DOWNEY FINANCIAL CORPORATION
                     ELECTIVE DEFERRED COMPENSATION PROGRAM
                                  ELECTION FORM



     I  acknowledge  that  as  an  employee  or  director  of  Downey  Financial
Corporation,  a Delaware corporation (the "Company"), or an employee or director
of a  subsidiary  of the  Company,  I  have  been  offered  the  opportunity  to
participate in the Downey Financial  Corporation elective deferred  compensation
program (the  "Program")  established  by the Company and adopted by the Company
and its subsidiaries.

     I hereby elect to participate in the Program and irrevocably  authorize the
Company or its subsidiary to make the appropriate  deductions at the appropriate
periodic payment dates, as indicated on this form, from my 2001 compensation.

================================================================================
--------------------------------------------------------------------------------
Deferral Election               (Please select only one election)

Total Compensation           I elect to defer ________% of my Total Compensation
or
Bonus/ Incentive             I elect to defer ________% of my Bonus/Incentive

Director Fees                I elect to defer ________% of my Director Fees


================================================================================

Crediting of Interest-Equivalent

     Until the normal  payout date (as defined  below),  I  understand  that the
amounts  so  deferred  will  be  credited  with  an  interest-equivalent.   Such
interest-equivalent  will be  computed  as  amounts  are  deferred  and  will be
computed in the same manner as simple interest. The  interest-equivalent for the
election  year will be computed  based on  Downey's  highest 12 month CD rate in
effect January 1, 2001.


     I further  understand  that I may be accorded one or more elections (at the
sole and absolute  discretion  of the Company) to extend the payout date for one
additional year. In the case of such an election,  I understand that the rate(s)
for  such  additional  deferral  year(s)  will be  reset  annually  and that the
interest-equivalent  will then be computed  in the same manner as interest  with
annual compounding.

Payout

     I understand  that I will receive a lump sum payout from the Company or its
subsidiary    of   100%   of   the    amount    (including    credited    earned
interest-equivalents)  attributable  to  this  elective  deferral  on or  within
forty-five (45) days after the first business day of the calendar year following
the year for which this election is made ("normal payout").  Notwithstanding the

                                       1
<PAGE>

foregoing, I further understand that I may be accorded one or more elections (at
the sole and  absolute  discretion  of the  Company)  to extend the payout  date
beyond normal or extended payout for one additional year. In the case of such an
election,  I  understand  that the actual  payout  date shall be  determined  in
accordance with such additional election.

     I  acknowledge  that I may not  voluntarily  amend the payout  schedule set
forth above. I acknowledge that I may petition for an amended payout schedule in
the case of disability or an  unforeseeable  emergency,  but that such amendment
(if any) shall only be made in the sole and absolute discretion of the Company.

     For  purposes  of  this  election,  "disability"  shall  mean a  period  of
disability  during  which I qualify  for  benefits  under the  Company's  or its
subsidiary's  long-term  disability  plan or, if I do not  participate in such a
plan, a period of  disability  during which I would have  qualified for benefits
under such a plan had I been a  participant  therein,  as determined in the sole
and absolute discretion of the Company.

     For  purposes of this  election,  "unforeseeable  emergency"  shall mean an
unanticipated  emergency that is caused by an event beyond my control that would
result  in severe  financial  hardship  to me  resulting  from (a) a sudden  and
unexpected illness or accident involving me or one of my dependents,  (b) a loss
of  my  property  due  to  casualty,   or  (c)  such  other   extraordinary  and
unforeseeable circumstances arising as a result of events beyond my control, all
as determined in the sole and absolute discretion of the Company.

     I acknowledge that my participation in the Program gives me
only the status of an unsecured  general creditor of the Company or a subsidiary
and that assets of the Company or a subsidiary that might have been available to
pay benefits to me under the Program are subject to the claims of other  general
creditors of the Company or the subsidiary, as the case may be.

