AGREEMENT FOR LEGAL SERVICES

         THIS AGREEMENT for legal services made this 27th day of April, 1995, by
and between:

                           ANDORA, PALMISANO & GEANEY
                           A Professional Corporation
                         303 Molnar Drive, P.O. Box 431
                      Elmwood Park, New Jersey 07407-0431
                    hereinafter referred to as "Attorneys",

                                      and

                   INTERCHANGE FINANCIAL SERVICES CORPORATION
                            Park 80 West, Plaza Two
                         Saddle Brook, New Jersey 07662

                                      and

                             INTERCHANGE STATE BANK
                             A Banking Corporation
                            Park 80 West, Plaza Two
                         Saddle Brook, New Jersey 07662
                     hereinafter referred to as "Clients".

     IN  CONSIDERATION  of  the  mutual  promises,  covenants  and  undertakings
contained herein the Attorneys and the Clients agree as follows:

1.       RETAINER

         Clients hereby retain the services of Attorneys to act as its corporate
counsel for the term and compensation as outlined herein.

2.       TERM

         The  Attorneys  shall be  retained  by  Clients  until the next  annual
reorganization meeting of Clients.

3.       COMPENSATION

         The Clients shall pay the Attorneys for services  rendered as corporate
counsel an annual retainer of NINETY-FIVE  THOUSAND DOLLARS ($95,000.00) payable
in  equal  monthly  installments  on the  first  day of  each  and  every  month
commencing the first day of the month following the execution of this Agreement.
Clients  shall,  in addition to the annual  retainer,  pay to the  Attorneys all
out-of-pocket  expenses,  filing fees, or disbursements made by the Attorneys on
Clients'  behalf.  Clients  shall,  in  addition  to the  payment  of the annual
retainer and all costs,  pay to the  Attorneys a legal fee based on the rate per
hour as shown on  Schedule A for all legal  services  provided to Clients by the
Attorney  which are "legal  services  rendered in addition to those  rendered as
corporate  counsel." Such fees and costs shall be billed by Attorneys to clients
on a thirty-day basis and Clients shall pay all bills within five (5) days after
each monthly Board of Director's meeting of the Clients.

4.       DEFINITIONS

     The following words and phrases shall have the following meanings:

     A.   "Legal services rendered as corporate  counsel" shall mean and include
          all of the following types of legal work:

          1.   Except as  hereinafter  set  forth in  subparagraph  B,  document
               review  and  drafting  of  documents  on  behalf  of the  Clients
               including,   but  not  limited  to:  leases,  notes,   contracts,
               mortgages,    commitment    letters,    disclosure    statements,
               modifications,  extensions  and legal  agreements  not related to
               third-party borrowers, except residential mortgage reviews.

               2.   Providing  legal  advice  required  in the  usual  course of
                    Clients' business including compliance analysis.

               3.   Attendance at Board of Director's and Shareholders' Meetings
                    other than as a Director.

               4.   Advice regarding levies and executions

               5.   Preparation  of annual  SEC 10K,  10Q and  "ordinary"  proxy
                    filings.

     B.   "Legal  services  rendered in  addition  to those  rendered as general
          corporate counsel" shall mean and include,  but not be limited to, all
          of the  following  types of legal  work  which  shall be  billed on an
          hourly basis:

               1.   Litigation in which Clients are named as defendants.

               2.   Litigation or other proceedings in which Clients and another
                    person  or  agency  (i.e.,  Small  Business  Administration)
                    specially  retain  Attorney.  The hourly rate for such legal
                    services shall be specifically  agreed upon by Clients,  the
                    agency, and Attorneys.

               3.   Foreclosure litigation, including lien protection litigation
                    in any Court including the Bankruptcy Court.

               4.   Regulatory or administrative  law proceedings  including but
                    not  limited to  Department  of  Banking,  zoning  agencies,
                    N.L.R.B., F.D.I.C., and Tax Court.

               5.   Loan  reviews  and  closings,  including  modifications  and
                    extensions thereof,  except that the fee shall be based upon
                    $250.00  per hour plus  costs and such fee shall not  exceed
                    1/2% of the  principal  amount of the loan plus costs but in
                    no event shall such fee be less than $250.00.

               6.   Closings in which the bank is a buyer or seller.

               7.   SEC Filings other than annual 10K, 10Q or  "ordinary"  proxy
                    filings.

               8.   Mergers and Acquisitions.

               9.   All  other  legal  services  not  specifically  set forth in
                    Paragraph 4A.

5.       BINDING EFFECT

         This agreement  shall be binding upon and shall inure to the benefit of
the parties' successors or assigns.

6.       NO ASSIGNMENT

         This  agreement  shall not be  assigned  or sublet  without the express
written consent of the parties.

7.       LAW APPLICABLE

         This  agreement  shall  be  governed  by the  laws of the  State of New
Jersey.

8.       SEVERABILITY

     In the event any clause,  section or paragraph of this  agreement  shall be
declared  invalid or unenforceable  by a court of competent  jurisdiction,  such
invalid or unenforceability shall not affect the remainder of this Agreement.


<PAGE>



     IN WITNESS WHEREOF the parties have hereunto signed this agreement the date
first above written. 

INTERCHANGE STATE BANK

ATTEST:


/s/Benjamin Rosenzweig                               /s/ Anthony S. Abbate  
-----------------------------                     ---------------------------  
Benjamin Rosenzweig, Secretary                    Anthony S. Abbate, President


INTERCHANGE FINANCIAL SERVICES CORPORATION

ATTEST:

/s/Benjamin Rosenzweig                                /s/ Anthony S. Abbate 
------------------------------                     ---------------------------
Benjamin Rosenzweig, Secretary                     Anthony S. Abbate, President


ANDORA, PALMISANO & GEANEY

ATTEST:




s/sJohn P. Palmisano,                                  s/sAnthony D. Andora 
----------------------------                      ----------------------------
John P. Palmisano, Secretary                      Anthony D. Andora, President


<PAGE>


                                   SCHEDULE A


     The hourly rates contained  herein are subject to change on the anniversary
dates of the Agreement of Legal Services.

     Schedule A, reviewed and approved at Annual Reorganization Meeting on April
27, 1995.


                  Andora D. Andora                   $250.00 per hour

                  John P. Palmisano                  $250.00 per hour

                  John F. Geaney                     $250.00 per hour

                  Other Partners and
                  Senior Associates                  $175.00 per hour

                  Other Associates                   $150.00 per hour

<PAGE>









May 22, 1995






Mr. Anthony S. Abbate
6 Robin Hood Court
Montvale, NJ 07645

Dear Mr. Abbate:

Interchange  Financial Services  Corporation,  a New Jersey Bank Holding Company
(the  "Company"),  considers the maintenance of a sound and vital executive team
to be essential to protecting  and  enhancing the best  interests of the Company
and its  stockholders.  In this  connection,  the  Company  recognizes  that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility,  and the uncertainty and questions which it may raise
among  management,  may result in the departure or  distraction of executives to
the  detriment of the Company and its  stockholders.  Accordingly,  the Board of
Directors of the Company (the "Board") has  determined  that  appropriate  steps
should  be  taken  to  reinforce  and  encourage  the  continued  attention  and
dedication of members of the Company's executive team.

