PENNFED FINANCIAL SERVICES INC
<DOCUMENT>
<TYPE>EX-10.J
<SEQUENCE>4
<FILENAME>ex10-j.txt
<TEXT>

                                                                   Exhibit 10(j)

                            PENN FEDERAL SAVINGS BANK
                    SUPPLEMENTAL EXECUTIVE DEATH BENEFIT PLAN

          RESTATED FROM THE SUPPLEMENTAL EXECUTIVE LIFE INSURANCE PLAN
                           EFFECTIVE NOVEMBER 1, 2003

<PAGE>

                           PENN FEDERAL SAVINGS BANK
                    SUPPLEMENTAL EXECUTIVE DEATH BENEFIT PLAN

                           EFFECTIVE NOVEMBER 1, 2003

                                     Purpose
                                     -------

      The purpose of the Plan is to provide supplemental death benefits from
certain life insurance policies held by Penn Federal Savings Bank (the
"Company") to a select group of employees who contribute materially to the
continued growth, development and future business success of Penn Federal
Savings Bank and its Affiliates.

                                    ARTICLE I
                                   Definitions
                                   -----------

      For purposes of the Plan, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:

      "Affiliates" shall mean any entity that, directly or indirectly, through
      ------------
      one or more intermediaries, controls, is controlled by, or is under common
      control with the Company.

      "Beneficiary" shall mean one or more persons, estates or other entities,
      ------------
      designated in accordance with Article 6, that are entitled to receive
      benefits under the Plan upon the death of a Participant.

      "Beneficiary Designation Form" shall mean the form that a Participant
      ------------------------------
      completes, signs and returns to the Committee to designate one or more
      Beneficiaries. A policy endorsement form may be used as a Beneficiary
      Designation Form.

      "Board" shall mean the board of directors of the Company.
      -------

      "Change in Control" shall have the same meaning as under Section 280G of
      -------------------
      the Code and the regulations thereunder. The time at which a Change in
      Control occurs also shall be determined under Section 280G of the Code and
      the regulations thereunder.

      "Claimant" shall have the meaning set forth in Section 9.1.
      ----------

      "Code" shall mean the Internal Revenue Code 1986, as it may be amended
      ------
      from time to time.

      "Committee" shall mean the committee described in Article 8.
      -----------

      "Company" shall mean Penn Federal Savings Bank.
      ---------

      "Compensation" shall mean the annual salary relating to services performed
      --------------
      by a Participant for the Company and its Affiliates during the calendar
      year preceding the calendar year in which the Participant experiences a
      Termination of Employment (whether or not paid or included on the Federal
      Income Tax Form W-2 for such calendar

<PAGE>

      year), excluding bonuses of any type or nature, fringe benefits, stock
      options, other stock based compensation, relocation expenses, non-monetary
      awards, and automobile and other allowances paid to a Participant for
      employment services rendered (whether or not such allowances are included
      in the Participant's gross income). Compensation shall be calculated
      before reduction for compensation voluntarily deferred or contributed by
      the Participant pursuant to all qualified or non-qualified plans of the
      Company and its Affiliates and shall be calculated to include amounts not
      otherwise included in the Participant's gross income; provided, however,
      that all such amounts will be included in compensation only to the extent
      that, had there been no such plan, the amount would have been payable in
      cash to the Participant.

      "Death Benefit" shall mean the Primary Death Benefit or the Supplemental
      ---------------
      Death Benefit, as applicable.

      "Employee" shall mean a person who is classified as an employee of the
      ----------
      Company or its Affiliates.

      "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
      -------
      it may be amended from time to time.

      "Insurer" shall mean the insurance company issuing a Policy or Policies on
      ---------
      the life of a Participant.

      "Participant" shall mean any Employee who is selected to participate in
      -------------
      the Plan by the Committee and who satisfies the provisions of Article II.

      "Plan" shall mean this Supplemental Executive Death Benefit Plan, which
      ------
      shall be evidenced by this instrument, as may be amended from time to
      time.

      "Plan Year" shall have the same meaning as the fiscal year of the Company.
      -----------

      "Policy or Policies" shall mean the individual insurance policy (or
      --------------------
      policies) acquired by the Company for purposes of insuring a Participant's
      life under this Plan and for providing the benefits hereunder.

      "Primary Death Benefit" shall mean a death benefit payable from a Policy
      -----------------------
      (or Policies) in an amount equal to one times the Participant's
      Compensation.

