ATLANTIC LIBERTY FINANCIAL CORP
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<TYPE>EX-10.2
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<FILENAME>d15917_ex102.htm
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<P ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>EX-10.2</B></FONT></FONT>&nbsp;<BR></P>

<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>EMPLOYMENT
AGREEMENT<BR>FOR<BR>ATLANTIC
LIBERTY FINANCIAL CORP.</B></FONT></FONT></P>


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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">This
Agreement is made effective as of the 15<SUP>th</SUP> day of December, 2004 by
and between Atlantic Liberty Financial Corp., a Delaware corporation (the
&#147;Company&#148;), with its principal administrative office at 186 Montague
Street, Brooklyn, New York 11201-3001, and William M. Gilfillan
(&#147;Executive&#148;).</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>WHEREAS</B>,
Executive is currently employed as Executive Vice President, Chief Financial
Officer and Corporate Secretary of the Company, which owns 100% of the Common
Stock of Atlantic Liberty Savings, F.A., a federal stock savings association
(the &#147;Association&#148;); and</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>WHEREAS</B>,
the Company and Executive have previously entered into an employment agreement
as of October 16, 2002, governing the terms and conditions of Executive&#146;s
employment by the Company; and</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>WHEREAS</B>,
in consideration of Executive&#146;s outstanding service to the Company, the
Company and Executive desire to amend the terms of Executive&#146;s Agreement by
providing compensation to Executive to cover any excise taxes incurred in the
event of an excess parachute payment; and</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>WHEREAS</B>,
the Association and Executive have also entered into an employment agreement
dated as of October&nbsp;16, 2002, governing the terms and conditions of
Executive&#146;s employment by the Association (the &#147;Association Employment
Agreement&#148;).</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">N<B>OW,
THEREFORE</B>, in consideration of the premises and the mutual covenants and
conditions hereinafter set forth, the Company and Executive hereby agree as
follows:</FONT></FONT></P>

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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;POSITION
AND RESPONSIBILITIES</B></FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">During
the period of his employment hereunder, Executive agrees to serve as Executive
Vice President, Chief Financial Officer and Corporate Secretary of the Company.
During said period, Executive also agrees to serve, if elected, as an officer
and director of any subsidiary or affiliate of the Company. Failure to reelect
Executive as Executive Vice President, Chief Financial Officer and Corporate
Secretary without the consent of Executive during the term of this Agreement
shall constitute a breach of this Agreement.</FONT></FONT></P>

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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TERMS AND
DUTIES</B></FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;The
period of Executive's  employment  under this Agreement shall begin as of the date
first above written  and shall  continue  through  January 31, 2007.  Commencing on
January 31, 2005,  and continuing on January 31st of  each year  thereafter  (the
&quot;Anniversary  Date&quot;),  this Agreement shall renew for an additional year such
that the  remaining term shall be three (3) years unless written  notice of  non-renewal
(&quot;Non-Renewal  Notice&quot;) is provided  to Executive at least thirty (30) days and
not more than sixty (60) days prior to any such  Anniversary  Date, that  this Agreement
shall  terminate at the end of thirty-six  (36) months  following such  Anniversary
Date.  Prior to  each notice period for non-renewal,  the  disinterested  members of the
Board of Directors of the Company (&quot;Board&quot;)  will conduct a  comprehensive
performance  evaluation and review of Executive for purposes of determining  whether  to
extend the Agreement, and the results thereof shall be included in the minutes of the
Board's meeting.</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;During
the period of his  employment  hereunder,  except for  periods of absence
occasioned  by  illness,  reasonable  vacation  periods,  and reasonable  leaves of
absence,  Executive shall  faithfully  perform his duties  hereunder including activities
and services related to the organization, operation and management of the Company.</FONT></FONT></P>

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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMPENSATION AND REIMBURSEMENT</B></FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;The
compensation  specified  under this Agreement  shall  constitute the salary and
benefits paid for the  duties  described in Section  2(b). In  consideration  of the
services to be rendered by Executive  hereunder,  the  Company and/or its  subsidiaries
shall pay Executive as compensation a salary of not less than One Hundred Seventy</FONT></FONT></P>





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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Seven  Thousand
Five Hundred and 00/100's Dollars  ($177,500.00)  per year (&quot;Base  Salary&quot;).
Such Base Salary shall  be payable  bi-weekly.  During the period of this  Agreement,
Executive's  Base Salary  shall be reviewed at least  annually;  the first  such  review
will be made no later  than  January  31 of each year  during  the term of  this
Agreement  and shall be  effective  from the first day of said month  through the  end of
the  calendar  year.  Such  review  shall be  conducted  by a Committee  designated  by
the Board of  Directors of the Company and the Board of  Directors  of the  Association
(collectively  the  &quot;Boards&quot;),  and the  Boards  may  increase,  but not
decrease,  Executive's  Base  Salary  (any  increase  in Base  Salary  shall  become the
&quot;Base  Salary&quot; for  purposes of this  Agreement).  In addition to  the Base
Salary  provided in this Section  3(a),  the Company  and/or its  subsidiaries  shall
provide  Executive  at no cost to  Executive  with all such other  benefits  as  are
provided  uniformly  to  permanent full-time employees of the Company and/or its
subsidiaries.</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;The
Company and/or its subsidiaries will provide  Executive with employee benefit plans,
arrangements and  perquisites  substantially  equivalent to those in which Executive was
participating or otherwise  deriving benefit  from  immediately  prior to the beginning
of the term of this  Agreement,  and the Company and/or its  subsidiaries  will not,
without  Executive's prior written consent,  make any changes in such plans,
arrangements or perquisites  which would adversely  affect  Executive's  rights or
benefits  thereunder.  Without limiting the generality of the  foregoing  provisions of
this Section 3(b),  Executive will be entitled to participate in or receive benefits
under  any employee benefit plans including but not limited to, retirement plans,
supplemental  retirement plans, pension  plans,  profit-sharing  plans,
health-and-accident  plans,  medical coverage or any other employee benefit plan or
arrangement  made available by the Company and/or its  subsidiaries in the future to its
senior  executives and key  management employees,  subject to and on a basis consistent
with the terms,  conditions and overall  administration  of such plans and  arrangements.
Executive will be entitled to incentive  compensation  and bonuses as provided in  any
plan of the Company and/or its  subsidiaries  in which  Executive is eligible to
participate  (and he shall be  entitled  to a pro rata  distribution  under any
incentive  compensation  or bonus  plan as to any year in which a  termination of
employment  occurs,  other than  termination  for Cause).  Nothing paid to Executive
under any such  plan or arrangement  will be deemed to be in lieu of other  compensation
to which Executive is entitled under this  Agreement.</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the Base Salary  provided  for by paragraph  (a) of this Section 3, the
Company  and/or its  subsidiaries shall pay or reimburse  Executive for all reasonable
travel and other reasonable  expenses incurred by  Executive in performing his
obligations  under this Agreement and may provide such additional  compensation in such
form and such amounts as the Board may from time to time determine.</FONT></FONT></P>

