DIRECTORS RETIREMENT PLAN

     This Directors  Retirement Plan (the "Plan"),  effective as of the 20th day
of February,  1997,  formalizes the  understanding by and between PRESTIGE STATE
BANK  (the  "Bank"),   a  commercial  bank,  and  its  non-employee   directors,
hereinafter referred to as " Director(s)",  who shall be eligible to participate
in this Plan by  execution  of a Directors  Retirement  Plan  Joinder  Agreement
("Joinder  Agreement") in a form provided by the Bank.  PRESTIGE FINANCIAL CORP.
(the  "Holding  Company")  is a party  to this  Plan  for the  sole  purpose  of
guaranteeing the Bank's performance hereunder.

                                  WITNESSETH:

     WHEREAS, the Directors serve the Bank as members of the Board of Directors;
and

     WHEREAS,  the Bank desires to honor, reward and recognize the Directors who
have provided long and faithful  service to the Bank and to ensure the continued
service on the Board by such Directors until retirement age; and

     WHEREAS,  the Directors  wish to be assured that they will be entitled to a
certain amount of additional  compensation for some definite period of time from
and after  retirement from active service with the Bank or other  termination of
service and wish to provide  their  beneficiaries  with  benefits from and after
death; and

     WHEREAS,  the  Bank  and  the  Directors  wish to  provide  the  terms  and
conditions  upon which the Bank shall pay such  additional  compensation  to the
Directors after retirement or other termination of service and/or death benefits
to their beneficiaries after death; and


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     WHEREAS,  the Bank and the  Directors  intend this Plan to be considered an
unfunded  arrangement,  maintained primarily to provide supplemental  retirement
income for such Directors; and

     WHEREAS, the Bank has adopted this Directors Retirement Plan which controls
all issues relating to Retirement Benefits as described herein;

     NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the Bank and the Directors agree as follows:

                                    SECTION I

                                  DEFINITIONS

     When used herein,  the following  words and phrases shall have the meanings
below unless the context clearly indicates otherwise:

1.1  "Accrued  Benefit"  means that portion of the  Retirement  Benefit which is
     required to be expensed and accrued  under  generally  accepted  accounting
     principles  (GAAP) by any  appropriate  method  which the  Bank's  Board of
     Directors may require in the exercise of its sole discretion.

1.2  "Act" means the Employee Retirement Income Security Act of 1974, as amended
     from time to time.

1.3  "Bank" means PRESTIGE STATE BANK and any successor thereto.

1.4  "Beneficiary"  means the person or persons (and their heirs)  designated as
     Beneficiary  in the  Director's  Joinder  Agreement  to whom  the  deceased
     Director's benefits are payable.  If no Beneficiary is so designated,  then
     the Director's Spouse, if living, will be deemed the

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Beneficiary.  If the Director's  Spouse is not living,  then the Children of the
Director will be deemed the  Beneficiaries and will take on a per stirpes basis.
If there are no living Children,  then the Estate of the Director will be deemed
the Beneficiary.

1.5  "Benefit Age" shall be the birthday on which the Director  becomes eligible
     to receive the Level 2 Retirement  Benefit  under the Plan.  Such  birthday
     shall be designated in the Director's Joinder Agreement.

1.6  "Benefit  Eligibility  Date"  shall  be the  date on  which a  Director  is
     entitled  to  receive  either  his Level 1  Retirement  Benefit  or Level 2
     Retirement  Benefit. A Director's  "Initial Benefit Eligibility Date" shall
     occur on the 1st day of the month following the month in which the Director
     has  completed  ten (10) Years of  Service  with the Bank.  A Director  who
     reaches his Initial Benefit  Eligibility  Date shall be eligible to receive
     his level 1 Retirement  Benefit. A Director's "Level 2 Benefit  Eligibility
     Date"  shall be the 1st day of the month  following  the month in which the
     Director  attains the Benefit Age  designated in his Joinder  Agreement.  A
     Director  who  attains  his  Benefit  Age shall be  entitled to the Level 2
     Retirement Benefit.