Payout Accelerations

     Payout  shall be  accelerated  and made in a lump sum of 100% of the amount
(including credited earned  interest-equivalents)  attributable to this elective
deferral on or within  forty-five (45) days after the Company  receives proof of
my death or there  occurs a change in control of the  Company.  For  purposes of
this election, a "change in control" shall mean the first to occur of any of the
following events;

          (a) Any  "person"  (as that term is used in Section 13 and 14(d)(2) of
     the  Securities  Exchange  Act of 1934  ("Exchange  Act"),  other  than the
     McAlister Family Trust,  after the date hereof becomes the beneficial owner
     (as that term is used in Section  13(d) of the Exchange  Act),  directly or
     indirectly,  of 25% or more of the Company's capital stock entitled to vote
     in the election of directors;

          (b) During any period of two consecutive years, individuals who at the
     beginning of such period  constitute  the Board of Directors of the Company
     cease for any reason to constitute at least a majority thereof,  unless the
     election or the  nomination for election by the Company's  shareholders  of
     each new director was approved by a vote of at least  three-quarters of the
     directors  still in  office  who were  directors  at the  beginning  of the
     period;

                                       2
<PAGE>

          (c)  Any  consolidation  or  merger  of  the  Company,  other  than  a
     consolidation  or merger of the  Company in which the holders of the common
     stock of the Company  immediately prior to the consolidation or merger hold
     more than 50% of the common stock of the surviving corporation  immediately
     after the consolidation or merger;

          (d) The  shareholders  of the Company approve any plan or proposal for
     the liquidation or dissolution of the Company; or

          (e)  Substantially  all of the  assets  of the  Company  are  sold  or
     otherwise transferred to parties that are not within a "controlled group of
     corporations"  (as defined in Section 1563 of the Internal  Revenue Code of
     1986, as amended) in which the Company is a member.

     PAYOUT  SHALL  ALSO BE  ACCELERATED  AND  MADE IN A LUMP SUM OF 100% OF THE
AMOUNT  (INCLUDING  CREDITED EARNED  INTEREST-EQUIVALENTS)  ATTRIBUTABLE TO THIS
ELECTIVE  DEFERRAL ON OR WITHIN  FORTY-FIVE  (45) DAYS AFTER  TERMINATION  OF MY
EMPLOYMENT OR DIRECTORSHIP FOR ANY REASON;  PROVIDED,  HOWEVER, THAT IF I NOTIFY
THE COMPANY IN WRITING  PRIOR TO ACTUAL PAYOUT THAT I ELECT TO HAVE PAYOUT OCCUR
WHEN REGULARLY  SCHEDULED,  THE DEFERRAL SHALL CONTINUE AND PAYOUT SHALL BE MADE
WHEN REGULARLY SCHEDULED.

Beneficiary Designation

     In the event I die prior to full payout to me hereunder, I hereby elect for
deferred payments  otherwise payable to me hereunder to be paid to my designated
beneficiary as set forth in a separate beneficiary  designation form that I will
supply to the Company.

     In the event I choose to change my  designated  beneficiary,  I acknowledge
that such change shall be  effective  only if I provide  written  notice of such
change to the Company or its successor in form and under  procedures  reasonably
satisfactory to the Company or its successor, and that such change shall only be
effective  upon receipt of such written  notice by the Company or its successor.
In  the  event  I  designate  no  contingent  beneficiary,  or if my  designated
beneficiary  shall not survive to receive all payments due hereunder,  or if the
Company or its successor is unable to locate my designated  beneficiary after my
death after reasonable  efforts, I acknowledge that any payments that would have
been made to a  designated  beneficiary  shall  instead be paid to my  surviving
spouse;  provided that, if I have no surviving spouse, the payments will be paid
to my estate.

General Provisions

     1. This election is subject to all interpretations,  amendments,  rules and
regulations  which  may from  time to time be  promulgated  and  adopted  by the
Company pursuant to the Program.

     2. I acknowledge that the Company and my employer are not providing me with
advice,  warranties,  or  representations  regarding  any of the  legal,  tax or
business effects to me with respect to the Program or this election. Neither the
Company nor my employer


                                       3
<PAGE>

represents that my participation  in the Program will result in tax deferral.  I
have been  encouraged to seek legal,  tax and business advice from my own legal,
tax and business  advisors  prior to executing this election and have done so to
the extent I deemed appropriate.

