BANK EMPLOYMENT AGREEMENT

   This AGREEMENT is made  effective as of June 27, 1996 by and between  Jamaica
Savings Bank FSB (the  "Bank"),  a corporation  organized  under the laws of the
United  States,  with its principal  administrative  office at 303 Merrick Road,
Lynbrook, New York 11563, and Robert A. Neumuth ("Executive").  Any reference to
"Holding  Company"  herein  shall  mean JSB  Financial,  Inc.  or any  successor
thereto.

     WHEREAS,  the Bank wishes to assure itself of the services of Executive for
the period provided in this Agreement; and

     WHEREAS,  Executive  is  willing  to serve in the  employ  of the Bank on a
full-time basis for said period.

     NOW, THEREFORE,  in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   POSITION AND RESPONSIBILITIES.

     During the period of his employment hereunder, Executive agrees to serve as
Senior Vice President of the Bank. During said period,  Executive also agrees to
serve, if elected,  as an officer and director of any subsidiary or affiliate of
the Bank.  Failure to reelect  Executive  as Senior Vice  President  without the
consent of the Executive shall constitute a breach of this Agreement.

2.   TERMS AND DUTIES.

     (a) The period of  Executive's  employment  under this  Agreement  shall be
deemed to have  commenced as of the date first above written and shall  continue
for a period of thirty six (36) full calendar months  thereafter.  Commencing on
the first anniversary date of this Agreement, and continuing at each anniversary
date thereafter,  the Agreement shall renew for an additional year such that the
remaining  term shall be three (3) years  unless  written  notice is provided to
Executive at least ten (10) days and not more than twenty (20) days prior to any
such anniversary date, that his employment shall cease at the end of twenty-four
(24) months following such anniversary  date. Prior to the written notice period
for  non-renewal,  the Board of Directors of the Bank  ("Board")  will conduct a
formal  performance  evaluation  of the  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.

     (b) 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 devote  substantially all his business time,
attention,  skill,  and  efforts  to the  faithful  performance  of  his  duties
hereunder  including  activities  and  services  related  to  the  organization,
operation and management of the Bank; provided, however, that, with the approval
of the Board,  as evidenced by a  resolution  of such Board,  from time to time,
Executive  may serve,  or continue to serve,  on the boards of directors of, and
hold any other offices or positions in,  companies or  organizations,  which, in
such Board's judgment,  will not present any conflict of interest with the Bank,
or materially  affect the  performance  of Executive's  duties  pursuant to this
Agreement.

3.   COMPENSATION AND REIMBURSEMENT.

     (a) The  compensation  specified under this Agreement shall  constitute the
salary and  benefits  paid for the duties  described in Section  2(b).  The Bank
shall pay Executive as  compensation  a salary of not less than $82,000 per year
("Base Salary").  Such Base Salary shall be payable biweekly.  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 December 31, 1996.  Such review
shall be conducted  by a Committee  designated  by the Board,  and the Board may
increase  Executive's  Base Salary.  In addition to the Base Salary  provided in
this Section 3(a), the Bank shall provide Executive at no cost to Executive with
all such  other  benefits  as are  provided  uniformly  to  permanent  full-time
employees of the Bank.

<PAGE>
     (b)  The  Bank  will  provide  Executive  with  employment  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 Bank 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
Subsection (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 plan, medical coverage or any other employee benefit plan or
arrangement  made  available by the Bank 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 Bank in which Executive is eligible to participate. Nothing paid
to the Executive under any such plan or arrangement will be deemed to be in lieu
of other compensation to which the Executive is entitled under this Agreement.

     (c) In addition to the Base Salary  provided for by  paragraph  (a) of this
Section 3, the Bank shall pay or reimburse  Executive for all reasonable  travel
and other reasonable  expenses incurred by Executive  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.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     The  provisions  of this  Section  shall in all  respects be subject to the
terms and conditions stated in Sections 8 and 16.