1.7  "Cause" means personal dishonesty, willful misconduct, willful malfeasance,
     breach of fiduciary duty involving personal profit,  intentional failure to
     perform  stated  duties,  willful  violation of any law,  rule,  regulation
     (other   than   traffic   violations   or  similar   offenses),   or  final
     cease-and-desist  order,  material breach of any provision of this Plan, or
     gross negligence in matters of material importance to the Bank.

1.8  "Change in Control" of the Bank or the Holding Company shall mean:

     (1)  a Change in Control of a nature  that would be required to be reported
          in  response  to Item l(a) of the  current  report on Form 8-K,  as in
          effect on the date hereof,

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          pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
          (the "Exchange Act"); or

     (2)  a Change in Control shall occur at such time as

          (i)  any "person" (as the term is used in Sections  13(d) and 14(d) of
               the  Exchange  Act)  who is not now  presently  but  becomes  the
               "beneficial  owner" (as defined in Rule 13d-3 under the  Exchange
               Act),  directly  or  indirectly,  of  securities  of the  Holding
               Company  representing Thirty Percent (30%) or more of the Holding
               Company's  outstanding   securities  except  for  any  securities
               purchased  by any  tax-qualified  employee  benefit  plan  of the
               Holding Company or the Bank; or

          (ii) individuals   who  constitute  the  Board  of  Directors  on  the
               effective  date  hereof  (the  "Incumbent  Board")  cease for any
               reason to 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 Holding Company's shareholders was
               approved by the Holding Company's  Incumbent Board, shall be, for
               purposes  of this  clause  (ii),  considered  as though he were a
               member of the Incumbent Board; or

          (iii)a plan of reorganization,  merger, consolidation,  or sale of all
               or  substantially  all of the  assets of the Bank or the  Holding
               Company  occurs in which the Bank or the  Holding  Company is not
               the resulting entity; or

          (iv) a  proxy  statement  is  issued   soliciting   proxies  from  the
               stockholders  of the  Holding  Company by someone  other than the
               current  management of the Holding Company,  seeking  stockholder
               approval of a plan of reorganization, merger, or consolidation of
               the  Holding  Company  or  similar  transaction  with one or more
               corporations as a result of which the  outstanding  shares of the
               class of the Holding Company's securities then

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               subject to the plan or transaction are exchanged for or converted
               into cash or  property  or  securities  not issued by the Holding
               Company; or

          (v)  a tender  offer is made for Thirty  Percent  (30%) or more of the
               voting securities of the Company.

1.9  "Children"  means the  Director's  children,  or the issue of any  deceased
     Children,  then living at the time payments are due the Children under this
     Plan. The term "Children" shall include both natural and adopted Children.

1.10 "Disability  Benefit"  means the monthly  benefit  payable to the  Director
     following a determination, in accordance with Subsection 3.6, that he is no
     longer  able,  properly  and  satisfactorily,  to  perform  his  duties  as
     Director.

1.11 "Effective Date" of this Plan shall be February 20, 1997.

1.12 "Estate" means the estate of the Director.

1.13 "Holding Company" means Prestige Financial Corporation.

1.14 "Interest Factor" means monthly compounding or discounting,  as applicable,
     at six (6%) percent per annum.

1.15 "Payout Period" means the time frame during which certain  benefits payable
     hereunder shall be distributed.  The Payout Period may differ  depending on
     whether the Director is entitled to Level 1 Retirement  Benefits or Level 2
     Retirement  Benefits.  The Payout  Period for Level 1  Retirement  Benefits
     ("Level  1 Payout  Period")  shall be, at the  election  of the  Directors,
     either (i) One Hundred Twenty (120) consecutive  months or (ii) One Hundred
     Eighty (180)  consecutive  months,  with payments  under the Level 1 Payout
     Period being made in equal monthly  installments  commencing  within thirty
     (30) days following the

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occurrence of the event which triggers distribution. Payments under the "Level 2
Payout  Period" shall be made in equal monthly  installments  commencing  within
thirty  (30)  days   following  the  occurrence  of  the  event  which  triggers
distribution  and  continuing  for the longer of (i) One  Hundred  Eighty  (180)
consecutive months; or (ii) the Director's lifetime;  provided,  however, in the
event of  termination  following a Change in Control,  the Level 2 Payout Period
shall be One  Hundred  Eighty  (180)  consecutive  months.  For  purposes of the
Survivor's  Benefit  payable  hereunder,  the Payout Period shall be One Hundred
Eighty (180) consecutive months.