      "Qualified Termination of Employment" shall mean a Participant's
      -------------------------------------
      Termination of Employment, other than on account of a Termination for
      Cause, after the Participant has completed 10 Years of Service.

      "SERP Death Benefit" shall mean a death benefit payable from a Policy (or
      --------------------
      Policies) in an amount equal to six hundred thousand dollars ($600,000).

      "Termination for Cause" or "Terminated for Cause" shall mean the
      -----------------------    ----------------------
      involuntary termination of service of a Participant on account of
      dishonesty, incompetence, willful misconduct, breach of a fiduciary duty
      involving personal profit, intentional failure to perform stated duties,
      willful violation of any law, rule, or regulation (excluding violations
      which do not have a material adverse affect on the Company) or final
      cease-and-desist

<PAGE>

      order. The Committee shall have sole discretion to determine whether a
      Termination for Cause has occurred.

      "Termination of Employment" shall mean the severing of employment with the
      ---------------------------
      Company and its Affiliates (including on account of the Participant's
      death), other than on account of Termination for Cause.

      "Years of Service" shall mean the total number of Plan Years (or fraction
      ------------------
      thereof determined on a months basis) that the Participant has been
      employed on a full time basis by the Company or an Affiliate. If a
      Participant is authorized by the Company or its Affiliates for any reason
      to take a leave of absence from employment with the Company or its
      Affiliates, such Participant shall continue to be considered employed by
      the Company during such leave of absence (and therefore not to have
      experienced a Termination of Employment) and service during the leave of
      absence shall be credited for purposes of determining the Participant's
      Years of Service.

                                    ARTICLE 2
                       Selection, Enrollment, Eligibility
                       ----------------------------------

2.1   Selection by Committee. Participation in the Plan shall be limited to
      ----------------------
      Employees who are within a select group of management and highly
      compensated Employees, as determined by the Committee in its sole
      discretion from time to time. Participants shall be listed on Exhibit A
      attached hereto, as in effect from time to time.

2.2   Enrollment Requirements. As a condition to participation, each selected
      -----------------------
      Employee shall complete, execute and return to the Committee such
      documents and information as the Committee requires, including documents
      and information required by the Insurer to issue the Policies. In
      addition, the Committee may prescribe such other enrollment requirements
      as it determines in its sole discretion are necessary or appropriate. A
      Participant shall at the request of the Company submit to medical
      examinations and supply such information and execute such documents as may
      be required by the Insurer to whom the Company has applied for insurance.

2.3   Termination of Participation. If the Committee determines in good faith
      ----------------------------
      that a Participant no longer qualifies as a member of a select group of
      management or highly compensated employees, as membership in such group is
      determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of
      ERISA, the Committee shall have the right, in its sole discretion to
      terminate the Participant's participation herein.

                                    ARTICLE 3
                                  Death Benefit
                                  -------------

      Subject to, and limited by, all of the provisions of this Plan:

      (a)   The Beneficiary of a Participant not described in (b) below shall,
            upon the death of such Participant after the Participant has
            experienced a Qualified Termination of Employment, receive the
            Participant's Primary Death Benefit.

<PAGE>

      (b)   The Beneficiary of a Participant who also participates in the Penn
            Federal Savings Bank Supplemental Executive Retirement Plan shall,
            upon the death of such Participant, receive the SERP Death Benefit
            and not the Primary Death Benefit.

      The Primary Death Benefit or the SERP Death Benefit, as the case may be,
      shall be paid to the Participant's Beneficiary in a cash lump sum within
      120 days following the date of the Participant's death.

                                    ARTICLE 4
                                Funding/Policies
                                ----------------

4.1   Informal Funding. Except as otherwise provided herein, the Company's and
      ----------------
      its Affiliate's obligations under the Plan shall be an unfunded and
      unsecured promise to pay. The Company and its Affiliates shall not be
      obligated under any circumstances to fund in advance its obligations under
      the Plan, and when the benefit amount is paid it shall be expensed out of
      the general assets of the Company and its Affiliates. Notwithstanding the
      foregoing, the Company and its Affiliates may, at its sole option, or by
      agreement, informally fund its obligations under the Plan in whole or in
      part, provided, however, that in no event shall such informal funding be
      construed to create any trust fund, escrow account or other security for
      any Participant with respect to the payment of any benefit under the Plan,
      other than as permitted by Internal Revenue Service and Department of
      Labor rules and regulations for unfunded welfare benefit plans.