This letter agreement sets forth the severance benefits which the Company agrees
will be  provided  to you in the  event  your  employment  with the  Company  is
terminated  subsequent  to a "change in control of the  Company"  (as defined in
Section 2 hereof) under the circumstances described below.


1.   Company's Right to Terminate  

     
     During  the  term of this  Agreement,  you  agree  that  you  will not
     voluntarily  leave the  employ of the  Company  except as may be  permitted
     hereunder,  and will  continue to perform your regular  duties as President
     and Chief Executive Officer of the Company.  Notwithstanding the foregoing,
     the Company may terminate your employment at any time, subject to providing
     the benefits hereinafter specified in accordance with the terms hereof.

2.   Change in Control 

     No  benefits  shall be payable  hereunder  unless  there  shall have been a
     change in control of the Company,  as set forth below,  and your employment
     by the Company shall  thereafter  have been  terminated in accordance  with
     Section 3 below.  For purposes of this  Agreement,  a "change in control of
     the Company"  shall mean,  unless the Board  otherwise  directs  resolution
     approved by unanimous vote of the entire  membership  thereof adopted prior
     thereto,  a change in control  of a nature  that  would be  required  to be
     reported  in  response  to Item  5(f) of  Schedule  14A of  Regulation  14A
     promulgated  under  the  Securities   Exchange  Act  of  1934,  as  amended
     ("Exchange  Act");  provided  that,  without  limitation,  such a change in
     control  shall be deemed to have occurred if (i) any "person" (as such 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 Company representing more than
     25% control of the combined voting power of the Company's then  outstanding
     securities;   or  (ii)  during  any  period  of  three  consecutive  years,
     individuals who at the beginning of such period  constitute the Board cease
     for any  reason  to  constitute  at least a  majority  thereof  unless  the
     election, or the nomination for election by the Company's stockholders,  of
     each new  director  was  approved by a vote of at least  two-thirds  of the
     directors  then still in office who were  directors at the beginning of the
     period.

3.   Termination Following Change in Control

     If any of the events described in Section 2 hereof constituting a change in
     control of the Company  shall have  occurred,  you shall be entitled to the
     benefits provided in Section 4 hereof upon your subsequent termination,  so
     long as such  termination  occurs  within three (3) years after a change in
     control of the  Company,  unless  such  termination  is (A) because of your
     death or  Retirement,  (B) by the Company for Cause or Disability or (c) by
     you other than for Good Reason.

     (i)  Disability; Retirement

          (A)  Termination   by  the  Company  of  your   employment   based  on
               "Disability" shall mean termination  because of your absence from
               your  duties  with  the  Company  on a  full-time  basis  for 130
               consecutive  business days, as a result of your incapacity due to
               physical or mental illness,  unless within thirty (30) days after
               Notice of Termination (as hereinafter defined) is given following
               such   absence,   you  shall  have  returned  to  the  full  time
               performance of your duties; or

          (B)  Termination  by the  Company or you of your  employment  based on
               "Retirement" shall mean your voluntary  termination in accordance
               with the Company's retirement policy, including early retirement,
               generally applicable to its salaried employees.

     (ii) Cause  

          Termination  by the  Company of your  employment  for Cause shall mean
          your termination on account of:

          (A)  Your willful  commission  of an act that causes or is  reasonably
               likely to cause substantial damage to the Company;

          (B)  Your  commission  of an act of fraud in the  performance  of your
               duties on behalf of the Company;

          (C)  Your  conviction  for  commission  of a  felony  or  other  crime
               punishable by confinement  for a period in excess of one (1) year
               in connection  with the  performance  of your duties on behalf of
               the Company; or

          (D)  The order of a federal or state bank regulatory agency or a court
               of  competent  jurisdiction  requiring  the  termination  of your
               employment.

     (iii) Good Reason

          Termination  by you of your  employment  for "Good  Reason" shall mean
          termination based on:

          (A)  Subsequent  to a change in control of the  Company,  and  without
               your express written consent, the assignment to you of any duties
               inconsistent with your positions,  duties,  responsibilities  and
               status with the Company immediately prior to a change in control,
               or a change in your reporting responsibilities, titles or offices
               as in effect  immediately  prior to a change in  control,  or any
               removal of you from or any failure to re-elect you to any of such
               positions,  except in  connection  with the  termination  of your
               employment for Cause,  Disability or Retirement or as a result of
               your death or by you other than for Good Reason;

          (B)  Subsequent to a change in control of the Company,  a reduction by
               the  Company in your base  salary as in effect on the date hereof
               or as the same may be increased from time to time;

          (C)  Subsequent  to a change in control of the  Company,  a failure by
               the  Company  to  continue  any  bonus  plans  in  which  you are
               presently entitled to participate (the "Bonus Plans") as the same
               may be modified from time to time but  substantially in the forms
               currently in effect,  or a failure by the Company to continue you
               as a participant in the Bonus Plans on at least the same basis as
               you presently participate in accordance with the Bonus Plans;

          (D)  Subsequent to a change in control of the Company and without your
               express written consent,  the Company's requiring you to be based
               anywhere  other than  within  thirty  (30) miles of your  present
               office  location,  except for  required  travel on the  Company's
               business to an extent substantially  consistent with your present
               business travel obligations;

          (E)  Subsequent  to change in control of the  Company,  the failure by
               the Company to  continue  in effect any  benefit or  compensation
               plan,  stock  ownership plan,  stock purchase plan,  stock option
               plan, life insurance plan, health-and-accident plan or disability
               plan in which  you are  participating  at the time of a change in
               control of the Company (or plans providing you with substantially
               similar benefits),  the taking of any action by the Company which
               would adversely affect your participation in or materially reduce
               your  benefits  under  any of such  plans or  deprive  you of any
               material  fringe benefit enjoyed by you at the time of the change
               in control, or the failure by the Company to provide you with the
               number of paid  vacation  days to which you are then  entitled in
               accordance with the company's normal vacation policy in effect on
               the date hereof;

          (F)  Subsequent to a change in control of the Company,  the failure by
               the Company to obtain the  assumption of the agreement to perform
               this  Agreement  by any  successor as  contemplated  in Section 6
               hereof; or

          (G)  Subsequent  to a change in control of the Company,  any purported
               termination of your employment which is not effected  pursuant to
               a Notice of Termination  satisfying the requirements of paragraph
               (iv) below (and, if applicable,  paragraph  (ii) above);  and for
               purposes of this Agreement,  no such purported  termination shall
               be effective.

         (iv) Notice of Termination

               Any purported  termination  by the Company  pursuant to paragraph
               (i) or (ii)  above  or by you  pursuant  to  subparagraph  (B) of
               paragraph (i) or paragraph  (iii) above shall be  communicated by
               written  Notice of  Termination  to the other party  hereto.  For
               purposes of this Agreement,  a "Notice of Termination" shall mean
               a 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 your employment under the provision so indicated.

         (v) Date of Termination

               "Date  of  Termination"  shall  mean  (A) if your  employment  is
               terminated  for  Disability,  thirty  (30) days  after  Notice of
               Termination  is given  (provided that you shall not have returned
               to the  performance  of your duties on a full-time  basis  during
               such  thirty  (30)  day  period),   (B)  if  your  employment  is
               terminated  pursuant to paragraph (ii) above,  the date specified
               in the  Notice  of  Termination,  and (C) if your  employment  is
               terminated  for any other  reason,  the date on which a Notice of
               Termination  is given;  provided  that 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,  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 and final
               arbitration  award or by a final  judgment,  order or decree of a
               court of competent  jurisdiction  entered  upon such  arbitration
               award (the time of appeal  therefrom having expired and no appeal
               having been perfected).