1.16 "Plan Year" shall mean the calendar year.  However,  "Plan Year" shall mean
     February 20, 1997 through December 3l, 1997 for the first Plan Year.

1.17 "Spouse"  means the  individual to whom the Director is legally  married at
     the time of the Director's death,

1.18 "Retirement  Benefit"  means  an  annual  amount  payable  to the  Director
     pursuant to the Plan.  Depending on a Director's age and length of service,
     a Director may be eligible  for either a "Level 1 Retirement  Benefit" or a
     "Level 2 Retirement  Benefit."  The Level 1 Retirement  Benefit and Level 2
     Retirement  Benefit  to which a  Director  will  become  entitled  upon the
     satisfaction  of  the  applicable  conditions  shall  be set  forth  on the
     Director's Joinder Agreement.

1.19 "Survivor's  Benefit" means an annual amount payable to the  Beneficiary in
     monthly  installments  throughout the Payout  Period,  equal to the Level 2
     Retirement Benefit and subject to Subsection 3.2.

1.20 "Year of  Service"  shall be earned upon  completing  twelve (12) months of
     continuous service (including  authorized leaves of absence) with the Bank.
     However,  one "Year of Service"  shall be earned upon  completing  ten (10)
     months of continuous  service during the first Plan Year.  Years of Service
     shall be  computed  from the first day of service  of a  Director  with the
     Bank.

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                                   SECTION II

                          ESTABLISHMENT OF RABBI TRUST

     The Bank  intends to establish a rabbi trust into which the Bank intends to
contribute  assets  which  shall be held  therein,  subject to the claims of the
Bank's creditors in the event of the Bank's  "Insolvency" as defined in the plan
which establishes such rabbi trust, until the contributed assets are paid to the
Directors and their  Beneficiaries in such manner and at such times as specified
in this Plan. It is the intention of the Bank to make contributions to the rabbi
trust to  provide  the Bank with a source of funds to assist it in  meeting  the
liabilities  of this Plan.  The rabbi  trust and any assets held  therein  shall
conform to the terms of the rabbi trust agreement which has been  established in
conjunction  with this Plan. To the extent the language in this Plan is modified
by the language in the rabbi trust  agreement,  the rabbi trust  agreement shall
supersede this Plan. Any  contributions  to the rabbi trust shall be made during
each Plan Year in accordance with the rabbi trust agreement.  The amount of such
contribution(s)  shall be equal to the full present value of all accruals  under
the  Plan,  if any,  less:  (i)  previous  contributions  made on  behalf of the
Director to the rabbi  trust,  and (ii)  earnings  to date on all such  previous
contributions.

                                   SECTION III

                                    BENEFITS

3.1  Retirement Benefit.

     (a)  If the Director  remains in the service of the Bank until reaching his
          Initial  Benefit  Eligibility  Date, the Director shall be entitled to
          the  Level  1  Retirement  Benefit.  If  the  Director  retires  after
          attainment  of  his  Initial  Benefit   Eligibility  Date  but  before
          attainment  of his Benefit Age, the Director  shall be entitled to the
          annuitized  value (using the Interest  Factor) of his Accrued  Benefit
          (which shall be at least as great as his Level 1  Retirement  Benefit,
          and for these purposes,  shall be his Retirement Benefit),  calculated
          as of the date of his termination of service.  Such Retirement Benefit
          shall  commence on the 1st day of the month  following the  Director's
          actual retirement or other termination of service on the Board,  other
          than

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          a termination  of service due to the  Director's  death,  and shall be
          payable in monthly installments  throughout the Level 1 Payout Period.
          In the  event  a  Director  dies  after  commencement  of the  Level 1
          Retirement Benefit payments but before completion of all such payments
          due  and  owing  hereunder,  the  Bank  shall  pay to  the  Director's
          Beneficiary  a  continuation  of  the  monthly  installments  for  the
          remainder of the Level 1 Payout Period.