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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OUTSIDE
ACTIVITIES</B></FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Executive
may serve as a member of the board of directors of business, community and
charitable organizations subject to the approval of the Board, provided that in
each case such service shall not materially interfere with the performance of
his duties under this Agreement or present any conflict of interest. Such
service to and participation in outside organizations shall be presumed for
these purposes to be for the benefit of the Company, and the Company shall
reimburse Executive his reasonable expenses associated therewith.</FONT></FONT></P>

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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WORKING
FACILITIES AND EXPENSES</B></FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Executive&#146;s
principal place of employment shall be the Company&#146;s principal executive
offices. The Company shall provide Executive, at his principal place of
employment, with a private office, stenographic services and other support
services and facilities suitable to his position with the Company and necessary
or appropriate in connection with the performance of his duties under this
Agreement. The Company shall reimburse Executive for his ordinary and necessary
business expenses incurred in connection with the performance of his duties
under this Agreement, including, without limitation, fees for memberships in
such clubs and organizations that Executive and the Board mutually agree are
necessary and appropriate to further the business of the Company, and travel and
reasonable entertainment expenses. Reimbursement of such expenses shall be made
upon presentation to the Company of an itemized account of the expenses in such
form as the Company may reasonably require.</FONT></FONT></P>
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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAYMENTS
TO EXECUTIVE UPON AN EVENT OF TERMINATION</B></FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
provisions of this Section shall in all respects be subject to the terms and
conditions stated in Sections&nbsp;9 and 18.</FONT></FONT></P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;The
provisions of this Section 6 shall apply upon the  occurrence of an Event of
Termination  (as herein  defined)  during  Executive's  term of employment  under this
Agreement.  As used in this  Agreement,  an &quot;Event of  Termination&quot; shall mean
and include any one or more of the following:</FONT></FONT></P>



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     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> the
termination by the Company or the Association of Executive's  full-time  employment
hereunder for any  reason other than (A)  Disability or Retirement,  as defined in
Section 7 below,  or (B)  Termination for Cause as defined in Section 8 hereof; or</FONT></FONT></P></TD>
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     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> Executive's
resignation from the Association's employ, upon any</FONT></FONT></P></TD>
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     <TD ALIGN="LEFT" WIDTH="6%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(A) </FONT></FONT></TD>
     <TD WIDTH="78%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> failure
to elect or reelect or to appoint or  reappoint  Executive  as  Executive  Vice
President,  Chief  Financial Officer and Corporate Secretary,</FONT></FONT></P></TD>
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     <TD ALIGN="LEFT" WIDTH="6%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(B) </FONT></FONT></TD>
     <TD WIDTH="78%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> material
change  in  Executive's  function,  duties,  or  responsibilities,  which  change  would
cause  Executive's position to become one of lesser responsibility,  importance, or scope
from the position and attributes thereof described in Section 1, above,</FONT></FONT></P></TD>
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     <TD ALIGN="LEFT" WIDTH="6%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(C) </FONT></FONT></TD>
     <TD WIDTH="78%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> liquidation
or dissolution  of the Company or the  Association  other than  liquidations  or
dissolutions  that are caused by reorganizations that do not affect the status of
Executive, or</FONT></FONT></P></TD>
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     <TD ALIGN="LEFT" WIDTH="6%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(D) </FONT></FONT></TD>
     <TD WIDTH="78%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> material
breach of this Agreement by the Company.</FONT></FONT></P></TD>
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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Upon
the occurrence of any event described in clauses (ii) (A), (B), (C)or (D),
above, Executive shall have the right to elect to terminate his employment under
this Agreement by resignation upon sixty (60) days prior written notice given
within a reasonable period of time not to exceed four calendar months after the
initial event giving rise to said right to elect. Notwithstanding the preceding
sentence, in the event of a continuing breach of this Agreement by the Company,
Executive, after giving due notice within the prescribed time frame of an
initial event specified above, shall not waive any of his rights solely under
this Agreement and this Section by virtue of the fact that Executive has
submitted his resignation but has remained in the employment of the Company and
is engaged in good faith discussions to resolve any occurrence of an event
described in clauses (A), (B), (C) or (D) above.</FONT></FONT></P>

