receipt requested, or by Federal Express, addressed to the Senior Human
Resources Officer at its principal office. The dates of mailing any such notice
shall be deemed to be the date of delivery thereof.
<PAGE>
      11. Miscellaneous. The validity or enforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
This Agreement embodies the entire Agreement between the parties hereto and
supersedes any and all prior or contemporaneous, oral or written understandings,
negotiations, or communications on behalf of such parties. This Agreement may be
executed in several counterparts, each of which shall be deemed original, but
all of which together shall constitute one and the same instrument. This
Agreement may be delivered by telefax, and such telefax copy shall be as
effective as delivery of a manually executed counterpart. The waiver by either
party of any breach or violation of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach or violation
hereof. This Agreement is executed in and shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without giving
effect to any conflict of laws provision. This Agreement shall be amended only
by written agreement of both parties hereto. This Agreement shall inure to the
benefit of the Company and its successors and assigns.

                                             AMERISERV FINANCIAL, INC.

                                             By:    /s/ Craig G. Ford
                                                    ----------------------------
                                             Name:  Craig G. Ford
                                                    ----------------------------
                                             Title: Chairman, President & CEO
                                                    ---------------------------

                                             /s/ Allan R. Dennison
                                             ------------------------------
                                             Allan R. Dennison



</TEXT>
</DOCUMENT>