     (b)  If the Director is in service with the Bank until reaching his Benefit
          Age, the Director shall be entitled to the Level 2 Retirement Benefit.
          Such benefit shall commence on the 1st day of the month  following the
          Director's  actual  retirement or other  termination of service on the
          Board and shall be  payable  in monthly  installments  throughout  the
          Level 2 Payout  Period.  In the  event the  Director  dies at any time
          after  attaining his Benefit Age, but prior to completion of all Level
          2 Retirement Benefit payments due and owing hereunder,  the Bank shall
          pay  to the  Director's  Beneficiary  a  continuation  of the  monthly
          installments for the remainder of the Level 2 Payout Period.

3.2  Death Prior to Benefit  Age. If the Director  dies prior to  attaining  his
     Benefit Age but while  employed  at the Bank,  the  Director's  Beneficiary
     shall be entitled to the Survivor's  Benefit.  The Survivor's Benefit shall
     commence  within  thirty  (30)  days of the  Director's  death and shall be
     payable in monthly installments throughout the Payout Period.

3.3  Voluntary or Involuntary Termination Other Than for Cause.

     (a)  If  the   Director's   service  with  the  Bank  is   voluntarily   or
          involuntarily  terminated  prior  to the  attainment  of  his  Initial
          Benefit  Eligibility  Date,  for any reason other than for Cause,  the
          Director's  death,  disability,  or  following a Change in Control (as
          defined),  the Director (or his Beneficiary)  shall be entitled to the
          annuitized  value (using the Interest  Factor) of his Accrued  Benefit
          calculated as of the date of his termination of service.  Such benefit
          shall commence on the Director's Initial

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          Benefit  Eligibility  Date (determined as if the Director had remained
          in the  continuous  service  of the Bank from the date of his  initial
          service  hereunder  until the  completion of ten Years of Service) and
          shall be payable in monthly installments throughout the Level 1 Payout
          Period. In the event the Director dies at any time after attaining his
          Initial Benefit  Eligibility Date, but prior to completion of all such
          payments due an owing hereunder,  the Bank shall pay to the Director's
          Beneficiary  a  continuation  of  the  monthly  installments  for  the
          remainder of the Level 1 Payout Period.

     (b)  If  the   Director's   service  with  the  Bank  is   voluntarily   or
          involuntarily  terminated after  attainment of the Director's  Initial
          Benefit  Eligibility Date but prior to his Benefit Age, for any reason
          other than for Cause, the Director's death, disability, or following a
          Change in Control, the Director (or his Beneficiary) shall be entitled
          to the  annuitized  value (using the  Interest  Factor) of his Accrued
          Benefit  (which  shall be at least as great as his Level 1  Retirement
          Benefit),  calculated  as of the date of his  termination  of service.
          Such benefit shall commence on the 1st day of the month  following the
          month in which occurs the Director's  termination of service and shall
          be  payable  in  monthly  installments  throughout  the Level 1 Payout
          Period. In the event the Director dies at any time after  commencement
          of such  payments but prior to completion of all such payments due and
          owing  hereunder,  the Bank shall pay to the Director's  Beneficiary a
          continuation  of the monthly  installments  for the  remainder  of the
          Level 1 Payout Period.

     (c)  If the Director dies after his voluntary or involuntary termination of
          service  occurring prior to his Initial Benefit  Eligibility Date, and
          prior  to the  commencement  of  benefits  hereunder,  the  Director's
          Beneficiary  shall be  entitled  to the  annuitized  value  (using the
          Interest Factor) of his Accrued  Benefit.  The payment of such benefit
          shall commence within thirty (30) days of the Director's

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          death. The benefit shall be payable in monthly  installments  over the
          Level 1 Payout Period.

     (d)  If the Director dies after his voluntary or involuntary termination of
          service occurring after his Initial Benefit Eligibility Date but prior
          to his Benefit Age, and prior to commencement  of benefits  hereunder,
          the Director's  beneficiary  shall be entitled to the annuitized value
          (using the Interest  Factor) of his Accrued Benefit (which shall be at
          least as great as his Level 1 Retirement Benefit). The payment of such
          benefit  shall  commence  within  thirty  (30) days of the  Director's
          death. The benefits shall be payable in monthly  installments over the
          Level 1 Payout Period.