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     <TD ALIGN="LEFT" WIDTH="6%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(iii) </FONT></FONT></TD>
     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> Executive's
involuntary  termination by the Company or voluntary resignation from the Company's
employ on  the effective  date of, or at any time  following,  a Change in Control
during the term  of this  Agreement.  For these  purposes,  a Change in  Control  of the
Company  or the  Association  shall mean a change in control of a nature  that:  (i)
would be required to  be reported  in  response  to Item 5.01 of the current  report on
Form 8-K, as in effect  on the date hereof,  pursuant to Section 13 or 15(d) of the
Securities  Exchange Act of  1934 (the  &quot;Exchange  Act&quot;);  or (ii) results in a
Change in Control of the  Association  or the  Company  within the  meaning  of the Home
Owners'  Loan Act,  as  amended,  and  applicable rules and regulations  promulgated
thereunder  (collectively,  the &quot;HOLA&quot;) as  in effect at the time of the
Change in  Control;  or (iii)  without  limitation  such a  Change in  Control  shall be
deemed to have  occurred  at such time as (a) any  &quot;person&quot;  (as the term is
used in  Sections  13(d) and 14(d) of the  Exchange  Act) is or  becomes  the
&quot;beneficial  owner&quot; (as defined in Rule 13d-3 under the Exchange Act),
directly or  indirectly,  of  securities  of the  Company  representing  25% or more of
the  combined  voting power of Company's  outstanding  securities,  except for any
securities purchased  by the  Association's  employee stock  ownership plan or trust;  or
(b)  individuals who  constitute  the Board on the date hereof (the  &quot;Incumbent
Board&quot;)  cease for any reason  to</FONT></FONT></P></TD>
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     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">constitute  at least a  majority  thereof,
provided  that  any  person  becoming  a  director  subsequent  to the date hereof  whose
election  was  approved by a vote of at  least  three-quarters  of  the  directors
comprising  the  Incumbent  Board,  or  whose  nomination  for  election  by the
Company's  stockholders  was  approved  by  the  same  Nominating  Committee  serving
under an Incumbent Board,  shall be, for purposes of this  clause  (b),  considered  as
though he were a member of the  Incumbent  Board;  or (c) a  plan of  reorganization,
merger,  consolidation,  sale of all or substantially  all the  assets  of  the
Association  or  the  Company  or  similar  transaction  in  which  the  Association or
Company is not the surviving  institution  occurs or is  implemented;  or  (d)  a  proxy
statement  soliciting  proxies  from  stockholders  of  the  Company  is  distributed,
by someone  other than the  current  management  of the  Company,  seeking  stockholder
approval  of a plan  of  reorganization,  merger  or  consolidation  of the  Company or
similar  transaction  with one or more  corporations as a result of which the
outstanding  shares  of the  class  of  securities  then  subject  to the plan are to be
exchanged  for or  converted  into cash or  property  or  securities  not  issued by the
Company;  or (e) a tender offer is made for 25% or more of the voting  securities of the
Company  and  the  shareholders  owning  beneficially  or of  record  25% or more of the
outstanding  securities  of the Company  have  tendered or offered to sell their  shares
pursuant  to such  tender  offer and such  tendered  shares  have been  accepted  by the
tender offeror.</FONT></FONT></P></TD>
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     <TD ALIGN="LEFT" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i)</FONT></FONT></TD>
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     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
Upon the occurrence of an Event of  Termination,  as defined in Section 6(a)(i) or (ii),
on the Date of  Termination,  as defined in Section 9(b),  the Company shall pay
Executive,  or, in the  event of his subsequent death, his beneficiary or  beneficiaries,
or his estate, as the  case may be, as severance pay or liquidated  damages,  or both, a
sum equal to three (3)  times the sum of (i) the  average  annual rate of Base Salary
paid in the last three (3)  years ending in the year of  termination  and (ii) the
average rate of bonus  awarded to  Executive  during the prior three years.  At the
election of Executive,  which  election  is to be made on an annual  basis  during the
month of  January,  and which  election is  irrevocable  for the  year in  which  made
and  upon  the  occurrence  of an  Event  of  Termination,  any  payments  shall be made
in a lump sum, or paid  bi-weekly  during the  remaining term of this Agreement following
Executive's  termination.  In the event that  no election is made,  payment to Executive
will be made on a bi-weekly  basis during the  remaining  term of this  Agreement.  Such
payments  shall not be  reduced  in the event  Executive obtains other employment
following termination of employment.</FONT></FONT></P></TD>
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     <TD ALIGN="LEFT" WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) </FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="6%"></TD>
     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Upon
the  occurrence  of an  Event  of  Termination,  as  defined  in  Section  6(a)(iii),  on
the Date of  Termination,  the Company and/or its subsidiaries shall pay Executive,  or,
in the event  of his subsequent  death, his beneficiary or  beneficiaries,  or his
estate, as the case  may be,  as  severance  pay or  liquidated  damages,  or both,  a
sum equal to three (3)  times  the sum of (i) Base  Salary  and  (ii)  the  highest  rate
of  bonus  awarded  to  Executive  during the prior three years.  At the election of
Executive,  which  election  is to be made on an annual  basis  during the month of
January,  and which  election is  irrevocable  for the  year in  which  made  and  upon
the  occurrence  of an  Event  of  Termination,  any  payments  shall be made in a lump
sum, or paid  bi-weekly  during the  remaining term of this Agreement following
Executive's  termination.  In the event that  no election is made,  payment to Executive
will be made on a bi-weekly  basis during the  remaining  term of this  Agreement.  Such
payments  shall not be  reduced  in the event  Executive obtains other employment
following termination of employment.</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;
Upon the  occurrence of an Event of  Termination,  the Company  and/or its  subsidiaries
will cause to be  continued life, medical,  dental and disability coverage substantially
identical to the coverage maintained by the  Company and/or the Association for Executive
prior to his  termination,  or a payment in lieu thereof,  of not less  than $12,000 per
annum.  Such coverage shall continue for thirty-six (36) months from the Date of
Termination.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;
Upon the  occurrence  of an Event of  Termination,  Executive  will  immediately  vest in
any  outstanding  unvested stock options or shares of restricted stock of the Company
that have been awarded to him.</FONT></FONT></P>
<BR>