     3. The terms and  conditions  of this  election or the Program shall not be
deemed to constitute a contract of employment  between me and the Company or any
of its subsidiaries.  Such employment is hereby  acknowledged to be an "at will"
employment  relationship that can be terminated at any time for any reason, with
or without cause,  unless expressly  provided  otherwise in a written employment
agreement.  Nothing in this  election or the Program  shall be deemed to give me
the  right  to be  retained  in  the  service  of  the  Company  or  any  of its
subsidiaries,  either as an  employee or a director,  or to  interfere  with the
right of the Company or any of its subsidiaries to discipline or discharge me at
any time.

     4. I acknowledge  that if I do not return this  election form  (executed by
me) to the Company or its subsidiary within ten (10) days after receiving notice
from the Company or subsidiary that the deferral election herein is available to
me, such election shall be deemed waived.

     5. I acknowledge that elective  deferral  elections shall be made available
under the Program by the Company or its  subsidiaries to various persons and for
various  periods  from time to time in the sole and absolute  discretion  of the
Company and that I obtain no right to make  subsequent  deferral  elections as a
result of being selected for this or any other deferral election.

     6. By signing this  instrument,  I acknowledge  that I agree to be bound by
the terms of this election.

     7. I acknowledge  that federal,  state and local income tax withholding and
payroll tax may apply as a result of participation in the Program.  I agree that
such withholding may be accomplished  with respect to the cash  compensation (if
any) due to me from the Company or its subsidiaries.  If withholding pursuant to
the foregoing  sentence is insufficient (in the sole judgment of the Company) to
satisfy the full  withholding  obligation,  I agree that such withholding may be
made from amounts otherwise payable to me hereunder.

     8. The undersigned participant:

          (a)  Understands  that all rights and liabilities with respect to this
               deferral election are set forth in this form;

          (b)  Agrees  that the  undersigned  will comply with all the terms and
               conditions of the Program;

          (c)  Acknowledges  that this form and the Program set forth the entire
               understanding  between  the  undersigned  and the Company and its
               subsidiaries and supersede all prior oral and written  agreements
               on the subject of the deferred compensation election.

                                       4
<PAGE>


Date:    ____________              _______________________________
                                   Participant

                                   SSN:___________________________

                                   Address:_______________________


AGREED TO AND ACCEPTED


                                   Company:

                                   Downey Financial Corporation,
                                   a Delaware corporation


Date:_____________                 By:___________________________
                                   Its:__________________________


                                   Subsidiary (if applicable):
                                   [name of Subsidiary]


Date:_____________                 By:___________________________
                                   Its:__________________________


                                       5
<PAGE>

                          DOWNEY FINANCIAL CORPORATION
                     ELECTIVE DEFERRED COMPENSATION PROGRAM
                             ROLLOVER ELECTION FORM


     This elective  deferred  compensation  rollover  election form is presented
pursuant to the following recitals:

     A. Downey Financial  Corporation,  a Delaware  corporation (the "Company"),
and its participating subsidiaries entered into the Downey Deferred Compensation
Plan (the "Plan") effective September 1, 1995. In conjunction with the Plan, the
Company and its participating  subsidiaries entered into the Downey Master Trust
Agreement for Deferred Compensation Plans (the "Trust") as of September 1, 1995.

     B.  Pursuant  to the Plan  and the  Trust,  certain  directors  and  select
management or highly  compensated  employees of the Company or its participating
subsidiaries  made elective  deferrals of compensation that they otherwise would
have  received.  The  undersigned  participant  made one or more  such  elective
deferrals.

     C.  The  Company  and  its   participating   subsidiaries  have  maintained
bookkeeping accounts of the compensation  deferrals referred to above, including
interest  credited  to  those  accounts  from  time  to  time.  The  undersigned
participant  currently  has such an account  maintained by the Company or one of
its participating subsidiaries.

     D.  The  terms  of the  Plan  and the  Trust  permit  the  Company  and its
participating  subsidiaries  to  terminate  the  Plan at any  time and to pay to
participants  their vested account  balances at such time, as more  particularly
set forth in the Plan and Trust documents.