3.4  Termination of Service Related to a Change in Control.

     (a)  If a  Change  in  Control  occurs  at the  Bank,  and  thereafter  the
          Director's    service   is   terminated    (either    voluntarily   or
          involuntarily),  the  Director  shall  be  entitled  to  his  Level  2
          Retirement  Benefit (as if he had  remained in the service of the Bank
          until his Benefit Age).  Such benefit shall commence on the 1st day of
          the month following his termination of service and shall be payable in
          monthly  installments  throughout  the Level 2 Payout  Period.  In the
          event that the  Director  dies at any time after  commencement  of the
          payments,  but prior to  completion of all such payments due and owing
          hereunder,  the Bank, or its  successor,  shall pay to the  Director's
          Beneficiary  a  continuation  of  the  monthly  installments  for  the
          remainder of the Level 2 Payout Period.

     (b)  If, after such termination, the Director dies prior to commencement of
          the benefits hereunder,  the Director's  Beneficiary shall be entitled
          to the Survivor's Benefit which shall commence within thirty (30) days
          of the Director's  death.  The Survivor's  Benefit shall be payable in
          monthly installments over the Level 2 Payout Period.

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3.5  Termination  for Cause.  If the  Director  is  terminated  for  Cause,  all
     benefits under this Plan shall be forfeited and this Plan shall become null
     and void as to the Director.

3.6  Disability Benefit.

     (a)  Notwithstanding  any  other  provision  hereof,  if  requested  by the
          Director and approved by the Board of Directors,  the Director who has
          not attained his Initial Benefit Eligibility Date shall be entitled to
          receive the Disability Benefit  hereunder,  in any case in which it is
          determined by a duly licensed physician selected by the Bank, that the
          Director is no longer able,  properly and  satisfactorily,  to perform
          his  regular  duties as a Director,  because of ill health,  accident,
          disability or general inability due to age. If the Director's  service
          is  terminated  pursuant  to this  paragraph  and  Board  of  Director
          approval is obtained,  the Director may elect to begin  receiving  the
          Disability Benefit in lieu of any benefit available under Section 3.3,
          which  is not  available  prior  to  the  Director's  Initial  Benefit
          Eligibility  Date. The  Disability  Benefit shall equal the Director's
          Accrued Benefit, annuitized (using the Interest Factor) over the Level
          1 Payout Period.  The  Disability  Benefit shall be payable in monthly
          installments  over the Level 1 Payout Period  commencing within thirty
          (30) days  following the later of (i) the above  mentioned  disability
          determination  and (ii) the approval of the Disability  Benefit by the
          Board of  Directors.  In the event the Director  dies while  receiving
          payments  pursuant to this Subsection,  but prior to the completion of
          all  payments  due and  owing  hereunder,  the Bank  shall  pay to the
          Director's  Beneficiary a continuation of the monthly installments for
          the remainder of the Payout Period.

     (b)  If the Director dies after approval of the  Disability  Benefit by the
          Board of Directors but before the  commencement of such payments,  the
          Director's  Beneficiary  shall be entitled to the  Director's  Accrued
          Benefit annuitized (using the Interest Factor) over the Level 1 Payout
          Period. Such benefit shall be payable to

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          the Beneficiary in monthly installments over the Level 1 Payout Period
          commencing within thirty (30) days of the Director's death.

3.7  Non-Competition During and After Service on the Board.

     (a)  In consideration of the agreements of the Bank contained herein and of
          the  payments to be made by the Bank  pursuant  hereto,  the  Director
          hereby  agrees that, so long as he remains in the service of the Bank,
          he will not actively  engage,  either  directly or indirectly,  in any
          business or other  activity which is or may be deemed to be in any way
          competitive  with or adverse to the best  interests of the business of
          the Bank unless the Directors participation therein has been consented
          to, in writing, by the Board of Directors.

     (b)  The Director expressly agrees that, as consideration for the covenants
          of the Bank contained  herein and as a condition to the performance by
          the Bank of its obligations hereunder, from and after any voluntary or
          involuntary  termination  of  service,  other  than a  termination  of
          service  pursuant to Subsection  3.4, and  continuing  throughout  the
          entire Payout Period,  as provided  herein,  he will not,  without the
          prior  written  consent of the Bank,  become  associated  with, in the
          capacity of an employee,  director, officer, principal, agent, trustee
          or in any other capacity  whatsoever,  any enterprise conducted in the
          trading area of the business of the Bank which  enterprise  is, or may
          be deemed to be,  competitive with any business carried on by the Bank
          as of the date of the  termination  of the  Director's  service or his
          retirement.