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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">4</FONT></FONT></P>



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<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;
Upon the occurrence of an Event of Termination,  within  sixty (60) days (or within such
shorter period to  the extent that  information can be reasonably be obtained)  following
Executive's  termination of employment with  the  Company,  a lump sum  payment in an
amount  equal to the  excess,  if any,  of: (A) the  present  value of the  benefits to
which he would be entitled  under the Company and/or the  Association's  defined  benefit
pension plan  (and any other defined  benefit plan  maintained by the Company  and/or the
Association)  if he had the additional  years of service that he would have had if he had
continued  working for the Company for a  thirty-six  (36) month  period following his
termination  earning the salary that would have been paid during the remaining  unexpired
term  of this Agreement (assuming,  if a Change in Control as defined in Section
4(a)(iii) has occurred,  that the annual  Base Salary  increases under Section 3(a) would
apply and,  additionally,  that such payment would continue for the  remaining  unexpired
term of this  Agreement),  determined  as if each such plan had  continued in effect
without  change in  accordance  with its  terms as of the day prior to his  actual  date
of his  termination  and as if such  benefits were payable  beginning on the first day of
the month  coincident  with or next  following his actual date  of his termination,  over
(B) the present value of the benefits to which he is actually  entitled under the Company
and/or the  Association's  defined  benefit  pension plan ( and any other  defined
benefit plan  maintained by the  Company and/or the Association) as of the date of his
termination,  where such present values are to be determined  using a discount rate of 6%
and the mortality  tables  prescribed  under Section 72 of the Internal Revenue Code of
1986 (&quot;Code&quot;);</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(f)&nbsp;&nbsp;&nbsp;&nbsp;Upon
the occurrence of an Event of  Termination,  within sixty (60) days (or within such
shorter period to  the extent that  information  can be  reasonably  be obtained)
following his  termination  of employment  with the  Company,  a lump sum  payment in an
amount  equal to the  present  value of the  Company  and/or the  Association's
contributions  that would have been made on his behalf under the Company and/or the
Association's  401(k) Plan and  employee stock  ownership plan (&quot;ESOP&quot;) (and
any other defined  contribution  plan maintained by the Company and/or  the  Association)
if he had  continued  working for the Company for a thirty-six  (36) month period
following his  termination  earning  the  salary  that would  have been  achieved  during
the  remaining  unexpired  term of this  Agreement  (assuming,  if a Change in Control
has  occurred,  that the annual Base Salary  increases  under Section  3(a) would apply
and,  additionally,  that such payment  would  continue for the remaining  unexpired
term of this  Agreement) and making the maximum  amount of employee  contributions
permitted,  if any, under such plan or plans,  where such present values are to be
determined using a discount rate of 6%.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(g)&nbsp;&nbsp;&nbsp;&nbsp;If
the Company gives  Executive a Non-Renewal  Notice,  or if the Company does not extend
the Agreement at  least sixty (60) days prior to the Anniversary  Date, as described in
Section 2(a) of the Agreement,  Executive may  resign  from  employment  of the  Company
at any time after such  event.  In such case,  the  Company  shall pay to  Executive
three (3) times his annual rate of Base Salary, determined at the time of termination of
employment.</FONT></FONT></P>

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<A NAME="A044"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TERMINATION UPON RETIREMENT, DISABILITY OR DEATH</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">For
purposes of this Agreement, termination by the Company of Executive&#146;s
employment based on &#147;Retirement&#148; shall mean termination of
Executive&#146;s employment by the Company of age 65, or such later date as
determined by the Board of Directors of the Company. Upon termination of
Executive&#146;s employment upon Retirement, Executive shall be entitled to all
benefits under any retirement plan of the Company and other plans to which
Executive is a party but shall not be entitled to the Termination benefits
specified in Section 6(b) through (f) hereof.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">In
the event Executive is unable to perform his duties under this Agreement on a
full-time basis for a period of six (6) consecutive months by reason of illness
or other physical or mental disability, the Company may terminate this
Agreement, provided that the Company shall continue to be obligated to pay
Executive his Base Salary for the remaining term of the Agreement, or one year,
whichever is the longer period of time, and provided further that any amounts
actually paid to Executive pursuant to any disability insurance or other similar
such program which the Company has provided or may provide on behalf of its
employees or pursuant to any workman&#146;s or social security disability
program shall reduce the compensation to be paid to Executive pursuant to this
paragraph.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">In
the event of Executive&#146;s death during the term of the Agreement, his
estate, legal representatives or named beneficiaries (as directed by Executive
in writing) shall be paid Executive&#146;s Base Salary as defined in Paragraph
3(a) at the rate in effect at the time Executive&#146;s death for a period of
one (1) year from the date of</FONT></FONT></P>
<BR>

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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">5</FONT></FONT></P>



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<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Executive&#146;s
death, and the Company will  continue to provide medical, dental, family and other
benefits normally provided  for an Executive&#146;s family for one (1) year after
Executive&#146;s death.</FONT></FONT></P>