4.   Certain Benefits Upon Termination

     If,  after a change in  control of the  Company  shall  have  occurred,  as
     defined  in  Section  2 above,  your  employment  by the  Company  shall be
     terminated  (A)  by  the  Company  other  than  for  Cause,  Disability  or
     Retirement or (B) by you for Good Reason, then you shall be entitled to the
     benefits provided below:

     (i)  The Company  shall pay you your full base  salary  through the Date of
          Termination at the rate in effect at the time Notice of Termination is
          given  plus  credit  for any  vacation  earned  but not  taken and the
          amount, if any, of any bonus for a past fiscal year and the portion of
          the current  fiscal year ending on the Date of  Termination  which has
          not yet been awarded or paid to you under the Bonus Plans;

     (ii) In lieu of any further salary  payments to you for periods  subsequent
          to the Date of Termination,  the Company shall pay as severance pay to
          you on the  fifth day  following  the Date of  Termination  a lump sum
          amount equal to three (3) times your annual base salary at the highest
          rate in effect during the twelve (12) months immediately preceding the
          Date of Termination;

     (iii)The Company shall also pay to you all legal fees and expenses incurred
          by you as a result of such  termination  (including  all such fees and
          expenses,  if any,  incurred  in  contesting  or  disputing  any  such
          termination  or in seeking  to obtain or enforce  any right or benefit
          provided by this Agreement);

     (iv) The  Company  shall  maintain  in full  force  and  effect,  for  your
          continued  benefit  until the earlier of (A) three (3) years after the
          Date of Termination or (B) your  commencement  of full time employment
          with a new employer, all life insurance, medical, health and accident,
          and  disability  plans,  programs  or  arrangements  in which you were
          entitled to participate  immediately prior to the Date of Termination,
          provided  that your  continued  participation  is  possible  under the
          general terms and provisions of such plans and programs.  In the event
          that your  participation  in any such plan or program  is barred,  the
          Company  shall  arrange to  provide  you with  benefits  substantially
          similar to those which you are  entitled  to receive  under such plans
          and programs. In addition, the Company shall pay you a lump sum amount
          of equivalent  actuarial  value to the additional  pension benefit you
          would have earned under the Company's Pension Plan as in effect on the
          date the change of  control  occurs,  but  disregarding  any  Internal
          Revenue Code  limitations  pertaining to qualified  plans, if you were
          granted  at the  time of your  termination  of  employment  three  (3)
          additional  years of  Credited  Service and deemed 3 years older under
          the  Plan.  In  determining  the  equivalent  actuarial  value  of the
          additional  pension  granted under this Section 4, an interest rate of
          5% and the mortality  table under the Company's  Pension Plan shall be
          used to determine the lump sum amount.

     You shall not be required to  mitigate  the amount of any payment  provided
     for in this Section 4 by seeking other  employment or otherwise,  nor shall
     the amount of any payment  provided for in this Section 4 be reduced by any
     compensation  earned by you as the result of employment by another employer
     after the Date of Termination or otherwise.

5.   Certain Further Payments by the Corporation

     In the event that any amount or benefit paid or distributed to you pursuant
     to this  Agreement,  taken with any amounts or benefits  otherwise  paid or
     distributed to you by the Company or any affiliated  company  (collectively
     the  "Covered  Payments"),  are or become  subject to the tax (the  "Excise
     Tax")  imposed  under  Section 4999 of the Code or any similar tax that may
     hereafter be imposed,  the Company  shall pay to you at the time  specified
     below an additional amount (the "Tax Reimbursement  Payment") such that the
     net amount  retained by you with  respect to such Covered  Payments,  after
     deduction of any Excise Tax on the Covered Payments and any Federal,  state
     and  local  income  tax and  Excise  Tax on the Tax  Reimbursement  Payment
     provided for by this Section 5, but before deduction for any Federal, state
     or local income or employment  tax  withholding  on such Covered  Payments,
     shall be equal to the amount of the Covered Payments.

     (i)  For purposes of determining  whether any of the Covered  Payments will
          be subject to the Excise Tax and the amount of such Excise Tax,

          (A)  Such Covered  Payments  will be treated as  "parachute  payments"
               within  the  meaning  of  Section  280G  of  the  Code,  and  all
               "parachute  payments" in excess of the "base  amount" (as defined
               under Section 280G(b)(3) of the Code) shall be treated as subject
               to the Excise Tax, unless,  and except to the extent that, in the
               opinion of the Company's independent certified public accountants
               appointed  prior to the date the Change of Control  occurs or tax
               counsel selected by such accountants  (the  "Accountants"),  such
               Covered  Payments (in whole or in part) either do not  constitute
               parachute  payments  or  represent  reasonable  compensation  for
               services   actually  rendered  (within  the  meaning  of  Section
               280G(b)(4) of the Code) in excess of the "base  amount",  or such
               parachute  payments are otherwise not subject to such Excise Tax,
               and

          (B)  The value of any  non-cash  benefits or any  deferred  payment or
               benefit shall be determined by the Accountants in accordance with
               the principles of Section 280G of the Code.

     (ii) For  purposes  of  determining  the  amount  of the Tax  Reimbursement
          Payment, you shall be deemed to pay:

          (A)  Federal income taxes at the highest  applicable  marginal rate of
               Federal  income  taxation for the calendar  year in which the Tax
               Reimbursement Payment is to be made, and

          (B)  Any  applicable  state  and  local  income  taxes at the  highest
               applicable  marginal  rate of taxation for the  calendar  year in
               which the Tax  Reimbursement  Payment  is to be made,  net of the
               maximum reduction in Federal income taxes which could be obtained
               from the  deduction  of such state or local taxes if paid in such
               year.

     (iii)In the event that the Excise Tax is subsequently determined to be less
          than the amount taken into account  hereunder in  calculating  the Tax
          Reimbursement  Payment  made,  you shall repay to the Company,  at the
          time that the  amount of such  reduction  in the Excise Tax is finally
          determined,  the portion of such prior Tax Reimbursement  Payment that
          would  not have  been  paid if such  Excise  Tax had been  applied  in
          initially calculating such Tax Reimbursement Payment, plus interest on
          the  amount  of  such  repayment  at  the  rate  provided  in  Section
          1274(b)(2)(B) of the Code.

          In the event  that the Excise  Tax is later  determined  to exceed the
          amount taken into account  hereunder at the time the Tax Reimbursement
          Payment  is made  (including,  but not  limited  to,  by reason of any
          payment the  existence or amount of which cannot be  determined at the
          time of the Tax  Reimbursement  Payment),  the  Company  shall make an
          additional Tax  Reimbursement  Payment in respect of such excess (plus
          any  interest or penalty  payment  with respect to such excess) at the
          time that the amount of such excess is finally determined.