     E. The  Company  and its  participating  subsidiaries  have  determined  to
terminate the Plan and the Trust  effective at a future time and date during the
calendar  year  1999  that  will be set by the  Company  and  its  participating
subsidiaries.

     F. The Company and its participating  subsidiaries have determined to offer
current  participants  in the Plan the  opportunity  to continue the deferral of
receipt of all or a portion of their  respective  account  balances  pursuant to
this election form. As a condition to such deferral,  participants  must execute
and  deliver  to the  Company  or its  participating  subsidiary  employing  the
participant this election form prior to the effective date of the termination of
the Plan and  Trust,  which will be then  prior to the time the  participant  is
eligible to receive an account  balance payout pursuant to the terms of the Plan
and Trust.

     G. FAILURE TO EXECUTE AND DELIVER A VALID  IRREVOCABLE  ELECTION  FORM ON A
TIMELY  BASIS,  OR WAIVER OF  CONTINUED  DEFERRAL,  WILL RESULT IN A PAYOUT OF A
PARTICIPANT'S

                                       1
<PAGE>

ACCOUNT  BALANCE  IN  ACCORDANCE  WITH  THE  TERMS OF THE  PLAN  AND  TRUST.

     H.  Participants  who execute and deliver a valid election form on a timely
basis will convert their  participation in the Plan into  participation in a new
Downey  Financial   Corporation  elective  deferred  compensation  program  (the
"Program")  established  by the  Company  and  adopted  by the  Company  and its
subsidiaries.  Such electing  participants in the Plan will, upon termination of
the Plan and the Trust, have their  participation in the Program governed by the
terms of this election form.

     In view of the  foregoing  recitals,  which are  incorporated  herein,  the
undersigned makes one of the following elections:

--------------------------------------------------------------------------------

DEFERRAL WAIVER IN FULL (payout of complete account balance)

The  undersigned  irrevocably  elects not to  participate  in the  Program  with
respect to any portion of the undersigned's account balance under the Plan. Upon
termination of the Plan and Trust, the undersigned will accept such payout as is
provided under the terms of the Plan and Trust.

Date:___________                   (Participant)________________________________

[THIS WAIVER IS  IRREVOCABLE  WHEN  EXECUTED AND DELIVERED TO THE COMPANY OR ITS
PARTICIPATING SUBSIDIARY.  THE REMAINDER OF THIS ELECTION FORM IS NOT APPLICABLE
TO A PARTICIPANT MAKING THIS ELECTION.]


--------------------------------------------------------------------------------

DEFERRAL  ELECTION  (deferral of complete account balance or deferral and payout
of account balance)

The undersigned  irrevocably  elects to defer receipt of % of my account balance
under the Plan,  as computed on the date of  termination  of the Plan and Trust,
and to have such deferred  amount  governed by the terms of this election  form.
Upon  termination of the Plan and Trust,  the undersigned  will accept payout of
the portion (if any) of the  undersigned's  account  balance not subject to this
deferral  election  as is  provided  under  the  terms of the Plan and Trust (as
modified by this election).


[THIS ELECTION IS IRREVOCABLE  WHEN EXECUTED AND DELIVERED TO THE COMPANY OR ITS
PARTICIPATING  SUBSIDIARY.  THE  REMAINDER  OF THIS  ELECTION  FORM APPLIES TO A
PARTICIPANT MAKING THIS ELECTION.]


--------------------------------------------------------------------------------

                                       2
<PAGE>

Crediting of Interest-Equivalent

     Until the normal  payout date (as defined  below),  I  understand  that the
amount  so  deferred  will  be  credited  with  an   interest-equivalent.   Such
interest-equivalent  will be  computed  as if the  amount  governed  hereby  was
deferred  as of the  date of  termination  of the  Plan  and  Trust  and will be
computed in the same manner as simple interest. The  interest-equivalent for the
election  year will be computed  based on  Downey's  highest 12 month CD rate in
effect January 1, 2000.

     I further  understand  that I may be accorded one or more elections (at the
sole and absolute  discretion  of the Company) to extend the payout date for one
additional year. In the case of such an election,  I understand that the rate(s)
for  such  additional  deferral  year(s)  will be  reset  annually  and that the
interest-equivalent  will then be computed  in the same manner as interest  with
annual compounding.