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<A NAME="A045"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TERMINATION FOR CAUSE</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
term &#147;Termination for Cause&#148; shall mean termination because of
Executive&#146;s personal dishonesty, incompetence, willful misconduct, any
breach of fiduciary duty involving personal profit, intentional or negligent
failure to perform stated duties, willful violation of any law, rule, or
regulation (other than minor traffic violations or similar offenses) or final
cease-and-desist order, or material breach of any provision of this Agreement.
In determining incompetence, the acts or omissions shall be measured against
standards generally prevailing in the savings institutions industry. For
purposes of this paragraph, no act or failure to act on the part of Executive
shall be considered &#147;willful&#148; unless done, or omitted to be done, by
Executive not in good faith and without reasonable belief that Executive&#146;s
action or omission was in the best interest of the Association. Notwithstanding
the foregoing, Executive shall not be deemed to have been Terminated for Cause
unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of not less than three-fourths of the
members of the Board at a meeting of the Board called and held for that purpose
(after reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying Termination for Cause
and specifying the particulars thereof in detail. Executive shall not have the
right to receive compensation or other benefits for any period after Termination
for Cause.&nbsp; Any stock options granted to Executive under any stock option
plan of the Association, the Company or any subsidiary or affiliate thereof,
shall become null and void effective upon Executive&#146;s receipt of Notice of
Termination for Cause pursuant to Section 9 hereof, and shall not be exercisable
by Executive at any time subsequent to such Termination for Cause.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A046"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICE</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;
Any purported  termination by the Company or by Executive  shall be  communicated by
Notice of Termination  to the other party hereto.  For purposes of this Agreement,  a
&quot;Notice of Termination&quot;  shall mean a written notice  which shall  indicate
the specific  termination  provision  in this  Agreement  relied upon and shall set forth
in  reasonable  detail  the  facts  and  circumstances  claimed  to  provide a basis  for
termination  of  Executive's  employment under the provision so indicated.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;
&quot;Date of Termination&quot; shall mean (A) if Executive's  employment is terminated
for Disability,  thirty (30)  days after a Notice of  Termination is given  (provided
that he shall not have returned to the  performance of his  duties on a full-time  basis
during such thirty (30) day period),  and (B) if his  employment is terminated for any
other reason,  the date  specified in the Notice of  Termination  (which,  in the case of
a Termination  for Cause,  shall not be less than thirty (30) days from the date such
Notice of Termination is given).</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;
If, within thirty (30) days after any Notice of Termination is given,  the party
receiving such Notice of  Termination  notifies the other party that a dispute exists
concerning the termination,  except upon the voluntary  termination  by  Executive in
which case the Date of  Termination  shall be the date  specified in the Notice,  the
Date of  Termination  shall be the date on which the  dispute  is  finally  determined,
either  by mutual  written  agreement of the parties,  by a binding  arbitration  award,
or by a final judgment,  order or decree of a court of  competent  jurisdiction  (the
time for appeal  having  expired and no appeal  having been  perfected)  and provided
further  that the Date of  Termination  shall be  extended  by a notice of dispute  only
if such notice is given in  good faith and the party giving such notice  pursues the
resolution  of such dispute  with  reasonable  diligence.  Notwithstanding  the  pendency
of any such  dispute,  the  Association  will  continue to pay  Executive  his full
compensation  in effect when the notice giving rise to the dispute was given  (including,
but not limited to, Base  Salary) and continue  Executive as a participant in all
compensation,  benefit and insurance plans in which he was  participating  when the
notice of dispute was given,  until the dispute is finally resolved in accordance with
this  Agreement,  provided such dispute is resolved  within the term of this  Agreement.
If such dispute is not resolved  within the term of the Agreement,  the Association
shall not be obligated,  upon final resolution of such dispute,  to pay Executive
compensation  and other payments  accruing beyond the term of the Agreement.  Amounts
paid under  this Section shall be offset against or reduce any other amounts due under
this Agreement.</FONT></FONT></P>
<BR>

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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">6</FONT></FONT></P>


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<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A047"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;POST-TERMINATION OBLIGATIONS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;All
payments and benefits to Executive  under this Agreement  shall be subject to
Executive's  compliance  with  paragraph  (b) of this  Section  during  the term of this
Agreement  and for one (1)  full  year  after  the  expiration or termination hereof.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;Executive
shall,  upon reasonable  notice,  furnish such information and assistance to
the Association as  may  reasonably  be  required  by the  Association  in  connection
with any  litigation  in which it or any of its  subsidiaries or affiliates is, or may
become, a party.</FONT></FONT></P>