     (iv) The Tax  Reimbursement  Payment (or portion  thereof)  provided for in
          this  Section 5 shall be paid to you not later than ten (10)  business
          days following the payment of the Covered Payments; provided, however,
          that if the  amount  of such Tax  Reimbursement  Payment  (or  portion
          thereof)  cannot be finally  determined on or before the date on which
          payment is due,  the  Company  shall pay to you by such date an amount
          estimated in good faith by the Accountants to be the minimum amount of
          such Tax Reimbursement Payment and shall pay the remainder of such Tax
          Reimbursement  Payment (together with interest at the rate provided in
          Section  1274(b)(2)(B)  of the Code) as soon as the amount thereof can
          be  determined,  but in no event  later  than 45  calendar  days after
          payment of the related Covered  Payment.  In the event that the amount
          of  the  estimated  Tax  Reimbursement   Payment  exceeds  the  amount
          subsequently determined to have been due, such excess shall constitute
          a loan by the  Corporation  to you,  payable on the fifth business day
          after  written  demand  by the  Company  for  payment  (together  with
          interest at the rate provided in Section 1274(b)(2)(B) of the Code).

6.   Term of Agreement

     This Agreement  shall continue in effect so long as you are employed by the
     Company provided that, if a change of control of the Company, as defined in
     Section 2 hereof,  shall have occurred  during the term of this  Agreement,
     this  Agreement  shall  continue in effect for a period of thirty-six  (36)
     months beyond the month in which such change in control occurred.

7.   Successor; Binding Agreement

     (i)  The Company will require any successor (whether direct or indirect, by
          purchase, merger,  consolidation or otherwise) to all or substantially
          all of the business and/or assets of the Company, by agreement in form
          and substance  satisfactory  to you, to expressly  assume and agree to
          perform this  Agreement in the same manner and to the same extent that
          the Company would be required to perform it if no such  succession had
          taken place.  Failure of the Company to obtain such agreement prior to
          the  effectiveness  of any such  succession  shall be a breach of this
          Agreement  and shall entitle you to  compensation  from the Company in
          the same  amount  and on the  same  terms  as you  would  be  entitled
          hereunder if you terminated  your  employment for Good Reason,  except
          that for purposes of implementing the foregoing, the date on which any
          such  succession  becomes  effective  shall  be  deemed  the  Date  of
          Termination.  As used in this  Agreement,  "Company"  shall  mean  the
          Company as  hereinbefore  defined and any  successor  to its  business
          and/or assets as aforesaid  which  executes and delivers the agreement
          provided for in this Section 7 or which otherwise becomes bound by all
          the terms and provisions of this Agreement by operation of law.

     (ii) This  Agreement  shall inure to the benefit of and be  enforceable  by
          your  personal or legal  representatives,  executors,  administrators,
          successors, heirs, distributees,  devisees and legatees. If you should
          die while any amount  would still be payable to you  hereunder  if you
          had continued to live,  all such amounts,  unless  otherwise  provided
          herein,  shall be paid in accordance  with the terms of this Agreement
          to your  devisee,  legatee or other  designee  or, if there be no such
          designee, to your estate.

8.   Notice

     For the purpose of this  Agreement,  notices  and all other  communications
     provided for in this  Agreement  shall be in writing and shall be deemed to
     have been duly given when  delivered or mailed by  certified or  registered
     mail,  return  receipt  requested,   postage  prepaid,   addressed  to  the
     respective  addresses  set  forth  on the  first  page of  this  Agreement,
     provided that all notices to the Company shall be directed to the attention
     of the  President  of the  Company  with a  copy  to the  Secretary  of the
     Company, or to such other address as either party may have furnished to the
     other in writing in  accordance  herewith,  except that notice of change of
     address shall be effective only upon receipt.

9.   Miscellaneous
         
     No provision of this Agreement may be modified, waived or discharged unless
     such waiver,  modification  or discharge is agreed to in writing  signed by
     you and such  officer  as may be  specifically  designated  by the Board of
     Directors of the  Company.  No waiver by either party hereto at any time of
     any breach by the other party hereto of, or compliance  with, any condition
     or provision of this Agreement to be performed by such other party shall be
     deemed a waiver of similar or  dissimilar  provisions  or conditions at the
     same or at any prior or subsequent time. No agreements or  representations,
     oral or otherwise, expressed or implied, with respect to the subject matter
     hereof have been made by either party which are not  expressly set forth in
     this Agreement;  provided, however, that this Agreement shall not supersede
     or in any way limit the rights,  duties or  obligations  you may have under
     any other written agreement with the Company. The validity, interpretation,
     construction  and  performance of this  Agreement  shall be governed by the
     laws of the State of New Jersey.

10.  Validity  

     The invalidity or unenforceability of any provision of this Agreement shall
     not affect the validity or  enforceability  of any other  provision of this
     Agreement, which shall remain in full force and effect.

11.  Tax  Withholding  

     The Company may withhold from any amounts payable under this Agreement such
     federal,  state or local taxes as shall be required to be withheld pursuant
     to any applicable law or regulation.

12.  Counterparts  

     This Agreement may be executed in one or more  counterparts,  each of which
     shall be deemed to be an original but all of which together will constitute
     one and the same instrument.

13.  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.

If this letter  correctly sets forth our agreement on the subject matter hereof,
kindly  sign and return to the Company the  enclosed  copy of this letter  which
will then constitute our agreement on this subject.

                                   Sincerely,
                                  THE COMPANY
                       By   /S/Anthony D. Andora
                         ------------------------
                             Name: Anthony D. Andora
                             Title:Chairman of the Board

Agreed to this 26th day of May, 1995.


   /s/Anthony S. Abbate
   ----------------------------------
   Anthony S. Abbate, President & CEO

Attest by:  /s/Benjamin Rosenzweig
            ----------------------
            Benjamin Rosenzweig, Secretary

<PAGE>











May 22, 1995






Mr. Robert N. Harris
7 Brockden Drive
Mendham, NJ 07945

Dear Mr. Harris:

Interchange  Financial Services  Corporation,  a New Jersey Bank Holding Company
(the  "Company"),  considers the maintenance of a sound and vital executive team
to be essential to protecting  and  enhancing the best  interests of the Company
and its  stockholders.  In this  connection,  the  Company  recognizes  that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility,  and the uncertainty and questions which it may raise
among  management,  may result in the departure or  distraction of executives to
the  detriment of the Company and its  stockholders.  Accordingly,  the Board of
Directors of the Company (the "Board") has  determined  that  appropriate  steps
should  be  taken  to  reinforce  and  encourage  the  continued  attention  and
dedication of members of the Company's executive team.

This letter agreement sets forth the severance benefits which the Company agrees
will be  provided  to you in the  event  your  employment  with the  Company  is
terminated  subsequent  to a "change in control of the  Company"  (as defined in
Section 2 hereof) under the circumstances described below.


<PAGE>


1.   Company's Right to Terminate

     During the term of this Agreement,  you agree that you will not voluntarily
     leave the employ of the Company except as may be permitted  hereunder,  and
     will continue to perform your regular duties as Executive Vice President of
     the Company.  Notwithstanding the foregoing, the Company may terminate your
     employment  at any time,  subject to  providing  the  benefits  hereinafter
     specified in accordance with the terms hereof.