4.2   Policies. Notwithstanding anything in Section 4.1 to the contrary, the
      ---------
      Company may acquire Policies to provide the Death Benefits provided for
      hereunder, in such amounts and in such forms as it may choose. The
      Policies acquired with respect to a Participant shall be used to provide
      that Participant's Death Benefit. The Company shall own the Policies and
      shall have the right to exercise all incidents of ownership thereof. No
      Participant shall have any interest whatsoever in any such Policy or
      Policies except as provided for in this Plan. The Company shall pay all
      premiums due on the Policies from its general assets. The Company shall be
      the direct beneficiary of all death benefit proceeds paid from the
      Policies in excess of that used to pay the Participant's Death Benefit.
      The Company shall impute income to the Participants to reflect the value
      of the term insurance protection the Participants are receiving with
      respect to their Death Benefit, in accordance with applicable Internal
      Revenue Service regulations or other guidance.

4.3   Insurers. An Insurer shall be bound only by the terms of the Policy or
      --------
      Policies that it has issued with respect to this Plan. Any payments the
      Insurer makes or actions it takes in accordance with a Policy shall fully
      discharge it from all claims, suits and demands of all persons related to
      that Policy. The Insurer shall not be bound by the provisions of this
      Plan. The Insurer shall have the right to rely on the Company or the
      Committee's representation with regard to any definitions, interpretations
      or Policy interests as specified under this Plan.

<PAGE>

                                    ARTICLE 5
                              Regulatory Provisions
                              ---------------------

      The obligations of the Company to a Participant under the Plan are subject
to the following restrictions:

5.1   Termination for Cause. If a Participant's service as an Employee is
      ---------------------
      Terminated for Cause, no benefits shall be paid to him or his
      Beneficiaries under the Plan. If after the Participant's Termination of
      Employment it is subsequently determined that he was Terminated for Cause,
      then he shall no longer be entitled to a Death Benefit. If the Participant
      has died and the Death Benefit has been paid, then the recipient(s) of the
      Death Benefits shall be obligated to return to the Company the cumulative
      amount of the Death Benefit previously paid.

5.2   Temporary Suspension or Prohibition. If a Participant is suspended and/or
      -----------------------------------
      temporarily prohibited from participating in the conduct of the Company's
      affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal
      Deposit Insurance Act ("FDIA"), 12 U.S.C. ss.1818(e)(3) and (g)(1), the
      Company's obligations to such Participant under the Plan shall be
      suspended as of the date of service of such notice, unless stayed by
      appropriate proceedings. If the charges in the notice are dismissed, the
      Company may in its discretion reinstate in whole or in part the Death
      Benefit.

5.3   Permanent Suspension or Prohibition. If a Participant is removed and/or
      -----------------------------------
      permanently prohibited from participating in the conduct of the Company's
      affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12
      U.S.C. ss.1818(e)(4) and (g)(1), all obligations of the Company to such
      Participant under the Plan shall terminate as of the effective date of the
      order.

5.4   Default. If the Company is in default (as defined in Section 3(x)(1) of
      -------
      the FDIA), all obligations of the Company to Participants and
      Beneficiaries under the Plan shall terminate as of the date of default.

5.5   Termination by Regulators. All obligations of the Company to Participants
      -------------------------
      and Beneficiaries under the Plan shall be terminated, except to the extent
      determined that continuation of the Plan is necessary for the continued
      operation of the Company: (i) by the Director of the Office of Thrift
      Supervision (the "OTS Director") or his designee, at the time the Federal
      Deposit Insurance Corporation enters into an agreement to provide
      assistance to or on behalf of the Company under the authority contained in
      Section 13(c) of the FDIA; or (ii) by the OTS Director or his designee, at
      the time the OTS Director or his designee approves a supervisory merger to
      resolve problems related to operation of the Company or when the Company
      is determined by the OTS Director to be in an unsafe or unsound condition.

5.6   Other Regulatory Restrictions on Payment. Notwithstanding anything herein
      ----------------------------------------
      to the contrary, (1) any payments made by the Company under the Plan shall
      be subject to and conditioned upon compliance with 12 U.S.C. ss.1828(k)
      and any regulations promulgated thereunder and (2) payments contemplated
      to be made by the Company under the Plan shall not be immediately payable
      to the extent such payments are barred or prohibited by an action or order
      issued by the Federal Deposit Insurance Corporation.