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<A NAME="A048"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADDITIONAL
PAYMENTS RELATED TO A CHANGE IN CONTROL</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;In
the event of a Change in Control of the  Association  or the  Company,  Executive
shall be entitled to  receive an amount  payable by the Company,  in addition to any
compensation  or benefits  paid by the  Association  pursuant to the  Association
Employment  Agreement,  which  amount  shall equal the  difference,  if any,  between
(i) the amount that would be paid by the Association under the Association  Employment
Agreement without regard to  any  reduction  that may be  required  by reason of  Section
6(h) of the  Association  Employment  Agreement,  and  (ii) the amount that is actually
paid by the Association under the terms of the Association Employment Agreement.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;
In addition,  in each calendar year that  Executive is entitled to receive  payments or
benefits under the  provisions of the  Association  Employment  Agreement,  this
Agreement  and/or a Company or  Association  sponsored  employee benefit plan, the
independent  accountants of the Company shall determine if an excess  parachute  payment
(as defined in  Section 4999  of the Code) exists.  Such  determination  shall be made
after taking any  reductions  permitted  pursuant to  Section 280G  of the Code and the
regulations  thereunder.  Any amount  determined to be an  excess parachute  payment
after taking into account such reductions shall be hereafter  referred to as the
&quot;Initial  Excess  Parachute  Payment.&quot;  As soon as  practicable  after a Change
in  Control,  the  Initial  Excess  Parachute  Payment shall be determined.  For purposes
of this  determination,  Executive shall be deemed to pay federal income  taxes at the
highest  marginal rate of federal income tax (including,  but not limited to, the
Alternative  Minimum  Tax under Code  Sections  55-59,  if  applicable)  and state and
local  income tax, if  applicable,  at the highest  marginal rate of taxation in the
state and locality of  Executive's  residence on the date such payment is payable,  net
of the maximum  reduction in the federal  income taxes which could be obtained from any
available  deduction of  such state and local taxes. Any  determination by the
independent  accountants  shall be binding on the Company and  Executive.  Within five
(5) days after such determination,  the Company shall pay Executive,  subject to
applicable  withholding requirements under applicable state or federal law an amount
equal to:</FONT></FONT></P>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
     <TD ALIGN="LEFT" WIDTH="8%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(i)</FONT></FONT></TD>
     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> twenty
percent  (20%) of the Initial  Excess  Parachute  Payment (or such other  amount  equal
to the tax  imposed under Section 4999 of the Code), and</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="TOP">
     <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
     <TD ALIGN="LEFT" WIDTH="6%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(ii) </FONT></FONT></TD>
     <TD WIDTH="84%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"> such
additional  amount (tax  allowance) as may be necessary to  compensate  Executive for the
payment by  Executive  of state and federal  income and excise taxes on the payment
provided  under  paragraph (b)(i)  above and on any payments under this  paragraph
(b)(ii).  In computing  such tax allowance,  the payment to be made under  paragraph
(b)(i)  shall be multiplied  by the &quot;gross up percentage&quot; (&quot;GUP&quot;).
The GUP shall be determined as follows:</FONT></FONT></P></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"></FONT></FONT></P>
<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Rate  <BR>GUP
=  ---------------<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1- Tax Rate</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" -->
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Tax Rate for purposes of computing the GUP shall be the highest marginal federal
and state income and employment-related tax rate, including any applicable
excise tax rate, applicable to Executive in the year in which the payment under
paragraph&nbsp;(b)(i) is made.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;
Notwithstanding  the foregoing,  if it shall subsequently be determined in a final
judicial  determination  or a final  administrative  settlement to which Executive is a
party that the excess  parachute  payment as defined  in Section 4999 of the Code,
reduced as described  above, is different from the Initial Excess  Parachute</FONT></FONT></P>


<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">7</FONT></FONT></P>


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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Payment  (such
different  amount being  hereafter  referred to as the  &quot;Determinative  Excess
Parachute  Payment&quot;) then the  Company's  independent  accountants shall determine
the amount (the &quot;Adjustment  Amount&quot;) Executive must pay to the  Company or the
Company  must pay to  Executive in order to put  Executive  (or the Company,  as the case
may be) in  the same  position  as  Executive  (or the  Company,  as the case may be)
would  have been if the  Initial  Excess  Parachute  Payment had been equal to the
Determinative  Excess  Parachute  Payment.  In determining the Adjustment  Amount,  the
independent  accountants  shall take into  account any and all taxes  (including  any
penalties  and  interest)  paid by or for Executive or refunded to Executive or for
Executive's  benefit.  As soon as  practicable  after the  Adjustment  Amount has been so
determined,  the Company shall pay the Adjustment  Amount to Executive or  Executive
shall repay the Adjustment  Amount to the Company,  as the case may be. The purpose of
this paragraph is  to assure that (i) Executive is not reimbursed more for the golden
parachute  excise tax than is necessary to make  him whole,  and (ii) if it is
subsequently  determined that additional  golden parachute excise tax is owed by him,
additional reimbursement payments will be made to him to make him whole for the
additional excise tax.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;In
each  calendar year that  Executive  receives  payments or benefits  under the
Association  Employment  Agreement and/or this Agreement and/or a Company or Association
sponsored  employee benefit plan,  Executive shall  report on his state and federal
income tax returns such  information as is consistent with the  determination  made  by
the independent  accountants of the Company as described  above.  The Company shall
indemnify and hold Executive  harmless from any and all losses,  costs and expenses
(including without limitation,  reasonable  attorney's fees,  interest,  fines and
penalties)  that  Executive  incurs as a result of so reporting  such  information.
Executive  shall promptly notify the Company in writing  whenever  Executive  receives
notice of the institution of a judicial  or  administrative  proceeding,  formal or
informal,  in which the federal tax treatment  under Section 4999 of the  Code of any
amount  paid or payable  under this  Section is being  reviewed or is in  dispute.  The
Company  shall  assume  control at its expense over all legal and  accounting  matters
pertaining  to such  federal tax  treatment  (except to the extent  necessary or
appropriate  for Executive to resolve any such  proceeding  with respect to any  matter
unrelated to amounts paid or payable  pursuant to this  Agreement).  Executive  shall
cooperate fully with  the Company in any such  proceeding.  Executive  shall not enter
into any  compromise  or  settlement  or otherwise  prejudice any rights the Company may
have in connection therewith without prior consent of the Company.</FONT></FONT></P>