2.   Change in Control

     No  benefits  shall be payable  hereunder  unless  there  shall have been a
     change in control of the Company,  as set forth below,  and your employment
     by the Company shall  thereafter  have been  terminated in accordance  with
     Section 3 below.  For purposes of this  Agreement,  a "change in control of
     the Company"  shall mean,  unless the Board  otherwise  directs  resolution
     approved by unanimous vote of the entire  membership  thereof adopted prior
     thereto,  a change in control  of a nature  that  would be  required  to be
     reported  in  response  to Item  5(f) of  Schedule  14A of  Regulation  14A
     promulgated  under  the  Securities   Exchange  Act  of  1934,  as  amended
     ("Exchange  Act");  provided  that,  without  limitation,  such a change in
     control  shall be deemed to have occurred if (i) any "person" (as such 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 Company representing more than
     25% control of the combined voting power of the Company's then  outstanding
     securities; or (ii) during any period of two consecutive years, individuals
     who at the  beginning  of such  period  constitute  the Board cease for any
     reason to constitute at least a majority  thereof  unless the election,  or
     the  nomination  for election by the  Company's  stockholders,  of each new
     director was  approved by a vote of at least  two-thirds  of the  directors
     then still in office who were directors at the beginning of the period.

3.   Termination Following Change in Control

     If any of the events described in Section 2 hereof constituting a change in
     control of the Company  shall have  occurred,  you shall be entitled to the
     benefits provided in Section 4 hereof upon your subsequent termination,  so
     long as such  termination  occurs  within  two (2) years  after a change in
     control of the  Company,  unless  such  termination  is (A) because of your
     death or  Retirement,  (B) by the Company for Cause or Disability or (c) by
     you other than for Good Reason. 

     (i)  Disability; Retirement

          (A)  Termination   by  the  Company  of  your   employment   based  on
               "Disability" shall mean termination  because of your absence from
               your  duties  with  the  Company  on a  full-time  basis  for 130
               consecutive  business days, as a result of your incapacity due to
               physical or mental illness,  unless within thirty (30) days after
               Notice of Termination (as hereinafter defined) is given following
               such   absence,   you  shall  have  returned  to  the  full  time
               performance of your duties;  or 

          (B)  Termination  by the  Company or you of your  employment  based on
               "Retirement" shall mean your voluntary  termination in accordance
               with the Company's retirement policy, including early retirement,
               generally applicable to its salaried employees.

     (ii) Cause

          Termination  by the  Company of your  employment  for Cause shall mean
          your termination on account of:

          (A)  Your willful  commission  of an act that causes or is  reasonably
               likely to cause substantial damage to the Company;

          (B)  Your  commission  of an act of fraud in the  performance  of your
               duties on behalf of the Company;

          (C)  Your  conviction  for  commission  of a  felony  or  other  crime
               punishable by confinement  for a period in excess of one (1) year
               in connection  with the  performance  of your duties on behalf of
               the Company; or

          (D)  The order of a federal or state bank regulatory agency or a court
               of  competent  jurisdiction  requiring  the  termination  of your
               employment.

     (iii) Good Reason

          Termination  by you of your  employment  for "Good  Reason" shall mean
          termination based on:

          (A)  Subsequent  to a change in control of the  Company,  and  without
               your express written consent, the assignment to you of any duties
               inconsistent with your positions,  duties,  responsibilities  and
               status with the Company immediately prior to a change in control,
               or a change in your reporting responsibilities, titles or offices
               as in effect  immediately  prior to a change in  control,  or any
               removal of you from or any failure to re-elect you to any of such
               positions,  except in  connection  with the  termination  of your
               employment for Cause,  Disability or Retirement or as a result of
               your death or by you other than for Good Reason;

          (B)  Subsequent to a change in control of the Company,  a reduction by
               the  Company in your base  salary as in effect on the date hereof
               or as the same may be increased from time to time;

          (C)  Subsequent  to a change in control of the  Company,  a failure by
               the  Company  to  continue  any  bonus  plans  in  which  you are
               presently entitled to participate (the "Bonus Plans") as the same
               may be modified from time to time but  substantially in the forms
               currently in effect,  or a failure by the Company to continue you
               as a participant in the Bonus Plans on at least the same basis as
               you presently participate in accordance with the Bonus Plans;

          (D)  Subsequent to a change in control of the Company and without your
               express written consent,  the Company's requiring you to be based
               anywhere  other than  within  thirty  (30) miles of your  present
               office  location,  except for  required  travel on the  Company's
               business to an extent substantially  consistent with your present
               business travel obligations;

          (E)  Subsequent  to change in control of the  Company,  the failure by
               the Company to  continue  in effect any  benefit or  compensation
               plan,  stock  ownership plan,  stock purchase plan,  stock option
               plan, life insurance plan, health-and-accident plan or disability
               plan in which  you are  participating  at the time of a change in
               control of the Company (or plans providing you with substantially
               similar benefits),  the taking of any action by the Company which
               would adversely affect your participation in or materially reduce
               your  benefits  under  any of such  plans or  deprive  you of any
               material  fringe benefit enjoyed by you at the time of the change
               in control, or the failure by the Company to provide you with the
               number of paid  vacation  days to which you are then  entitled in
               accordance with the company's normal vacation policy in effect on
               the date hereof;

          (F)  Subsequent to a change in control of the Company,  the failure by
               the Company to obtain the  assumption of the agreement to perform
               this  Agreement  by any  successor as  contemplated  in Section 6
               hereof; or

          (G)  Subsequent  to a change in control of the Company,  any purported
               termination of your employment which is not effected  pursuant to
               a Notice of Termination  satisfying the requirements of paragraph
               (iv) below (and, if applicable,  paragraph  (ii) above);  and for
               purposes of this Agreement,  no such purported  termination shall
               be effective.

     (iv) Notice of Termination

          Any purported  termination by the Company pursuant to paragraph (i) or
          (ii) above or by you pursuant to subparagraph  (B) of paragraph (i) or
          paragraph  (iii)  above  shall be  communicated  by written  Notice of
          Termination to the other party hereto. For purposes of this Agreement,
          a "Notice of Termination" shall mean a 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 your employment under the provision
          so indicated.

     (v)  Date of Termination

          "Date of Termination"  shall mean (A) if your employment is terminated
          for Disability,  thirty (30) days after Notice of Termination is given
          (provided that you shall not have returned to the  performance of your
          duties on a full-time  basis during such thirty (30) day period),  (B)
          if your employment is terminated pursuant to paragraph (ii) above, the
          date  specified  in  the  Notice  of  Termination,  and  (C)  if  your
          employment  is terminated  for any other  reason,  the date on which a
          Notice of  Termination  is given;  provided that 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,  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 and final arbitration award or
          by a  final  judgment,  order  or  decree  of  a  court  of  competent
          jurisdiction  entered upon such arbitration  award (the time of appeal
          therefrom having expired and no appeal having been perfected).