     (c)  In the event of a termination of the Director's  service  related to a
          Change in Control  pursuant to Subsection  3.4,  paragraph (b) of this
          Subsection 3.7 shall cease to be a condition to the performance by the
          Bank of its obligations under this Plan.

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3.8  Breach.  In the event of any breach by the Director of the  agreements  and
     covenants contained herein, the Board of Directors of the Bank shall direct
     that any unpaid  balance of any payments to the Director under this Plan be
     suspended, and shall thereupon notify the Director of such suspensions,  in
     writing.  Thereupon,  if the Board of Directors of the Bank shall determine
     that said  breach by the  Director  has  continued  for a period of one (1)
     month following notification of such suspension, all rights of the Director
     and his Beneficiaries under this Plan, including rights to further payments
     hereunder, shall thereupon terminate.

3.9      Additional  Death  Benefit  -  Burial  Expense.   In  addition  to  the
         above-described   death  benefits,   upon  the  Director's  death,  the
         Director's Beneficiary shall be entitled to receive a one-time lump sum
         death benefit in the amount of Ten Thousand  ($10,000.00) Dollars. This
         benefit  shall be provided  specifically  for the purpose of  providing
         payment for burial and/or funeral expenses of the Director.  Such death
         benefit  shall be payable  within  thirty  (30) days of the  Director's
         death. The Director's Beneficiary shall not be entitled to such benefit
         if the Director is terminated for Cause prior to death.

                                   SECTION IV

                            BENEFICIARY DESIGNATION

     The Director  shall make an initial  designation  of primary and  secondary
Beneficiaries  upon execution of his Joinder  Agreement and shall have the right
to change  such  designation,  at any  subsequent  time,  by  submitting  to the
Administrator  in  substantially  the form  attached as Exhibit A to the Joinder
Agreement,  a written  designation of primary and secondary  Beneficiaries.  Any
Beneficiary  designation  made subsequent to execution of the Joinder  Agreement
shall become  effective only when receipt  thereof is acknowledged in writing by
the Administrator.

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                                    SECTION V

                           DIRECTOR'S RIGHT TO ASSETS

     The rights of the Director,  any Beneficiary,  or any other person claiming
through the  Director  under this Plan,  shall be solely  those of an  unsecured
general creditor of the Bank. The Director, the Beneficiary, or any other person
claiming  through the  Director,  shall only have the right to receive  from the
Bank those payments so specified  under this Plan. The Director  agrees that he,
his  Beneficiary,  or any other person claiming through him shall have no rights
or  interests  whatsoever  in any asset of the  Bank,  including  any  insurance
policies or contracts  which the Bank may possess or obtain to  informally  fund
this  Plan.  Any  asset  used or  acquired  by the Bank in  connection  with the
liabilities it has assumed under this Plan,  unless  expressly  provided herein,
shall not be deemed to be held under any trust for the  benefit of the  Director
or his  Beneficiaries,  nor  shall  any  asset be  considered  security  for the
performance of the  obligations of the Bank. Any such asset shall be and remain,
a general, unpledged, and unrestricted asset of the Bank.

                                   SECTION VI

                            RESTRICTIONS UPON FUNDING

     The Bank shall have no obligation to set aside, earmark or entrust any fund
or money with which to pay its  obligations  under this Plan. The Director,  his
Beneficiaries  or any  successor in interest to him shall be and remain simply a
general unsecured  creditor of the Bank in the same manner as any other creditor
having a general  claim for matured and unpaid  compensation.  The Bank reserves
the absolute right in its sole  discretion to either purchase assets to meet its
obligations undertaken by this Plan or to refrain from the same and to determine
the extent,  nature, and method of such asset purchases.  Should the Bank decide
to purchase assets such as life insurance,  mutual funds, disability policies or
annuities,  the Bank reserves the absolute  right,  in its sole  discretion,  to
terminate  such  assets at any time,  in whole or in part.  At no time shall the
Director  be deemed  to have any lien,  right,  title or  interest  in or to any
specific  investment  or to any assets of the Bank. If the Bank elects to invest
in a life insurance, disability or annuity policy

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upon the life of the Director, then the Director shall assist the Bank by freely
submitting  to  a  physical   examination   and  by  supplying  such  additional
information necessary to obtain such insurance or annuities.