     (a) Upon the  occurrence  of an Event of  Termination  (as herein  defined)
during the Executive's term of employment  under this Agreement,  the provisions
of  this  Section  shall  apply.  As  used  in  this  Agreement,  an  "Event  of
Termination"  shall mean and include any one or more of the  following:  (i) the
termination  by the  Bank  or  the  Holding  Company  of  Executive's  full-time
employment  hereunder for any reason other than a Change in Control,  as defined
in  Section  5(a)  hereof or for Cause,  as  defined  in Section 8 hereof;  (ii)
Executive's resignation from the Bank's employ, upon any (A) failure to elect or
reelect or to appoint or  reappoint  Executive  as Senior  Vice  President,  (B)
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,  (and any such  material  change  shall be deemed a continuing
breach of this  Agreement),  (C) a relocation of Executive's  principal place of
employment by more than 30 miles from its location at the effective date of this
Agreement,  or a material  reduction  in the  benefits  and  perquisites  to the
Executive from those being provided as of the effective date of this  Agreement,
(D) liquidation or dissolution of the Bank or Holding Company,  or (E) breach of
this  Agreement  by the Bank.  Upon the  occurrence  of any event  described  in
clauses (A),  (B),  (C), (D) or (E),  above,  Executive  shall have the right to
elect to terminate his employment  under this Agreement by resignation  upon not
less than sixty (60) days prior written notice given within a reasonable  period
of time not to exceed,  except in case of a  continuing  breach,  four  calendar
months after the event giving rise to said right to elect.

<PAGE>

     (b)  Upon  the  occurrence  of an  Event  of  Termination,  on the  Date of
Termination,  as defined in Section 9, the Bank 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 the greater of the payments due for the  remaining  term of the  Agreement or
three (3) times the average of the three preceding years' Base Salary, including
bonuses and any other cash compensation paid to the Executive during such years,
and the amount of any benefits  received pursuant to any employee benefit plans,
on behalf of the  Executive,  maintained  by the Bank during such years.  At the
election of the Executive,  which election is to be made within thirty (30) days
of an Event of  Termination,  such payments  shall be made in a lump sum or paid
monthly  during the remaining  term of the Agreement  following the  Executive's
termination.  In the event that no  election is made,  payment to the  Executive
will be made on a monthly basis during the remaining term of the Agreement. Such
payments  shall  not be  reduced  in  the  event  the  Executive  obtains  other
employment following termination of employment.

     (c) Upon the occurrence of an Event of Termination,  the Bank will cause to
be  continued  life,  medical,  dental  and  disability  coverage  substantially
identical  to the coverage  maintained  by the Bank for  Executive  prior to his
termination. Such coverage shall cease upon the expiration of the remaining term
of this Agreement.

     (d) In the event that the Executive is receiving  monthly payments pursuant
to Section 4(b) hereof,  on an annual  basis,  thereafter,  between the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount  payable  under the Agreement at that time shall be paid in a lump
sum or on a prorata basis.  Such election shall be irrevocable  for the year for
which such election is made.

5.   CHANGE IN CONTROL.

     (a) No benefit  shall be payable  under this  Section 5 unless  there shall
have been a Change  in  Control  of the Bank or  Holding  Company,  as set forth
below.  For  purposes  of this  Agreement,  a "Change in Control" of the Bank or
Holding  Company shall mean an event of a nature that;  (i) would be required to
be  reported  in  response  to Item 1 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  "Exchange  Act");  or (ii)  results  in a Change of
Control of the Bank or the Holding Company within the meaning of the Home Owners
Loan Act of 1933 and the  Rules and  Regulations  promulgated  by the  Office of
Thrift Supervision (or its predecessor agency), as in effect on the date hereof;
or (iii)  without  limitation  such a Change in Control  shall be deemed to have
occurred at such time as (a) any "person" (as the term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial  owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly,  of securities of
the Bank or the Holding  Company  representing  20% or more of the Bank's or the
Holding Company's  outstanding  securities except for any securities of the Bank
purchased by the Holding  Company in connection  with the conversion of the Bank
to the stock form and any  securities  purchased  by the Bank's  employee  stock
ownership  plan and trust;  or (b)  individuals  who constitute the Board on the
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  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 merger, consolidation or sale of all or substantially all the assets of
the Bank or the Holding  Company in which the Bank or Holding Company is not the
resulting  entity  occurs;  or (d) a proxy  statement  soliciting  proxies  from
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 Bank with one
or more corporations as a result of which the outstanding shares of the class of
securities  then subject to the Plan are exchanged for or converted into cash or
property or  securities  not issued by the Bank or the Holding  Company shall be
distributed;  or (e) a  tender  offer  is made  for  20% or  more of the  voting
securities of the Bank or Holding Company.