<PAGE>

                                    ARTICLE 6
                             Beneficiary Designation
                             -----------------------

6.1   Beneficiary. Each Participant shall have the right, at any time, to
      -----------
      designate his Beneficiary(ies) (both primary as well as contingent) to
      receive any benefits payable under the Plan upon the death of the
      Participant. The Beneficiary designated under the Plan may be the same as
      or different from the Beneficiary designated under any other plan of the
      Company or its Affiliates in which the Participant participates; provided,
      however, that with respect to the SERP Death Benefit, if the Participant's
      Beneficiary under this Plan is not entirely consistent with the
      Participant's beneficiary designation under the Penn Federal Savings Bank
      Supplemental Executive Retirement Plan, then the Beneficiary designation
      under that Plan will control with respect to the payment of the SERP Death
      Benefit payable hereunder.

6.2   Beneficiary Designation: Change. A Participant shall designate his
      -------------------------------
      Beneficiary by completing and signing the Beneficiary Designation Form and
      returning it to the Committee (or where a policy endorsement form is used
      as a Beneficiary Designation Form, the form is returned to, and accepted
      by, the Insurer). A Participant shall have the right to change a
      Beneficiary by completing, signing and otherwise complying with the terms
      of the Beneficiary Designation Form and the Committee's rules and
      procedures, as in effect from time to time. Upon the acceptance by the
      Committee of a new Beneficiary Designation Form, all Beneficiary
      designations previously filed shall be canceled. The Committee shall be
      entitled to rely on the last Beneficiary Designation Form filed by the
      Participant and accepted by the Committee prior to his death.

6.3   Acknowledgment. No designation or change in designation of a Beneficiary
      --------------
      shall be effective until received and acknowledged in writing by the
      Committee (or, where a policy endorsement form is used as the Beneficiary
      Designation Form, the form is received and accepted by the Insurer).

6.4   No Beneficiary Designation. If a Participant fails to designate a
      --------------------------
      Beneficiary as provided in Sections 6.1, 6.2 and 6.3 above or, if all
      designated Beneficiaries predecease a Participant or die prior to complete
      distribution of the Participant's benefits, then a Participant's
      designated Beneficiary shall be deemed to be his surviving spouse. If a
      Participant has no surviving spouse, the benefits remaining under the Plan
      to be paid to a Beneficiary shall be payable to the Participant's estate.

6.5   Doubt as to Beneficiary. If the Committee has any doubt as to the proper
      -----------------------
      Beneficiary to receive payments pursuant to the Plan, the Committee shall
      have the right, exercisable in its discretion, to cause the Company and
      its Affiliates to withhold

<PAGE>

      such payments until this matter is resolved to the Committee's
      satisfaction.

6.6   Discharge of Obligations. The payment of benefits under the Plan to a
      ------------------------
      Beneficiary shall fully and completely discharge the Company and its
      Affiliates and the Committee from all further obligations under the Plan
      with respect to the Participant.

                                    ARTICLE 7
                     Termination, Amendment or Modification
                     --------------------------------------

7.1   Termination. The Company reserves the right to terminate its sponsorship
      -----------
      of the Plan at any time prior to occurrence of a Change in Control, with
      respect to any or all of its Participants, by action of the Board. Upon
      termination of sponsorship of the Plan by the Company prior to occurrence
      of a Change in Control, no further Death Benefits shall be provided, other
      than with respect to a Participant whose death occurs prior to the
      termination of the Plan. The Plan may not be terminated on or after the
      occurrence of a Change in Control.

7.2   Amendment. The Company may, at any time, amend or modify the Plan in whole
      ---------
      or in part by action of the Board; provided, however, that the amendment
      of the Plan shall not adversely affect the Death Benefit of a Participant
      whose death occurs prior to the effective date of the amendment or
      modification.

                                    ARTICLE 8
                                 Administration
                                 --------------

8.1   Committee Duties. The Plan shall be administered by a Committee which
      ----------------
      shall consist of the Board, or such committee as the Board shall appoint.
      Members of the Committee may be Participants under the Plan. The Committee
      shall also have the discretion and authority to (i) make, amend,
      interpret, and enforce all appropriate rules and regulations for the
      administration of the Plan and (ii) decide or resolve any and all
      questions including interpretations of the Plan, as may arise in
      connection with the Plan. Any individual on the Committee who is a
      Participant shall not vote or act on any matter relating solely to
      himself. When making a determination or calculation, the Committee shall
      be entitled to rely on information furnished by a Participant or the
      Company.