                                   SECTION VII

                    ALIENABILITY AND ASSIGNMENT PROHIBITION

     Neither the  Director  nor any  Beneficiary  under this Plan shall have any
power or right to transfer, assign, anticipate,  hypothecate, mortgage, commute,
modify or otherwise  encumber in advance any of the benefits payable  hereunder,
nor shall any of said  benefits  be subject to  seizure  for the  payment of any
debts,  judgments,  alimony or separate  maintenance owed by the Director or his
Beneficiary, nor be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise.  In the event the Director or any Beneficiary  attempts
assignment,  communication,  hypothecation, transfer or disposal of the benefits
hereunder, the Bank's liabilities shall forthwith cease and terminate.

                                  SECTION VIII

                                 ACT PROVISIONS

8.1  Named  Fiduciary and  Administrator.  The Bank shall be the Named Fiduciary
     and Administrator (the "Administrator") of this Plan. As Administrator, the
     Bank shall be responsible for the management, control and administration of
     the Plan as established  herein.  The  Administrator may delegate to others
     certain aspects of the management and operational  responsibilities  of the
     Plan,   including  the   employment  of  advisors  and  the  delegation  of
     ministerial duties to qualified individuals.

8.2  Claims  Procedure and  Arbitration.  In the event that benefits  under this
     Plan are not paid to the Director (or to his Beneficiary in the case of the
     Director's death) and such claimants feel they are entitled to receive such
     benefits, then a written claim must be made to the

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Administrator  within sixty (60) days from the date  payments  are refused.  The
Bank and its Board of Directors shall review the written claim and, if the claim
is denied,  in whole or in part,  they shall  provide in writing,  within ninety
(90) days of receipt of such claim,  their  specific  reasons  for such  denial,
reference to the provisions of this Plan or the Joinder Agreement upon which the
denial is based, and any additional material or information necessary to perfect
the claim.  Such  writing by the Bank and its Board of Directors  shall  further
indicate  the  additional  steps which must be  undertaken  by  claimants  if an
additional review of the claim denial is desired.

If claimants  desire a second  review,  they shall notify the  Administrator  in
writing  within sixty (60) days of the first claim denial.  Claimants may review
this Plan, the Joinder  Agreement or any documents  relating  thereto and submit
any issues and  comments,  in writing,  they may feel  appropriate.  In its sole
discretion,  the Administrator  shall then review the second claim and provide a
written decision within sixty (60) days of receipt of such claim.  This decision
shall state the specific reasons for the decision and shall include reference to
specific  provisions  of this  Plan or the  Joinder  Agreement  upon  which  the
decision is based.

If  claimants  continue  to dispute  the  benefit  denial  based upon  completed
performance of this Plan and the Joinder  Agreement or the meaning and effect of
the terms and  conditions  thereof,  then  claimants  may submit the  dispute to
mediation,  administered by the American  Arbitration  Association ("AAA") (or a
mediator  selected  by the  parties)  in  accordance  with the AAA's  Commercial
Mediation  Rules.  If mediation is not  successful in resolving the dispute,  it
shall be settled by  arbitration  administered  by the AAA under its  Commercial
Arbitration  Rules, and judgment on the award rendered by the  arbitrator(s) may
be entered in any court having jurisdiction thereof.

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                                   SECTION IX

                                  MISCELLANEOUS

9.1  No Effect on Director's  Rights.  Nothing contained herein will confer upon
     the  Director the right to be retained in the service of the Bank nor limit
     the  right of the Bank to deal  with the  Director  without  regard  to the
     existence of the Plan.

9.2  State Law. The Plan is established  under, and will be construed  according
     to, the laws of the State of New  Jersey,  to the extent  such laws are not
     preempted by the Act and valid regulations published thereunder.