Payout

     I understand  that I will receive a lump sum payout from the Company or its
subsidiary    of   100%   of   the    amount    (including    credited    earned
interest-equivalents)  attributable to this elective deferral on or within forty
five (45) days after the first  business day of the calendar  year 2000 ("normal
payout").  Notwithstanding  the foregoing,  I further  understand  that I may be
accorded  one or more  elections  (at the sole and  absolute  discretion  of the
Company)  to extend the payout date  beyond  normal or  extended  payout for one
additional  year. In the case of such an election,  I understand that the actual
payout date shall be determined in accordance with such additional election.

     I  acknowledge  that I may not  voluntarily  amend the payout  schedule set
forth above. I acknowledge that I may petition for an amended payout schedule in
the case of disability or an  unforeseeable  emergency,  but that such amendment
(if any) shall only be made in the sole and absolute discretion of the Company.

     For  purposes  of  this  election,  "disability"  shall  mean a  period  of
disability  during  which I qualify  for  benefits  under the  Company's  or its
subsidiary's  long-term  disability  plan or, if I do not  participate in such a
plan, a period of  disability  during which I would have  qualified for benefits
under such a plan had I been a  participant  therein,  as determined in the sole
and absolute discretion of the Company.

     For  purposes of this  election,  "unforeseeable  emergency"  shall mean an
unanticipated  emergency that is caused by an event beyond my control that would
result in

                                       3
<PAGE>

severe  financial  hardship  to me  resulting  from (a) a sudden and  unexpected
illness  or  accident  involving  me or one of my  dependents,  (b) a loss of my
property  due to casualty,  or (c) such other  extraordinary  and  unforeseeable
circumstances arising as a result of events beyond my control, all as determined
in the sole and absolute discretion of the Company.

     I acknowledge that my participation in the Program gives me only the status
of an unsecured  general creditor of the Company or a subsidiary and that assets
of the Company or a subsidiary that might have been available to pay benefits to
me under the Program are subject to the claims of other general creditors of the
Company or the subsidiary, as the case may be.

Payout Accelerations

     Payout  shall be  accelerated  and made in a lump sum of 100% of the amount
(including credited earned  interest-equivalents)  attributable to this elective
deferral on or within  thirty (30) days after the Company  receives  proof of my
death or there occurs a change in control of the  Company.  For purposes of this
election,  a "change  in  control"  shall  mean the first to occur of any of the
following events;

          (a) Any  "person"  (as that term is used in Section 13 and 14(d)(2) of
     the  Securities  Exchange  Act of 1934  ("Exchange  Act"),  other  than the
     McAlister Family Trust,  after the date hereof becomes the beneficial owner
     (as that term is used in Section  13(d) of the Exchange  Act),  directly or
     indirectly,  of 25% or more of the Company's capital stock entitled to vote
     in the election of directors;

          (b) During any period of two consecutive years, individuals who at the
     beginning of such period  constitute  the Board of Directors of the Company
     cease for any reason to constitute at least a majority thereof,  unless the
     election or the  nomination for election by the Company's  shareholders  of
     each new director was approved by a vote of at least  three-quarters of the
     directors  still in  office  who were  directors  at the  beginning  of the
     period;

          (c)  Any  consolidation  or  merger  of  the  Company,  other  than  a
     consolidation  or merger of the  Company in which the holders of the common
     stock of the Company  immediately prior to the consolidation or merger hold
     more than 50% of the common stock of the surviving corporation  immediately
     after the consolidation or merger;

          (d) The  shareholders  of the Company approve any plan or proposal for
     the liquidation or dissolution of the Company; or

          (e)  Substantially  all of the  assets  of the  Company  are  sold  or
     otherwise transferred to parties that are not within a "controlled group of
     corporations"  (as defined in Section 1563 of the Internal  Revenue Code of
     1986, as amended) in which the Company is a member.

                                       4
<PAGE>

     Payout  shall  also be  accelerated  and  made in a lump sum of 100% of the
amount  (including  credited earned  interest-equivalents)  attributable to this
elective  deferral  on or  within  thirty  (30)  days  after  termination  of my
employment or directorship for any reason;  provided,  however, that if I notify
the Company in writing  prior to actual payout that I elect to have payout occur
when regularly  scheduled,  the deferral shall continue and payout shall be made
when regularly scheduled.