8.2   Agents. In the administration of the Plan, the Committee may, from time to
      ------
      time, employ agents and delegate to them such administrative duties as it
      sees fit (including acting through a duly appointed representative) and
      may from time to time consult with counsel who may be counsel to the
      Company and its Affiliates.

8.3   Binding Effect of Decisions. The decision or action of the Committee with
      ---------------------------
      respect to any question arising out of or in connection with the
      administration, interpretation and application of the Plan and the rules
      and regulations promulgated hereunder shall be final and conclusive and
      binding upon all persons having any interest in the Plan.

<PAGE>

8.4   Indemnity of Committee. The Company shall indemnify and hold harmless the
      ----------------------
      members of the Committee, and any person to whom the duties of the
      Committee may be delegated, against any and all claims, losses, damages,
      expenses or liabilities arising from any action or failure to act with
      respect to the Plan, except in the case of gross misconduct by the
      Committee or any of its members or any such delegate.

8.5   Information. To enable the Committee to perform its functions, the Company
      -----------
      and its Affiliates shall supply full and timely information to the
      Committee as the Committee may reasonably request.

                                    ARTICLE 9
                                Claims Procedures
                                -----------------

9.1   Presentation of Claim. Any Participant or Beneficiary (referred to herein
      ---------------------
      as a "Claimant") may deliver to the Committee a written claim for a
      determination with respect to the amounts distributable to such Claimant
      from the Plan. If such a claim relates to the contents of a notice
      received by the Claimant, the claim must be made within 60 days after such
      notice was received by the Claimant. All other claims must be made within
      180 days of the date on which the event that caused the claim to arise
      occurred. The claim must state with particularity the determination
      desired by the Claimant.

9.2   Notification of Decision. The Committee shall consider a Claimant's claim
      ------------------------
      within a reasonable time, and shall notify the Claimant in writing:

      (a)   that the Claimant's requested determination has been made, and that
            the claim has been allowed in full; or

      (b)   that the Committee has reached a conclusion contrary, in whole or in
            part, to the Claimant's requested determination, and such notice
            must set forth in a manner calculated to be understood by the
            Claimant:

                  (i) the specific reason(s) for the denial of the claim, or any
                  part of it;

                  (ii) specific reference(s) to pertinent provisions of the Plan
                  upon which such denial was based;

                  (iii) 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

                  (iv) an explanation of the claim review procedure set forth in
                  Section 9.3 below.

9.3   Review of a Denied Claim. With 60 days after receiving a notice from the
      ------------------------
      Committee that a claim has been denied, in whole or in part, a Claimant
      (or the Claimant's duly authorized representative) may file with the
      Committee a written request for a review of the denial of the claim.
      Thereafter, but not later than 30 days after the review procedure began,
      the Claimant (or the Claimant's duly authorized representative):

<PAGE>

      (a)   may review pertinent documents;

      (b)   may submit written comments or other documents; and/or

      (c)   may request a hearing, which the Committee, in its sole discretion,
            may grant.

9.4   Decision on Review. The Committee shall render its decision on review
      ------------------
      promptly, and not later than 60 days after the filing of a written request
      for review of the denial, unless a hearing is held or other special
      circumstances require additional time, in which case the Committee's
      decision must be rendered within 120 days after such date. Such decision
      must be written in a manner calculated to be understood by the Claimant,
      and it must contain:

      (a)   specific reasons for the decision;

      (b)   specific reference(s) to the pertinent Plan provisions upon which
            the decision was based; and

      (c)   such other matters as the Committee deems relevant.

9.5   Legal Action. A Claimant's compliance with the foregoing provisions of
      ------------
      this Article 9 is a mandatory prerequisite to a Claimant's right to
      commence any legal action with respect to any claim for benefits under the
      Plan.

                                   ARTICLE 10
                                  Miscellaneous
                                  -------------

10.1  Unsecured General Creditor. Participants and their beneficiaries, heirs,
      --------------------------
      successors and assigns shall have no legal or equitable rights, interests
      or claims in any property or assets of the Company or its Affiliates. For
      purposes of the payment of benefits under the Plan, any and all assets of
      the Company or its Affiliates shall be, and remain the general, unpledged
      and unrestricted assets of such entity. The Company's and its Affiliates'
      obligation under the Plan shall be merely of an unfunded and unsecured
      promise to pay money in the future.