4.   Certain Benefits Upon Termination

     If,  after a change in  control of the  Company  shall  have  occurred,  as
     defined  in  Section  2 above,  your  employment  by the  Company  shall be
     terminated  (A)  by  the  Company  other  than  for  Cause,  Disability  or
     Retirement or (B) by you for Good Reason, then you shall be entitled to the
     benefits  provided  below:  (i) The  Company  shall  pay you your full base
     salary  through the Date of  Termination  at the rate in effect at the time
     Notice of Termination is given plus credit for any vacation  earned but not
     taken and the  amount,  if any, of any bonus for a past fiscal year and the
     portion of the current fiscal year ending on the Date of Termination  which
     has not yet been awarded or paid to you under the Bonus Plans;

     (ii) In lieu of any further salary  payments to you for periods  subsequent
          to the Date of Termination,  the Company shall pay as severance pay to
          you on the  fifth day  following  the Date of  Termination  a lump sum
          amount  equal to two (2) times your  annual base salary at the highest
          rate in effect during the twelve (12) months immediately preceding the
          Date of Termination;

     (iii)The  Company  shall  also  pay to you  all  legal  fees  and  expenses
          incurred by you as a result of such  termination  (including  all such
          fees and  expenses,  if any,  incurred in  contesting or disputing any
          such  termination  or in  seeking  to obtain or  enforce  any right or
          benefit provided by this Agreement);

     (iv) The  Company  shall  maintain  in full  force  and  effect,  for  your
          continued  benefit  until the  earlier of (A) two (2) years  after the
          Date of Termination or (B) your  commencement  of full time employment
          with a new employer, all life insurance, medical, health and accident,
          and  disability  plans,  programs  or  arrangements  in which you were
          entitled to participate  immediately prior to the Date of Termination,
          provided  that your  continued  participation  is  possible  under the
          general terms and provisions of such plans and programs.  In the event
          that your  participation  in any such plan or program  is barred,  the
          Company  shall  arrange to  provide  you with  benefits  substantially
          similar to those which you are  entitled  to receive  under such plans
          and programs. In addition, the Company shall pay you a lump sum amount
          of equivalent  actuarial  value to the additional  pension benefit you
          would have earned under the Company's Pension Plan as in effect on the
          date the change of  control  occurs,  but  disregarding  any  Internal
          Revenue Code  limitations  pertaining to qualified  plans, if you were
          granted  at the  time  of  your  termination  of  employment  two  (2)
          additional  years of  Credited  Service and deemed 2 years older under
          the  Plan.  In  determining  the  equivalent  actuarial  value  of the
          additional  pension  granted under this Section 4, an interest rate of
          5% and the mortality  table under the Company's  Pension Plan shall be
          used to determine the lump sum amount.

          You  shall not be  required  to  mitigate  the  amount of any  payment
          provided  for  in  this  Section  4 by  seeking  other  employment  or
          otherwise,  nor shall the amount of any payment  provided  for in this
          Section 4 be reduced by any  compensation  earned by you as the result
          of employment by another  employer  after the Date of  Termination  or
          otherwise.

5.   Certain Further Payments by the Corporation

     In the event that any amount or benefit paid or distributed to you pursuant
     to this  Agreement,  taken with any amounts or benefits  otherwise  paid or
     distributed to you by the Company or any affiliated  company  (collectively
     the  "Covered  Payments"),  are or become  subject to the tax (the  "Excise
     Tax")  imposed  under  Section 4999 of the Code or any similar tax that may
     hereafter be imposed,  the Company  shall pay to you at the time  specified
     below an additional amount (the "Tax Reimbursement  Payment") such that the
     net amount  retained by you with  respect to such Covered  Payments,  after
     deduction of any Excise Tax on the Covered Payments and any Federal,  state
     and  local  income  tax and  Excise  Tax on the Tax  Reimbursement  Payment
     provided for by this Section 5, but before deduction for any Federal, state
     or local income or employment  tax  withholding  on such Covered  Payments,
     shall be equal to the amount of the Covered  Payments.  

     (i)  For purposes of determining  whether any of the Covered  Payments will
          be subject to the Excise Tax and the amount of such  Excise  Tax,  

          (A)  Such Covered  Payments  will be treated as  "parachute  payments"
               within  the  meaning  of  Section  280G  of  the  Code,  and  all
               "parachute  payments" in excess of the "base  amount" (as defined
               under Section 280G(b)(3) of the Code) shall be treated as subject
               to the Excise Tax, unless,  and except to the extent that, in the
               opinion of the Company's independent certified public accountants
               appointed  prior to the date the Change of Control  occurs or tax
               counsel selected by such accountants  (the  "Accountants"),  such
               Covered  Payments (in whole or in part) either do not  constitute
               parachute  payments  or  represent  reasonable  compensation  for
               services   actually  rendered  (within  the  meaning  of  Section
               280G(b)(4) of the Code) in excess of the "base  amount",  or such
               parachute  payments are otherwise not subject to such Excise Tax,
               and 

          (B)  The value of any  non-cash  benefits or any  deferred  payment or
               benefit shall be determined by the Accountants in accordance with
               the principles of Section 280G of the Code.

     (ii) For  purposes  of  determining  the  amount  of the Tax  Reimbursement
          Payment, you shall be deemed to pay:

          (A)  Federal income taxes at the highest  applicable  marginal rate of
               Federal  income  taxation for the calendar  year in which the Tax
               Reimbursement Payment is to be made, and

          (B)  Any  applicable  state  and  local  income  taxes at the  highest
               applicable  marginal  rate of taxation for the  calendar  year in
               which the Tax  Reimbursement  Payment  is to be made,  net of the
               maximum reduction in Federal income taxes which could be obtained
               from the  deduction  of such state or local taxes if paid in such
               year.

     (iii)In the event that the Excise Tax is subsequently determined to be less
          than the amount taken into account  hereunder in  calculating  the Tax
          Reimbursement  Payment  made,  you shall repay to the Company,  at the
          time that the  amount of such  reduction  in the Excise Tax is finally
          determined,  the portion of such prior Tax Reimbursement  Payment that
          would  not have  been  paid if such  Excise  Tax had been  applied  in
          initially calculating such Tax Reimbursement Payment, plus interest on
          the  amount  of  such  repayment  at  the  rate  provided  in  Section
          1274(b)(2)(B) of the Code.

          In the event  that the Excise  Tax is later  determined  to exceed the
          amount taken into account  hereunder at the time the Tax Reimbursement
          Payment  is made  (including,  but not  limited  to,  by reason of any
          payment the  existence or amount of which cannot be  determined at the
          time of the Tax  Reimbursement  Payment),  the  Company  shall make an
          additional Tax  Reimbursement  Payment in respect of such excess (plus
          any  interest or penalty  payment  with respect to such excess) at the
          time that the amount of such excess is finally determined.

     (iv) The Tax  Reimbursement  Payment (or portion  thereof)  provided for in
          this  Section 5 shall be paid to you not later than ten (10)  business
          days following the payment of the Covered Payments; provided, however,
          that if the  amount  of such Tax  Reimbursement  Payment  (or  portion
          thereof)  cannot be finally  determined on or before the date on which
          payment is due,  the  Company  shall pay to you by such date an amount
          estimated in good faith by the Accountants to be the minimum amount of
          such Tax Reimbursement Payment and shall pay the remainder of such Tax
          Reimbursement  Payment (together with interest at the rate provided in
          Section  1274(b)(2)(B)  of the Code) as soon as the amount thereof can
          be  determined,  but in no event  later  than 45  calendar  days after
          payment of the related Covered  Payment.  In the event that the amount
          of  the  estimated  Tax  Reimbursement   Payment  exceeds  the  amount
          subsequently determined to have been due, such excess shall constitute
          a loan by the  Corporation  to you,  payable on the fifth business day
          after  written  demand  by the  Company  for  payment  (together  with
          interest at the rate provided in Section 1274(b)(2)(B) of the Code).