<PAGE>

     (b) If any of the events  described in Section 5(a) hereof  constituting  a
Change in Control  have  occurred or the Board has  determined  that a Change in
Control has occurred,  Executive  shall be entitled to the benefits  provided in
paragraphs (c), (d), (e), (f), (g) and (h) of this Section 5 upon his subsequent
termination  of  employment  at any  time  during  the  term of  this  Agreement
(regardless  of whether such  termination  results from his  resignation  or his
dismissal),  unless such  termination is because of his death,  termination  for
Cause or termination for Disability. Upon the Change in Control, Executive shall
have the right to elect to terminate his  employment  with the Bank at any time,
for any reason, during the term of this Agreement.

     (c) Upon the occurrence of a Change in Control  followed by the Executive's
termination of employment,  the Bank 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 the
greater of the payments due for the remaining term of the Agreement or three (3)
times the average of the three preceding years' Base Salary,  including  bonuses
and any other cash compensation paid to the Executive during such years, and the
amount of any contributions made to any employee benefit plans, on behalf of the
Executive,  maintained  by the Bank during such  years.  At the  election of the
Executive,  which  election is to be made within thirty (30) days of the Date of
Termination  following a Change in Control,  such  payment may be made in a lump
sum or paid in equal  monthly  installments  during the  thirty-six  (36) months
following the  Executive's  termination.  In the event that no election is made,
payment to the  Executive  will be made on a monthly  basis during the remaining
term of the Agreement.

     (d) Upon the occurrence of a Change in Control  followed by the Executive's
termination of employment,  the Bank will cause to be continued  life,  medical,
dental  and  disability  coverage   substantially   identical  to  the  coverage
maintained by the Bank for Executive  prior to his severance.  Such coverage and
payments shall cease upon the expiration of thirty-six (36) months.

     (e) Upon the occurrence of a Change in Control,  Executive will be entitled
to any benefits  granted to him pursuant to any Stock Option Plan of the Bank or
Holding Company.

     (f) Upon the  occurrence  of a Change  in  Control  the  Executive  will be
entitled  to any  benefits  awarded  to him under  the  Bank's  Recognition  and
Retention Plan arising from a Change in Control.

     (g) In the event that the Executive is receiving  monthly payments pursuant
to Section 5(c) hereof,  on an annual  basis,  thereafter,  between the dates of
January 1 and January 31 of each year, Executive shall elect whether the balance
of the amount  payable  under the Agreement at that time shall be paid in a lump
sum or on a prorata basis.  Such election shall be irrevocable  for the year for
which such election is made.

(h)  Notwithstanding  the  preceding  paragraphs of this Section 5, in the event
     that:

     (i)  the aggregate payments or benefits to be made or afforded to Executive
          under said paragraphs (the "Termination  Benefits") would be deemed to
          include an "excess  parachute  payment" under Section 280G of the Code
          or any successor thereto, and

     (ii) if  such   Termination   Benefits  were  reduced  to  an  amount  (the
          "Non-Triggering  Amount"),  the value of which is one  dollar  ($1.00)
          less  than an  amount  equal  to three  (3)  times  Executive's  "base
          amount",  as determined in accordance  with said Section 280G, and the
          Non-Triggering Amount would be greater than the aggregate value of the
          Termination  Benefits (without such reduction) minus the amount of tax
          required to be paid by Executive  thereon by Section 4999 of the Code,
          then the Termination  Benefits shall be reduced to the  Non-Triggering
          Amount.  The  allocation  of the reduction  required  hereby among the
          Termination  Benefits  provided by the  preceding  paragraphs  of this
          Section 5 shall be determined by the Executive.