Beneficiary Designation

     In the event I die prior to full payout to me hereunder, I hereby elect for
deferred payments  otherwise payable to me hereunder to be paid to my designated
beneficiary as set forth in a separate beneficiary  designation form that I will
supply to the Company.

     In the event I choose to change my  designated  beneficiary,  I acknowledge
that such change shall be  effective  only if I provide  written  notice of such
change to the Company or its successor in form and under  procedures  reasonably
satisfactory to the Company or its successor, and that such change shall only be
effective  upon receipt of such written  notice by the Company or its successor.
In  the  event  I  designate  no  contingent  beneficiary,  or if my  designated
beneficiary  shall not survive to receive all payments due hereunder,  or if the
Company or its successor is unable to locate my designated  beneficiary after my
death after reasonable  efforts, I acknowledge that any payments that would have
been made to a  designated  beneficiary  shall  instead be paid to my  surviving
spouse;  provided that, if I have no surviving spouse, the payments will be paid
to my estate.

General Provisions

          1. This election is subject to all interpretations,  amendments, rules
     and  regulations  which may from time to time be promulgated and adopted by
     the Company pursuant to the Program.

          2. I acknowledge that the Company and my employer are not providing me
     with advice, warranties, or representations regarding any of the legal, tax
     or business  effects to me with  respect to the  Program or this  election.
     Neither the Company nor my employer represents that my participation in the
     Program will result in tax deferral.  I have been encouraged to seek legal,
     tax and business advice from my own legal, tax and business  advisors prior
     to  executing  this  election  and  have  done so to the  extent  I  deemed
     appropriate.

          3. The terms and  conditions of this election or the Program shall not
     be deemed to constitute a contract of employment between me and the Company
     or any of its subsidiaries. Such employment is hereby acknowledged to be an
     "at will"  employment  relationship  that can be terminated at any time for
     any reason, with or without cause, unless expressly provided otherwise in a
     written employment agreement. Nothing in this election or the Program shall
     be deemed to give me the right to be retained in the service of the Company
     or any

                                       5
<PAGE>

     of its subsidiaries,  either as an employee or a director,  or to interfere
     with the right of the Company or any of its  subsidiaries  to discipline or
     discharge me at any time.

          4. I acknowledge  that if I do not return this election form (executed
     by me) to the Company or its  subsidiary  within the earlier of thirty (30)
     days  after  receiving  notice  from the  Company  or  subsidiary  that the
     deferral election herein is available to me or five (5) business days prior
     to  termination  of the Plan and Trust,  such  deferral  election  shall be
     deemed waived.

          5. I  acknowledge  that  elective  deferral  elections  shall  be made
     available  under the Program by the Company or its  subsidiaries to various
     persons and for various  periods from time to time in the sole and absolute
     discretion  of the  Company  and that I obtain no right to make  subsequent
     deferral  elections  as a result  of being  selected  for this or any other
     deferral election.

          6. By signing this instrument,  I acknowledge that I agree to be bound
     by the terms of this election.

          7. I acknowledge that federal,  state and local income tax withholding
     and payroll tax may apply as a result of  participation  in the Program.  I
     agree that such  withholding may be  accomplished  with respect to the cash
     compensation  (if any) due to me from the Company or its  subsidiaries.  If
     withholding pursuant to the foregoing sentence is insufficient (in the sole
     judgment  of the  Company) to satisfy the full  withholding  obligation,  I
     agree that such withholding may be made from amounts  otherwise  payable to
     me hereunder.

          8. The undersigned participant:

               (a) Understands  that all rights and liabilities  with respect to
          this deferral election are set forth in this form;

               (b) Agrees  that the  undersigned  will comply with all the terms
          and conditions of the Program;

               (c)  Acknowledges  that this form and the  Program  set forth the
          entire  understanding  between the undersigned and the Company and its
          subsidiaries  and supersede  all prior oral and written  agreements on
          the subject of the deferred compensation rollover election.