9.3  Severability.  In the  event  that any of the  provisions  of this  Plan or
     portion  thereof,  are held to be  inoperative  or  invalid by any court of
     competent jurisdiction,  then: (1) insofar as is reasonable, effect will be
     given  to  the  intent   manifested  in  the  provisions  held  invalid  or
     inoperative,  and (2) the  validity  and  enforceability  of the  remaining
     provisions will not be affected thereby.

9.4  Incapacity of Recipient.  In the event the Director is declared incompetent
     and a  conservator  or other  person  legally  charged with the care of his
     person or Estate is  appointed,  any benefits  under the Plan to which such
     Director  is entitled  shall be paid to such  conservator  or other  person
     legally charged with the care of his person or Estate.

9.5  Unclaimed Benefit. The Director shall keep the Bank informed of his current
     address and the current address of his Beneficiaries. The Bank shall not be
     obligated to search for the  whereabouts of any person.  If the location of
     the  Director  is not made  known to the Bank as of the date upon which any
     payment of any benefits may first be made,  the Bank shall delay payment of
     the  Director's  benefit  payment(s)  until the location of the Director is
     made known to the Bank;  however,  the Bank shall only be obligated to hold
     such benefit payment(s) for the Director until the expiration of thirty-six
     (36) months. Upon expiration 

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     of the thirty-six (36) month period,  the Bank may discharge its obligation
     by payment to the Director's Beneficiary. If the location of the Director's
     Beneficiary  is not made known to the Bank by the end of an additional  two
     (2) month period following  expiration of the thirty-six (36) month period,
     the Bank may discharge its obligation by payment to the Director's  Estate.
     If there is no Estate in  existence  at such time or if such fact cannot be
     determined  by the  Bank,  the  Director  and  his  Beneficiary(ies)  shall
     thereupon  forfeit  any  rights to the  balance,  if any,  of any  benefits
     provided for such Director and/or Beneficiary under this Plan.

9.6  Limitations on Liability.  Notwithstanding any of the preceding  provisions
     of the Plan, no  individual  acting as an employee or agent of the Bank, or
     as a member of the Board of  Directors  shall be  personally  liable to the
     Director  or any other  person for any claim,  loss,  liability  or expense
     incurred in connection with the Plan.

9.7  Gender.  Whenever  in this Plan words are used in the  masculine  or neuter
     gender,  they shall be read and construed as in the masculine,  feminine or
     neuter gender, whenever they should so apply.

9.8  Effect on Other  Corporate  Benefit Plans.  Nothing  contained in this Plan
     shall affect the right of the Director to  participate  in or be covered by
     any other corporate benefit available to Directors of the Bank constituting
     a part of the Bank's existing or future compensation structure.

9.9  Suicide.  Notwithstanding  anything  to the  contrary  in  this  Plan,  the
     benefits otherwise provided herein shall not be payable and this Plan shall
     become null and void with respect to the Director if the  Director's  death
     results from  suicide,  whether  sane or insane,  within  twenty-four  (24)
     months after the execution of his Joinder Agreement.

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9.10 Inurement.  This Plan shall be binding  upon and shall inure to the benefit
     of the Bank, its successors and assigns, and the Director,  his successors,
     heirs, executors, a administrators, and Beneficiaries.

9.11 Headings. Headings and sub-headings in this Plan are inserted for reference
     and convenience only and shall not be deemed a part of this Plan.

                                    SECTION X

                              AMENDMENT/REVOCATION

     This Plan shall not be amended,  modified or revoked at any time,  in whole
or part, as to any Director,  without the mutual written consent of the Director
and the Bank,  and such mutual consent shall be required even if the Director is
no longer employed by the Bank.

                                   SECTION XI

                                   EXECUTION

11.1 This Plan sets forth the entire  understanding  of the parties  hereto with
     respect  to  the  transactions   contemplated   hereby,  and  any  previous
     agreements  or  understandings  between the parties  hereto  regarding  the
     subject matter hereof are merged into and superseded by this Plan.

11.2 This Plan shall be  executed  in  triplicate,  each copy of which,  when so
     executed and  delivered,  shall be an original,  but all three copies shall
     together constitute one and the same instrument.

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