<PAGE>

6.   TERMINATION FOR DISABILITY.

     (a) If, as a result of  Executive's  incapacity  due to  physical or mental
illness,  he shall have been absent from his duties with the Bank on a full-time
basis for twelve  (12)  consecutive  months,  and within  thirty (30) days after
written  notice of potential  termination is given he shall not have returned to
the full-time  performance  of his duties,  the Bank or the Holding  Company may
terminate Executive's employment for "Disability".

     (b) The Bank will pay  Executive,  as  disability  pay, a biweekly  payment
equal to three-quarters (3/4) of Executive's biweekly rate of Base Salary on the
effective date of such termination.  These disability payments shall commence on
the effective date of Executive's termination and will end on the earlier of (i)
the date Executive  returns to the full-time  employment of the Bank in the same
capacity as he was employed prior to his termination for Disability and pursuant
to an employment  agreement  between  Executive and the Bank;  (ii)  Executive's
full-time  employment by another employer;  (iii) Executive attaining the normal
age of retirement or receiving  benefits under the Bank's Defined  Benefit Plan;
(iv) Executive's death; or (v) Executive's eligibility to collect payments under
the disability provision of the Defined Benefit Plan.  Notwithstanding any other
provision  to the  contrary,  the Bank may apply any  proceeds  from  disability
income  insurance  for  Executive  which  was paid  for by the  Bank as  partial
satisfaction of its obligation under this Section.

     (c)  The  Bank  will  cause  to be  continued  life,  medical,  dental  and
disability  coverage  substantially  identical to the coverage maintained by the
Bank for Executive prior to his termination for Disability.  This coverage shall
cease  upon the  earlier  of (i) the date  Executive  returns  to the  full-time
employment  of the Bank,  in the same  capacity as he was employed  prior to his
termination  for  Disability  and pursuant to an  employment  agreement  between
Executive  and the  Bank;  (ii)  Executive's  full-time  employment  by  another
employer;  (iii) Executive's attaining the normal age of retirement or receiving
benefits under the Bank's Defined Benefit Plan;  (iv) the Executive's  death; or
(v) the  Executive's  eligibility  to  collect  payments  under  the  disability
provision of the Defined Benefit Plan.

     (d)  Notwithstanding  the  foregoing,  there  will be no  reduction  in the
compensation  otherwise  payable to  Executive  during any period  during  which
Executive is incapable of performing his duties hereunder by reason of temporary
disability.

7.   TERMINATION UPON RETIREMENT.

     Termination by the Bank of the Executive based on  "Retirement"  shall mean
termination  in accordance  with the Bank's  retirement  policy or in accordance
with any  retirement  arrangement  established  with  Executive's  consent  with
respect to him. Upon termination of Executive upon  Retirement,  Executive shall
be  entitled to all  benefits  under any  retirement  plan of the Bank and other
plans to which Executive is a party.


<PAGE>

8.   TERMINATION FOR CAUSE.

     The term  "Termination  for Cause"  shall mean  termination  because of the
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than 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.  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.  The Executive  shall not have the right to
receive  compensation  or other  benefits for any period after  Termination  for
Cause. Any stock options granted to Executive under any stock option plan of the
Bank, the Holding Company or any subsidiary or affiliate  thereof,  shall become
null and void effective upon  Executive'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.

9.   NOTICE.

     (a)  Any  purported  termination  by the  Bank  or by  Executive  shall  be
communicated by Notice of Termination to the other party hereto. For purposes of
this  Agreement,  a "Notice of  Termination"  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.

     (b) "Date of  Termination"  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.)

     (c) 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  occurrence of a
Change  in  Control  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  there from  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 Bank 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 him 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.
Amounts paid under this  Section are in addition to all other  amounts due under
this  Agreement and shall not be offset  against or reduce any other amounts due
under this Agreement.