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<A NAME="A049"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NON-COMPETITION</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;Upon
any termination of Executive's  employment  hereunder,  other than a termination,
(whether voluntary  or  involuntary)  in  connection  with a Change in Control,  as a
result of which the  Company is paying  Executive  benefits  under  Section 6 of this
Agreement,  Executive  agrees not to compete  with the  Association  and/or the  Company
for a period of one (1) year  following  such  termination  within  twenty-five  (25)
miles of any existing  branch of the  Association  or any  subsidiary  of the Company or
within  twenty-five  (25) miles of any office for  which the  Association,  the  Company
or a  Association  subsidiary  of the Company  has filed an  application  for  regulatory
approval to establish an office,  determined as of the effective  date of such
termination,  except as  agreed to  pursuant  to a  resolution  duly  adopted by the
Board.  Executive  agrees  that  during such period and  within said area, cities,  towns
and counties,  Executive shall not work for or advise,  consult or otherwise serve  with,
directly or indirectly,  any entity whose business materially competes with the
depository,  lending or other  business  activities of the  Association  and/or the
Company.  The parties  hereto,  recognizing  that  irreparable  injury will result to the
Association  and/or the Company,  its business and property in the event of  Executive's
breach of this  Subsection 12(a)  agree that in the event of any such breach by
Executive,  the Association  and/or  the Company  will be  entitled,  in addition to any
other  remedies  and damages  available,  to an  injunction  to  restrain the violation
hereof by Executive,  Executive's partners, agents, servants,  employers,  employees and
all  persons  acting  for  or  with  Executive.  Executive  represents  and  admits  that
Executive's  experience  and  capabilities  are such that  Executive  can obtain
employment  in a business  engaged in other  lines  and/or of a  different  nature  than
the  Association  and/or  the  Company,  and that the  enforcement  of a remedy  by way
of  injunction  will not prevent  Executive from earning a livelihood.  Nothing herein
will be construed as prohibiting  the  Association  and/or the Company from  pursuing any
other  remedies  available  to the  Association  and/or the  Company for such breach or
threatened breach, including the recovery of damages from Executive.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;Executive
recognizes  and  acknowledges  that the  knowledge  of the  business
activities  and plans for  business  activities  of the  Company and  affiliates
thereof,  as it may exist from time to time,  is a valuable,  special  and unique  asset
of the  business of the  Company.  Executive  will not,  during or after the term of his
employment,  disclose any knowledge of the past, present,  planned or considered business
activities of the Company  or  affiliates</FONT></FONT></P>
<BR>

<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">8</FONT></FONT></P>

<HR SIZE=5 COLOR=GRAY NOSHADE>


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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">thereof to any
person,  firm,  corporation,  or other  entity for any reason or purpose  whatsoever
(except for such  disclosure  as  may be required to be  provided to any federal  banking
agency with  jurisdiction  over  the Company or Executive).  Notwithstanding  the
foregoing,  Executive may disclose any  knowledge of banking,  financial  and/or
economic  principles,  concepts or ideas which  are not solely and  exclusively  derived
from the  business  plans  and  activities  of  the  Company,  and  Executive  may
disclose  any  information  regarding  the  Association or the Company which is otherwise
publicly  available.  In the event of a  breach or threatened  breach  by  Executive  of
the  provisions  of this  Section,  the  Company  will be entitled  to an  injunction
restraining  Executive  from  disclosing,  in whole or in part,  the  knowledge  of the
past,  present,  planned  or  considered  business  activities  of the Company or
affiliates  thereof,  or from  rendering any  services to any person,  firm,
corporation,  other entity to whom such  knowledge,  in  whole or in part, has been
disclosed or is threatened to be  disclosed.  Nothing  herein  will be  construed  as
prohibiting  the  Company  from  pursuing  any other  remedies  available to the Company
for such breach or threatened breach, including the recovery of  damages from Executive.</FONT></FONT></P>

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<A NAME="A050"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SOURCE
OF PAYMENTS; NO DUPLICATION OF PAYMENTS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;All
payments  provided in this  Agreement  shall be timely paid in cash or check from the
general funds of  the Company.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;
Notwithstanding  any  provision  herein to the  contrary,  to the extent that  payments
and  benefits,  as  provided by this Agreement,  are paid to or received by Executive
under the Association Employment Agreement,  such  compensation  payments and benefits
paid by the Association  will be subtracted from any amount due Executive under  this
Agreement.  Payments  pursuant to this Agreement and the Association  Employment
Agreement shall be allocated  in proportion  to the level of activity and the time
expended on such  activities by Executive as determined by the  Company and the
Association on a quarterly basis.</FONT></FONT></P>

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<A NAME="A051"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NO
EFFECT EMPLOYEE BENEFITS PLANS OR PROGRAMS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
termination of Executive&#146;s employment during the term of this Agreement or
thereafter, whether by the Company or by Executive, shall have no effect on the
vested rights of Executive under the Company&#146;s or the Association&#146;s
qualified or non-qualified retirement, pension, savings, thrift, profit-sharing
or stock bonus plans, group life, health (including hospitalization, medical and
major medical), dental, accident and long term disability insurance plans, or
other employee benefit plans or programs, or compensation plans or programs in
which Executive was a participant.</FONT></FONT></P>

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<A NAME="A052"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REQUIRED
REGULATORY PROVISIONS</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Notwithstanding anything
herein contained to the contrary, any payments to Executive by the Company,
whether pursuant to this Agreement or otherwise, are subject to and conditioned
upon their compliance with Section 18(k) of the Federal Deposit Insurance Act,
12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12
C.F.R. Part 359.</FONT></FONT></P>

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<A NAME="A053"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NO
ATTACHMENT</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;Except
as  required  by law,  no right to  receive  payments  under  this  Agreement
shall be  subject to  anticipation,  commutation,  alienation,  sale, assignment,
encumbrance,  charge, pledge, or hypothecation,  or to  execution,  attachment,  levy, or
similar process or assignment by operation of law, and any attempt,  voluntary or
involuntary, to affect any such action shall be null, void, and of no effect.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement  shall be binding upon,  and inure to the benefit of,  Executive and the
Association  and  their respective successors and assigns.</FONT></FONT></P>

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<A NAME="A054"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ENTIRE
AGREEMENT; MODIFICATION AND WAIVER</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;This
instrument contains the entire agreement of the parties relating to the subject matter hereof,
and supercedes in its entirety any and all prior agreements, understandings or
representations relating to the subject</FONT></FONT></P>
<BR>

<!-- MARKER FORMAT-SHEET="Para Center" -->
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">9</FONT></FONT></P>



