PENN FEDERAL SAVINGS BANK
                   SUPPLEMENTAL EXECUTIVE LIFE INSURANCE PLAN



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                            PENN FEDERAL SAVINGS BANK
                   SUPPLEMENTAL EXECUTIVE LIFE INSURANCE PLAN

                             EFFECTIVE MARCH 1, 2003

                                     Purpose
                                     -------

     The purpose of the Plan is to provide  supplemental life insurance benefits
to a select  group of  employees  who  contribute  materially  to the  continued
growth, development and future business success of Penn Federal Savings Bank and
its Affiliates.

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

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

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

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

     "Beneficiary Designation Form" shall mean the form established from time to
      -----------------------------
     time by the Committee  that a Participant  completes,  signs and returns to
     the Committee to designate one or more Beneficiaries.

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

     "Claimant" shall have the meaning set forth in Section 9.1.
      --------
     "Code" shall mean the Internal Revenue Code 1986, as it may be amended from
     -----
      time to time.

     "Committee" shall mean the committee described in Article 8.
      ---------
     "Company" shall mean Penn Federal Savings Bank.
     ---------

     "Compensation"  shall mean the annual salary relating to services performed
      -------------
     by a  Participant  for the Company and its  Affiliates  during the calendar
     year  preceding  the calendar year in which the  Participant  experiences a
     Termination  of Employment  (whether or not paid or included on the Federal
     Income Tax Form W-2 for such calendar year),  excluding bonuses of any type
     or nature, fringe benefits,  stock options, other stock based compensation,
     relocation   expenses,   non-monetary  awards,  and  automobile  and  other
     allowances paid to a Participant for employment  services rendered (whether
     or not such  allowances  are included in the  Participant's  gross income).
     Compensation   shall  be  calculated   before  reduction  for  compensation
     voluntarily  deferred or  contributed  by the  Participant  pursuant to all
     qualified or non-qualified plans of the Company and its Affiliates



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     and shall be  calculated to include  amounts not otherwise  included in the
     Participant's gross income;  provided,  however, that all such amounts will
     be included in compensation only to the extent that, had there been no such
     plan, the amount would have been payable in cash to the Participant.

     "Employee"  shall mean a person who is  classified  as an  employee  of the
      --------
     Company or its  Affiliates  and holds the position of Senior Vice President
     or higher as of the date of his Termination of Employment.

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

     "Holding   Company   shall   mean   PennFed   Financial   Services,    Inc.
      -----------------

     "Life  Insurance  Benefit"  shall  be an  amount  equal  to one  times  the
      ------------------------
     Participant's Compensation.

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

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

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

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

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

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

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


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

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

2.2  Enrollment  Requirements.  As a condition to  participation,  each selected
     ------------------------
     Employee shall complete, execute and return to the Committee such documents
     and information as the Committee requires.  In addition,  the Committee may
     prescribe such other  enrollment  requirements as it determines in its sole
     discretion are necessary or appropriate.

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


                                    ARTICLE 3
                             Life Insurance Benefit
                             ----------------------

     Subject  to,  and  limited  by,  all of the  provisions  of  this  Plan,  a
Participant's  Beneficiary  shall,  upon the death of the Participant  after the
Participant has experienced a Qualified  Termination of Employment,  receive the
Participant's Life Insurance Benefit (reduced by any required tax withholdings).
The Life Insurance Benefit shall be paid to the Participant's Beneficiary within
120 days following the date of the Participant's death.


                                    ARTICLE 4
                                     Funding
                                     -------

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

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

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


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

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

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

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

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

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


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

6.1  Beneficiary.  Each  Participant  shall  have the  right,  at any  time,  to
     -----------
     designate  his  Beneficiary(ies)  (both primary as well as  contingent)  to
     receive  any  benefits  payable  under  the  Plan  upon  the  death  of the

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     Participant.  The Beneficiary  designated under the Plan may be the same as
     or different from the  Beneficiary  designated  under any other plan of the
     Company or its Affiliates in which the Participant participates.

6.2  Beneficiary  Designation:  Change;  Spousal  Consent.  A Participant  shall
     -----------------------------------------------------
     designate  his  Beneficiary  by  completing  and  signing  the  Beneficiary
     Designation  Form and returning it to the  Committee.  A Participant  shall
     have the right to change a Beneficiary by completing, signing and otherwise
     complying  with  the  terms  of the  Beneficiary  Designation  Form and the
     Committee's  rules and  procedures,  as in effect from time to time. If the
     Participant names someone other than his spouse as a Beneficiary, a spousal
     consent,  in the form  designated by the Committee,  must be signed by that
     Participant's spouse and returned to the Committee.  Upon the acceptance by
     the  Committee  of a new  Beneficiary  Designation  Form,  all  Beneficiary
     designations  previously  filed shall be canceled.  The Committee  shall be
     entitled  to rely on the last  Beneficiary  Designation  Form  filed by the
     Participant and accepted by the Committee prior to his death.

6.3  Acknowledgment.  No  designation  or change in designation of a Beneficiary
     --------------
     shall be  effective  until  received  and  acknowledged  in  writing by the
     Committee.

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

6.5  Doubt as to  Beneficiary.  If the  Committee has any doubt as to the proper
     ------------------------
     Beneficiary to receive  payments  pursuant to the Plan, the Committee shall
     have the right, exercisable in its discretion, to cause the Company and its
     Affiliates to withhold  such payments  until this matter is resolved to the
     Committee's satisfaction.

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


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

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

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


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

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

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

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

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

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


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

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

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

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


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

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

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

          (iii)a description of any additional material or information necessary
               for the Claimant to perfect the claim, and an explanation of why
               such material or information is necessary; and

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

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

     (a)  may review pertinent documents;

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

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

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

     (a)  specific reasons for the decision;

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

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

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

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

10.1 Status of Plan. The Plan is intended to be a welfare plan that "is unfunded
     ---------------
     and is  maintained  by an employer  primarily  for the purpose of providing
     deferred   compensation   for  a  select  group  of  management  or  highly
     compensated employees" within the meaning

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<PAGE>



     of ERISA.  The Plan shall be  administered  and  interpreted  to the extent
     possible in a manner consistent with that intent.

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

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

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

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

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

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

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


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<PAGE>



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

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

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

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

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

10.12 Validity. In case any  provision  of the Plan  shall be illegal or invalid
      --------
      for any  reason, said  illegality  or  invalidity  shall  not  affect  the
      remaining parts hereof,  but the Plan shall be constructed and enforced as
      if such illegal or invalid provision had never been inserted herein.

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

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

10.15 Insurance. The  Company  or its  Affiliates,  on its own behalf and in its
      ---------
      sole  discretion, may apply for and procure  insurance  on the life of any
      Participant,  in such  amounts  and in such  forms  as it may  choose. The
      Company or its Affiliates, as the case may be, shall be the sole owner and
      beneficiary of any such insurance. No Participant  shall have any interest
      whatsoever in any such policy or policies, and a Participant  shall at the
      request of the  Company  submit to  medical examinations  and supply  such
      information and execute such documents as may be required by the insurance
      company orcompanies to whom the Company or its  Affiliates has applied for
      insurance.

     The  Company has signed the Plan as of March 1, 2003.

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                                                    PENN FEDERAL SAVINGS BANK


                                               By:   ___________________________
                                               Name: ___________________________
                                               Title: __________________________


                                                        10

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