10.  POST-TERMINATION OBLIGATIONS.

     (a) All payments and benefits to Executive  under this  Agreement  shall be
subject to Executive's  compliance  with paragraph (b) of this Section 10 during
the term of this  Agreement  and for one (1) full year after the  expiration  or
termination hereof.


<PAGE>

     (b) Executive shall, upon reasonable  notice,  furnish such information and
assistance  to the Bank as may  reasonably be required by the Bank in connection
with any litigation in which it or any of its  subsidiaries or affiliates is, or
may become, a party.

11.  NON-DISCLOSURE.

     Executive  recognizes and  acknowledges  that the knowledge of the business
activities and plans for business activities of the Bank and affiliates thereof,
as it may exist from time to time,  is a valuable,  special and unique  asset of
the business of the Bank.  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 Bank or  affiliates  thereof to any  person,  firm,
corporation,   or  other   entity  for  any   reason  or   purpose   whatsoever.
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 Bank. In the
event of a breach or  threatened  breach by the  Executive of the  provisions of
this  Section  11,  the  Bank  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 Bank 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
Bank from pursuing any other  remedies  available to the Bank for such breach or
threatened breach, including the recovery of damages from Executive.

12.  SOURCE OF PAYMENTS.

     All  payments  provided in this  Agreement  shall be timely paid in cash or
check  from the  general  funds  of the  Bank.  The  Holding  Company,  however,
guarantees  payment and  provision of all amounts and benefits due  hereunder to
Executive  and, if such  amounts and  benefits  due from the Bank are not timely
paid or  provided  by the  Bank,  such  amounts  and  benefits  shall be paid or
provided by the Holding  Company.  Notwithstanding  any other  provision  to the
contrary,  the Bank may apply any proceeds from disability  income insurance for
Executive  which  was  paid  for by the  Bank  as  partial  satisfaction  of its
obligation under Section 6(b).

13.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and  supersedes  any  prior  employment   agreement  between  the  Bank  or  any
predecessor  of the Bank and  Executive,  except that this  Agreement  shall not
affect or operate to reduce any benefit or compensation inuring to the Executive
of  a  kind  elsewhere  provided.  No  provision  of  this  Agreement  shall  be
interpreted to mean that  Executive is subject to receiving  fewer benefits than
those available to him without reference to this Agreement.

14.  NO ATTACHMENT.

     (a) 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.

     (b) This  Agreement  shall be binding  upon,  and inure to the  benefit of,
Executive and the Bank and their respective successors and assigns.

15.  MODIFICATION AND WAIVER.

     (a) This  Agreement may not be modified or amended  except by an instrument
in writing signed by the parties hereto.

     (b) 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.

<PAGE>

16.  REQUIRED PROVISIONS.

     (a) The Bank may terminate the Executive's  employment at any time, but any
termination by the Bank, other than  Termination for Cause,  shall not prejudice
Executive's  right to  compensation  or other  benefits  under  this  Agreement.
Executive shall not have the right to receive compensation or other benefits for
any period after Termination for Cause as defined in Section 8 herein above.

     (b) If the Executive is suspended from office and/or temporarily prohibited
from participating in the conduct of the Bank's affairs by a notice served under
Section  8(e)(3)  (12 USC  1818(e)(3))  or 8(g) (12 USC  1818(g)) of the Federal
Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, the Bank's obligations under this contract shall be
suspended as of the date of service,  unless stayed by appropriate  proceedings.
If the charges in the notice are  dismissed,  the Bank may in its discretion (i)
pay the Executive all or part of the compensation  withheld while their contract
obligations  were  suspended and (ii) reinstate (in whole or in part) any of the
obligations which were suspended.

     (c)  If  the  Executive  is  removed  and/or  permanently  prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Section 8(e) (12 USC  1818(e)) or 8(g) (12 USC  1818(g)) of the Federal  Deposit
Insurance  Act, as amended by the Financial  Institutions  Reform,  Recovery and
Enforcement  Act of 1989, all  obligations of the Bank under this contract shall
terminate  as of the  effective  date of the  order,  but  vested  rights of the
contracting parties shall not be affected.