6.   Term of Agreement

     This Agreement  shall continue in effect so long as you are employed by the
     Company provided that, if a change of control of the Company, as defined in
     Section 2 hereof,  shall have occurred  during the term of this  Agreement,
     this  Agreement  shall  continue in effect for a period of thirty-six  (36)
     months beyond the month in which such change in control occurred.

7.   Successor; Binding Agreement

     (i)  The Company will require any successor (whether direct or indirect, by
          purchase, merger,  consolidation or otherwise) to all or substantially
          all of the business and/or assets of the Company, by agreement in form
          and substance  satisfactory  to you, to expressly  assume and agree to
          perform this  Agreement in the same manner and to the same extent that
          the Company would be required to perform it if no such  succession had
          taken place.  Failure of the Company to obtain such agreement prior to
          the  effectiveness  of any such  succession  shall be a breach of this
          Agreement  and shall entitle you to  compensation  from the Company in
          the same  amount  and on the  same  terms  as you  would  be  entitled
          hereunder if you terminated  your  employment for Good Reason,  except
          that for purposes of implementing the foregoing, the date on which any
          such  succession  becomes  effective  shall  be  deemed  the  Date  of
          Termination.  As used in this  Agreement,  "Company"  shall  mean  the
          Company as  hereinbefore  defined and any  successor  to its  business
          and/or assets as aforesaid  which  executes and delivers the agreement
          provided for in this Section 7 or which otherwise becomes bound by all
          the terms and provisions of this Agreement by operation of law.

     (ii) This  Agreement  shall inure to the benefit of and be  enforceable  by
          your  personal or legal  representatives,  executors,  administrators,
          successors, heirs, distributees,  devisees and legatees. If you should
          die while any amount  would still be payable to you  hereunder  if you
          had continued to live,  all such amounts,  unless  otherwise  provided
          herein,  shall be paid in accordance  with the terms of this Agreement
          to your  devisee,  legatee or other  designee  or, if there be no such
          designee, to your estate.

8.   Notice

     For the purpose of this  Agreement,  notices  and all other  communications
     provided for in this  Agreement  shall be in writing and shall be deemed to
     have been duly given when  delivered or mailed by  certified or  registered
     mail,  return  receipt  requested,   postage  prepaid,   addressed  to  the
     respective  addresses  set  forth  on the  first  page of  this  Agreement,
     provided that all notices to the Company shall be directed to the attention
     of the  President  of the  Company  with a  copy  to the  Secretary  of the
     Company, or to such other address as either party may have furnished to the
     other in writing in  accordance  herewith,  except that notice of change of
     address shall be effective only upon receipt.

9.   Miscellaneous

     No provision of this Agreement may be modified, waived or discharged unless
     such waiver,  modification  or discharge is agreed to in writing  signed by
     you and such  officer  as may be  specifically  designated  by the Board of
     Directors of the  Company.  No waiver by either party hereto at any time of
     any breach by the other party hereto of, or compliance  with, any condition
     or provision of this Agreement to be performed by such other party shall be
     deemed a waiver of similar or  dissimilar  provisions  or conditions at the
     same or at any prior or subsequent time. No agreements or  representations,
     oral or otherwise, expressed or implied, with respect to the subject matter
     hereof have been made by either party which are not  expressly set forth in
     this Agreement;  provided, however, that this Agreement shall not supersede
     or in any way limit the rights,  duties or  obligations  you may have under
     any other written agreement with the Company. The validity, interpretation,
     construction  and  performance of this  Agreement  shall be governed by the
     laws of the State of New Jersey.

10.  Validity

     The invalidity or unenforceability of any provision of this Agreement shall
     not affect the validity or  enforceability  of any other  provision of this
     Agreement, which shall remain in full force and effect.

11.  Tax Withholding

     The Company may withhold from any amounts payable under this Agreement such
     federal,  state or local taxes as shall be required to be withheld pursuant
     to any applicable law or regulation.

12.  Counterparts

     This Agreement may be executed in one or more  counterparts,  each of which
     shall be deemed to be an original but all of which together will constitute
     one and the same instrument.



<PAGE>


13.  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.

If this letter  correctly sets forth our agreement on the subject matter hereof,
kindly  sign and return to the Company the  enclosed  copy of this letter  which
will then constitute our agreement on this subject.

                                 Sincerely,

                                 THE COMPANY

                        By  /s/Anthony D. Andora 
                            ---------------------
                             Name:  Anthony D. Andora
                             Title: Chairman of the Board


Agreed to this 8 day of June, 1995.

/s/Robert N. Harris
-------------------
Robert N. Harris
Executive Vice President
Chief Financial Officer

Attest by:  /s/Benjamin Rosenzweig
            ----------------------
            Benjamin Rosenzweig, Secretary

<PAGE>












May 22, 1995






Mr. Richard N. Latrenta
405 Tenafly Road
Englewood, NJ 07631

Dear Mr. Latrenta:

Interchange  Financial Services  Corporation,  a New Jersey Bank Holding Company
(the  "Company"),  considers the maintenance of a sound and vital executive team
to be essential to protecting  and  enhancing the best  interests of the Company
and its  stockholders.  In this  connection,  the  Company  recognizes  that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility,  and the uncertainty and questions which it may raise
among  management,  may result in the departure or  distraction of executives to
the  detriment of the Company and its  stockholders.  Accordingly,  the Board of
Directors of the Company (the "Board") has  determined  that  appropriate  steps
should  be  taken  to  reinforce  and  encourage  the  continued  attention  and
dedication of members of the Company's executive team.

This letter agreement sets forth the severance benefits which the Company agrees
will be  provided  to you in the  event  your  employment  with the  Company  is
terminated  subsequent  to a "change in control of the  Company"  (as defined in
Section 2 hereof) under the circumstances described below.


<PAGE>


1.   Company's Right to Terminate

     During the term of this Agreement,  you agree that you will not voluntarily
     leave the employ of the Company except as may be permitted  hereunder,  and
     will  continue to perform your regular  duties as Senior Vice  President of
     the Company.  Notwithstanding the foregoing, the Company may terminate your
     employment  at any time,  subject to  providing  the  benefits  hereinafter
     specified in accordance with the terms hereof.

2.   Change in Control

     No  benefits  shall be payable  hereunder  unless  there  shall have been a
     change in control of the Company,  as set forth below,  and your employment
     by the Company shall  thereafter  have been  terminated in accordance  with
     Section 3 below.  For purposes of this  Agreement,  a "change in control of
     the Company"  shall mean,  unless the Board  otherwise  directs  resolution
     approved by unanimous vote of the entire  membership  thereof adopted prior
     thereto,  a change in control  of a nature  that  would be  required  to be
     reported  in  response  to Item  5(f) of  Schedule  14A of  Regulation  14A
     promulgated  under  the  Securities   Exchange  Act  of  1934,  as  amended
     ("Exchange  Act");  provided  that,  without  limitation,  such a change in
     control  shall be deemed to have occurred if (i) any "person" (as such 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 Company representing more than
     25% control of the combined voting power of the Company's then  outstanding
     securities; or (ii) during any period of two consecutive years, individuals
     who at the  beginning  of such  period  constitute  the Board cease for any
     reason to constitute at least a majority  thereof  unless the election,  or
     the  nomination  for election by the  Company's  stockholders,  of each new
     director was  approved by a vote of at least  two-thirds  of the  directors
     then still in office who were directors at the beginning of the period.