Date:____________                  _______________________________
                                   Participant

                                   SSN:___________________________

                                   Address:_______________________

                                       6
<PAGE>

AGREED TO AND ACCEPTED


                                    Company:

                                    Downey Financial Corporation,
                                    a Delaware corporation


Date:_____________                  By:___________________________
                                    Its:__________________________


                                    Subsidiary (if applicable):
                                    [name of Subsidiary]


Date:_____________                  By:___________________________
                                    Its:___________________________

                                       7
<PAGE>

                          DOWNEY FINANCIAL CORPORATION
                     ELECTIVE DEFERRED COMPENSATION PROGRAM
                           DESIGNATION OF BENEFICIARY




     As a participant  in the Downey  Financial  Corporation  elective  deferred
compensation  program  (the  "Program"),   I,  _______________,   designate  the
following  as  beneficiary(ies)  for the  payment  of death  benefits  under the
Program:

                            PRIMARY BENEFICIARY(IES)


              Beneficiary                              Percentage of Benefit

1.   ____________________________                _______________________________

2.   ____________________________                _______________________________

3.   ____________________________                _______________________________



                           CONTINGENT BENEFICIARY(IES)


               Beneficiary                             Percentage of Benefit

1.   ____________________________                _______________________________

2.   ____________________________                _______________________________

3.   ____________________________                _______________________________


NOTE:If you are married and you wish to designate a beneficiary  other than your
     spouse,  your spouse's  notarized consent is necessary.  If you marry after
     executing this  designation,  the designation  may be  ineffective,  so you
     should complete a new beneficiary designation form. If you name your spouse
     as primary  beneficiary,  your spouse need not sign the form,  and the form
     need not be notarized.

     I understand that my designation herein is effective upon its execution and
delivery to Downey Financial Corporation (the "Company"). I also understand that
the right to change a  beneficiary  is  reserved to me as a  participant  in the
Program.  I further understand that any change of beneficiary shall be effective
only if I provide written notice of such change to the Company or its successor.

                                       1
<PAGE>

I acknowledge  that any change of a beneficiary  to someone other than my spouse
shall be subject  to the  notarized  consent  of my spouse and that such  change
shall be effective  only upon  receipt of such written  notice by the Company or
the successor. In the event that I designate no contingent  beneficiary,  or any
designated  beneficiary  does not survive to receive all  payments due under the
Program,  or if the Company or its  successor is unable to locate my  designated
beneficiary  after my death after  reasonable  efforts,  I acknowledge  that any
payments that would be made to a designated beneficiary shall instead be paid to
my surviving spouse;  provided that, if I have no surviving spouse, the payments
will be paid to my estate.



DATED: _________________, ____.                ___________________________
                                               (Signature of Participant)

RECEIPT:   Received by Downey Financial Corporation, on _____________, ___.



By:  _____________________________

Its: _____________________________

                                       2
<PAGE>


                                 SPOUSAL CONSENT


     Spousal  consent and  notarization  is only  required if you name a primary
beneficiary other than your spouse.

I,  _______________________,  consent to the  designation  of  beneficiary by my
spouse to receive  benefits  under the  Downey  Financial  Corporation  elective
deferred compensation program (the "Program"). I understand and acknowledge that
(1) the effect of this  consent  is that any death  benefits  payable  under the
Program will be paid not to me but to the designated beneficiary,  (2) that each
beneficiary  designation  is not valid  unless I  consent  to it and (3) that my
consent is irrevocable unless my spouse revoked the beneficiary designation.


By: _________________________________________      Date:  ________________
    (Signature of Spouse) - Must be Notarized


STATE OF CALIFORNIA                 )
                                    ) ss.
COUNTY OF _________________         )


     On_________________before me, _________________________________  personally
appeared ______________________,  personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to the
within  instrument  and  acknowledged  to me that  he/she  executed  the same in
his/her authorized  capacity and that by his/her signature on the instrument the
person,  or the entity  upon  behalf of which the  person  acted,  executed  the
instrument.

     WITNESS my hand and official seal.



-------------------------------------------
            (Notary Public)

                                                           (SEAL)

                                       3
<PAGE>