     (d) If the Bank is in default as  defined in Section  3(x) (12 USC  1813(x)
(1))  of the  Federal  Deposit  Insurance  Act,  as  amended  by  the  Financial
Institutions  Reform,  Recovery and  Enforcement Act of 1989, all obligations of
the Bank under this contract shall terminate as of the date of default, but this
paragraph shall not affect any vested rights of the contracting parties.

     (e) All  obligations  of the Bank under this contract  shall be terminated,
except to the extent  determined that  continuation of the contract is necessary
for the  continued  operation  of the  institution,  (i) by the Federal  Deposit
Insurance  Corporation,  at the time FDIC  enters into an  agreement  to provide
assistance to or on behalf of the Bank under the authority  contained in Section
13(c) (12 USC 1823(c)) of the Federal  Deposit  Insurance Act, as amended by the
Financial  Institutions Reform,  Recovery and Enforcement Act of 1989 or (ii) by
the Office of Thrift  Supervision  ("OTS")  at the time the OTS or its  District
Director  approves  a  supervisory  merger to  resolve  problems  related to the
operations  of the Bank or when the Bank is  determined by the OTS or FDIC to be
in an unsafe or unsound  condition.  Any rights of the parties that have already
vested, however, shall not be affected by such action.

17.  SEVERABILITY.

     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.

18.  HEADINGS FOR REFERENCE ONLY.

     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.

<PAGE>

19.  GOVERNING LAW.

     This  Agreement  shall be governed by the laws of the State of New York but
only to the extent not superseded by Federal law.

20.  ARBITRATION.

     Any  dispute  or  controversy  arising  under or in  connection  with  this
Agreement  shall be settled  exclusively by  arbitration in accordance  with the
rules of the American  Arbitration  Association then in effect.  Judgment may be
entered on the arbitrator's  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.

21.  PAYMENT OF LEGAL FEES.

     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 Bank.

22.  INDEMNIFICATION.
     The Bank  shall  provide  Executive  (including  his heirs,  executors  and
administrators)   with  coverage  under  a  standard  directors'  and  officers'
liability insurance policy at its expense,  or in lieu thereof,  shall indemnify
Executive (and his heirs,  executors and  administrators)  to the fullest extent
permitted  under  Federal law against all  expenses and  liabilities  reasonably
incurred  by him in  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 Bank  (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 to be
approved  by the Board of  Directors  of the  Bank,  if such  action is  brought
against  Executive  in his  capacity  as an  officer  or  director  of the Bank,
however,  shall not extend to matters as to which Executive is finally  adjudged
to be liable for willful misconduct in the performance of his duties.

23.  SUCCESSOR TO THE BANK.

     The Bank  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 Bank or the  Holding  Company,
expressly  and  unconditionally  to  assume  and  agree to  perform  the  Bank's
obligations under this Agreement, in the same manner and to the same extent that
the Bank would be required to perform if no such  succession or  assignment  had
taken place.

<PAGE>


24.  SIGNATURES.

   IN  WITNESS  WHEREOF,  the Bank and the  Holding  Company  have  caused  this
Agreement  to be  executed  and its seal to be  affixed  hereunto  by their duly
authorized  officers and Executive  has signed this  Agreement on the 9th day of
July, 1996.


ATTEST:                                        JAMAICA SAVINGS BANK FSB



Joanne Corrigan                                BY: Edward P. Henson
------------------------                           -----------------------
Joanne Corrigan                                    Edward P. Henson
Secretary                                          President


SEAL



ATTEST:                                        JSB FINANCIAL, INC.



Joanne Corrigan                                BY: Edward P. Henson
------------------------                           -----------------------
Joanne Corrigan                                    Edward P. Henson
Secretary                                          President


SEAL



WITNESS:


Lawrence J. Kane                               Robert A. Neumuth
------------------------                       ---------------------------
Lawrence J. Kane                               Robert A. Neumuth
Senior Vice President                          Executive