10.2  Liability. The Company's or its Affiliates' liability for the payment of
      ---------
      benefits shall be defined only by the Plan. The Company or its Affiliates
      shall have no obligation to any person except as expressly provided in the
      Plan.

10.3  Nonassignability. Neither a Participant nor any other person (other than
      ----------------
      the Company) shall have any right to commute, sell, assign, transfer,
      pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate,
      alienate or convey in advance of actual receipt, the amounts, if any,
      payable hereunder, or any part thereof, which are, and all rights to which
      are expressly declared to be, unassignable and non-transferable. No part
      of the amounts payable shall, prior to actual payment, be subject to
      seizure, attachment, garnishment or sequestration for the payment of any
      debts, judgments, alimony or separate maintenance allowed by a Participant
      or any other person, be transferable by operation of law in the event of a
      Participant's or any other person's bankruptcy or insolvency or be
      transferable to a spouse as a result of a property settlement or
      otherwise.

<PAGE>

10.4  Not a Contract of Employment. The terms and conditions of the Plan shall
      ----------------------------
      not be deemed to constitute a contract of employment between the Company
      or its Affiliates and a Participant. Nothing in the Plan shall be deemed
      to give a Participant the right to be retained in the service of the
      Company or its Affiliates or to interfere with the right of the Company or
      its Affiliates to discipline or discharge such Participant at any time.

10.5  Furnishing Information. A Participant will cooperate with the Committee by
      ----------------------
      furnishing any and all information requested by the Committee and take
      such other actions as may be requested in order to facilitate the
      administration of the Plan and the payments of benefits hereunder,
      including but not limited to, taking such physical examinations as the
      Committee may deem necessary.

10.6  Terms. Whenever any words are used herein in the masculine, they shall be
      -----
      construed as though they were in the feminine in all cases where they
      would so apply; and whenever any words are used herein in the singular or
      in the plural, they shall be construed as though they were used in the
      plural or the singular, as the case may be, in all cases where they would
      so apply.

10.7  Captions. The captions of the articles, sections and paragraphs of the
      --------
      Plan are for convenience only and shall not control or affect the meaning
      or construction of any of its provisions.

10.8  Governing Law. Subject to ERISA, the provisions of the Plan shall be
      -------------
      construed and interpreted according to the internal laws of the State of
      New Jersey without regard to its conflicts of laws and principles.

10.9  Notice. Any notice or filing required or permitted to be given to the
      ------
      Committee under the Plan shall be sufficient if in writing and
      hand-delivered, or sent by registered or certified mail, to the address
      below.

              Board of Directors
              Penn Federal Savings Bank
              622 Eagle Rock Avenue
              West Orange, New Jersey 07052-2989

      Such notice shall be deemed given as of the date of delivery or, if
      delivery is made by mail, as of the date shown on the postmark on the
      receipt for registration or certification. Any notice or filing required
      or permitted to be given to a Participant under the Plan shall be
      sufficient if in writing and hand-delivered, or sent by mail, to the last
      known address of such Participant.

10.10 Successors. The provisions of the Plan shall bind and inure to the benefit
      ----------
      of the Company or its Affiliates, and their successors and assigns and the
      Participant and the Participant's designated Beneficiaries.

10.11 Validity. In case any provision of the Plan shall be illegal or invalid
      --------
      for any reason, said illegality or invalidity shall not affect the
      remaining parts hereof, but the Plan shall be

<PAGE>

      constructed and enforced as if such illegal or invalid provision had never
      been inserted herein.

10.12 Incompetent. If the Committee determines in its discretion that a benefit
      -----------
      under the Plan is to be paid to a minor, a person declared incompetent or
      to a person incapable of handling the disposition of that person's
      property, the Committee may direct payment of such benefit to the
      guardian, legal representative or person having the care and custody of
      such minor, incompetent or incapable person. The Committee may require
      proof of minority, incompetence, incapacity or guardianship, as it may
      deem appropriate prior to distribution of the benefit. Any payment of a
      benefit shall be a payment for the account of the Participant, and shall
      be a complete discharge of any liability under the Plan for such payment
      amount

10.13 Court Order. The Committee is authorized to make any payments directed by
      -----------
      court order in any action in which the Plan or the Committee has been
      named as a party.

      The Company has signed the Plan as of __________, 2003.

                                        PENN FEDERAL SAVINGS BANK


                                        By: ____________________________
                                        Name: __________________________
                                        Title: _________________________


</TEXT>
</DOCUMENT>