<HR SIZE=5 COLOR=GRAY NOSHADE>


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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">matter  hereof  including  that  certain
Employment  Agreement  between the Company and  Executive  dated  October  16,  2002,
except that the parties  acknowledge that this Agreement shall not impact any  of the
rights and  obligations of the parties to the  Association  Employment  Agreement  or any
of the agreements or plans  referenced  in the Association  Employment  Agreement  except
as set forth in  Section 13(b)  hereof.  No modifications of this  Agreement shall  be
valid unless made in writing and signed by the parties hereto.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement may not be modified or amended  except by an  instrument in writing
signed by the parties  hereto.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;No
term or  condition  of this  Agreement  shall be  deemed to have been  waived,  nor
shall  there be any  estoppel  against the  enforcement of any provision of this
Agreement,  except by written  instrument of the party  charged  with  such  waiver  or
estoppel.  No such  written  waiver  shall be deemed a  continuing  waiver  unless
specifically  stated therein,  and each such waiver shall operate only as to the specific
term or condition  waived  and  shall  not  constitute  a waiver  of such term or
condition  for the  future  as to any act  other  than that  specifically waived.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A055"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEVERABILITY</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">If,
for any reason, any provision of this Agreement, or any part of any provision,
is held invalid, such invalidity shall not affect any other provision of this
Agreement or any part of such provision not held so invalid, and each such other
provision and part thereof shall to the full extent consistent with law continue
in full force and effect.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A056"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HEADINGS
FOR REFERENCE ONLY</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
headings of sections and paragraphs herein are included solely for convenience
of reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A057"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GOVERNING LAW</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">This
Agreement shall be governed by the laws of the State of New York but only to the
extent not superseded by federal law.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A058"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ARBITRATION</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators, one of whom shall be selected by the Company, one of whom shall be
selected by Executive and the third of whom shall be selected by the other two
arbitrators. The panel shall sit in a location within fifty (50) miles from the
location of the Company, in accordance with the rules of the Judicial Mediation
and Arbitration System (JAMS) then in effect. Judgment may be entered on the
arbitrators award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of his right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A059"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>22.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAYMENT
OF LEGAL FEES</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">All
reasonable legal fees paid or incurred by Executive pursuant to any dispute or
question of interpretation relating to this Agreement shall be paid or
reimbursed by the Company, provided that the dispute or interpretation has been
settled by Executive and the Company or resolved in Executive&#146;s favor.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A060"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>23.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INDEMNIFICATION</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">During the
term of this Agreement and for a period of six&nbsp;(6) years thereafter, the
Company shall provide Executive (including his heirs, executors and
administrators) with coverage under a standard directors and officers liability
insurance policy at its expense, and shall indemnify Executive (and his heirs,
executors and administrators) to the fullest extent permitted under Delaware law
against all expenses and liabilities reasonably incurred by him in</FONT></FONT></P>
<BR>

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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">10</FONT></FONT></P>



<HR SIZE=5 COLOR=GRAY NOSHADE>


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<BR>

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<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">connection
with or arising out of any action, suit or proceeding in which he may be  involved by
reason of his having been a director or officer of the Company  (whether or not he
continues to be a director or officer at the time of  incurring such expenses or
liabilities), such expenses and liabilities to  include, but not be limited to,
judgments, court costs and attorneys fees and  the cost of reasonable settlements (such
settlements must be approved by the  Board of Directors of the Company). If such action,
suit or proceeding is  brought against Executive in his capacity as an officer or
director of the  Company, however, such indemnification shall not extend to matters as to
which  Executive is finally adjudged to be liable for willful misconduct in the
performance of his duties.</FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Left Head Bold" -->
<A NAME="A061"></A>
<P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>24.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SUCCESSOR TO THE COMPANY</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">The
Company shall require any successor or assignee, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all the
business or assets of the Association or the Company, expressly and
unconditionally to assume and agree to perform the Company&#146;s obligations
under this Agreement, in the same manner and to the same extent that the Company
would be required to perform if no such succession or assignment had taken
place.</FONT></FONT></P>

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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">[Remainder of
Page Intentionally Blank]</FONT></FONT></P>
<BR>


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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">11</FONT></FONT></P>


<HR SIZE=5 COLOR=GRAY NOSHADE>

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<A NAME="A062"></A>
<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>SIGNATURES</B></FONT></FONT></P>

<!-- MARKER FORMAT-SHEET="Para" -->
<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and Executive has signed this Agreement, on the day and
date first above written.</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="600">
<TR VALIGN="BOTTOM">
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH>
     <TH COLSPAN="2"><FONT FACE="Times New Roman, Times, Serif" SIZE="1"></FONT></TH></TR>
<TR VALIGN="BOTTOM">
     <TD WIDTH="39%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>ATTEST:<BR>&nbsp;<BR>&nbsp;</B></FONT></FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="55%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>ATLANTIC LIBERTY FINANCIAL CORP.<BR>&nbsp;<BR>&nbsp;</B></FONT></FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">/s/ Michelle A. Rizzotto</FONT><HR WIDTH="80%" COLOR="#000000" NOSHADE>
</TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">By:/s/ Barry M. Donohue</FONT><HR WIDTH="80%" COLOR="#000000" NOSHADE></TD><TD ALIGN="LEFT">&nbsp;</TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Secretary</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Barry M. Donohue</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">President and Chief Executive Officer<BR>&nbsp;<BR>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>WITNESS:<BR>&nbsp;<BR>&nbsp;</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>EXECUTIVE:<BR>&nbsp;<BR>&nbsp;</B></FONT></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">/s/ JoAnn T. Simonelli</FONT><HR WIDTH="80%" COLOR="#000000" NOSHADE></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">By: /s/ William M.Gilfillan</FONT><HR WIDTH="80%" COLOR="#000000" NOSHADE></TD>
<TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">William M. Gilfillan</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Executive Vice President, Chief Financial Officer</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">and Corporate Secretary</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
</TABLE>
<BR>


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<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">12</FONT></FONT></P>



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