3.   Termination Following Change in Control

     If any of the events described in Section 2 hereof constituting a change in
     control of the Company  shall have  occurred,  you shall be entitled to the
     benefits provided in Section 4 hereof upon your subsequent termination,  so
     long as such  termination  occurs  within  two (2) years  after a change in
     control of the  Company,  unless  such  termination  is (A) because of your
     death or  Retirement,  (B) by the Company for Cause or Disability or (c) by
     you other than for Good Reason.

     (i)  Disability; Retirement

          (A)  Termination   by  the  Company  of  your   employment   based  on
               "Disability" shall mean termination  because of your absence from
               your  duties  with  the  Company  on a  full-time  basis  for 130
               consecutive  business days, as a result of your incapacity due to
               physical or mental illness,  unless within thirty (30) days after
               Notice of Termination (as hereinafter defined) is given following
               such   absence,   you  shall  have  returned  to  the  full  time
               performance of your duties; or

          (B)  Termination  by the  Company or you of your  employment  based on
               "Retirement" shall mean your voluntary  termination in accordance
               with the Company's retirement policy, including early retirement,
               generally applicable to its salaried employees.

     (ii) Cause

          Termination  by the  Company of your  employment  for Cause shall mean
          your termination on account of:

          (A)  Your willful  commission  of an act that causes or is  reasonably
               likely to cause substantial damage to the Company;

          (B)  Your  commission  of an act of fraud in the  performance  of your
               duties on behalf of the Company;

          (C)  Your  conviction  for  commission  of a  felony  or  other  crime
               punishable by confinement  for a period in excess of one (1) year
               in connection  with the  performance  of your duties on behalf of
               the Company; or

          (D)  The order of a federal or state bank regulatory agency or a court
               of  competent  jurisdiction  requiring  the  termination  of your
               employment.

     (iii) Good Reason

          Termination  by you of your  employment  for "Good  Reason" shall mean
          termination based on:

          (A)  Subsequent  to a change in control of the  Company,  and  without
               your express written consent, the assignment to you of any duties
               inconsistent with your positions,  duties,  responsibilities  and
               status with the Company immediately prior to a change in control,
               or a change in your reporting responsibilities, titles or offices
               as in effect  immediately  prior to a change in  control,  or any
               removal of you from or any failure to re-elect you to any of such
               positions,  except in  connection  with the  termination  of your
               employment for Cause,  Disability or Retirement or as a result of
               your death or by you other than for Good Reason;

          (B)  Subsequent to a change in control of the Company,  a reduction by
               the  Company in your base  salary as in effect on the date hereof
               or as the same may be increased from time to time;

          (C)  Subsequent  to a change in control of the  Company,  a failure by
               the  Company  to  continue  any  bonus  plans  in  which  you are
               presently entitled to participate (the "Bonus Plans") as the same
               may be modified from time to time but  substantially in the forms
               currently in effect,  or a failure by the Company to continue you
               as a participant in the Bonus Plans on at least the same basis as
               you presently participate in accordance with the Bonus Plans;

          (D)  Subsequent to a change in control of the Company and without your
               express written consent,  the Company's requiring you to be based
               anywhere  other than  within  thirty  (30) miles of your  present
               office  location,  except for  required  travel on the  Company's
               business to an extent substantially  consistent with your present
               business travel obligations;

          (E)  Subsequent  to change in control of the  Company,  the failure by
               the Company to  continue  in effect any  benefit or  compensation
               plan,  stock  ownership plan,  stock purchase plan,  stock option
               plan, life insurance plan, health-and-accident plan or disability
               plan in which  you are  participating  at the time of a change in
               control of the Company (or plans providing you with substantially
               similar benefits),  the taking of any action by the Company which
               would adversely affect your participation in or materially reduce
               your  benefits  under  any of such  plans or  deprive  you of any
               material  fringe benefit enjoyed by you at the time of the change
               in control, or the failure by the Company to provide you with the
               number of paid  vacation  days to which you are then  entitled in
               accordance with the company's normal vacation policy in effect on
               the date hereof;

          (F)  Subsequent to a change in control of the Company,  the failure by
               the Company to obtain the  assumption of the agreement to perform
               this  Agreement  by any  successor as  contemplated  in Section 6
               hereof; or

          (G)  Subsequent  to a change in control of the Company,  any purported
               termination of your employment which is not effected  pursuant to
               a Notice of Termination  satisfying the requirements of paragraph
               (iv) below (and, if applicable,  paragraph  (ii) above);  and for
               purposes of this Agreement,  no such purported  termination shall
               be effective.

     (iv) Notice  of  Termination  

          Any purported  termination by the Company pursuant to paragraph (i) or
          (ii) above or by you pursuant to subparagraph  (B) of paragraph (i) or
          paragraph  (iii)  above  shall be  communicated  by written  Notice of
          Termination to the other party hereto. For purposes of this Agreement,
          a "Notice of Termination" shall mean a 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 your employment under the provision
          so indicated.

     (v)  Date of Termination

          "Date of Termination"  shall mean (A) if your employment is terminated
          for Disability,  thirty (30) days after Notice of Termination is given
          (provided that you shall not have returned to the  performance of your
          duties on a full-time  basis during such thirty (30) day period),  (B)
          if your employment is terminated pursuant to paragraph (ii) above, the
          date  specified  in  the  Notice  of  Termination,  and  (C)  if  your
          employment  is terminated  for any other  reason,  the date on which a
          Notice of  Termination  is given;  provided that 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,  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 and final arbitration award or
          by a  final  judgment,  order  or  decree  of  a  court  of  competent
          jurisdiction  entered upon such arbitration  award (the time of appeal
          therefrom having expired and no appeal having been perfected).

4.   Certain Benefits Upon Termination

     If,  after a change in  control of the  Company  shall  have  occurred,  as
     defined  in  Section  2 above,  your  employment  by the  Company  shall be
     terminated  (A)  by  the  Company  other  than  for  Cause,  Disability  or
     Retirement or (B) by you for Good Reason, then you shall be entitled to the
     benefits  provided  below:  

     (i)  The Company  shall pay you your full base  salary  through the Date of
          Termination at the rate in effect at the time Notice of Termination is
          given  plus  credit  for any  vacation  earned  but not  taken and the
          amount, if any, of any bonus for a past fiscal year and the portion of
          the current  fiscal year ending on the Date of  Termination  which has
          not yet been awarded or paid to you under the Bonus Plans;

     (ii) In lieu of any further salary  payments to you for periods  subsequent
          to the Date of Termination,  the Company shall pay as severance pay to
          you on the  fifth day  following  the Date of  Termination  a lump sum
          amount  equal to two (2) times your  annual base salary at the highest
          rate in effect during the twelve (12) months immediately preceding the
          Date of Termination;

     (iii)The  Company  shall  also  pay to you  all  legal  fees  and  expenses
          incurred by you as a result of such  termination  (including  all such
          fees and  expenses,  if any,  incurred in  contesting or disputing any
          such  termination  or in  seeking  to obtain or  enforce  any right or
          benefit provided by this Agreement);

     (iv) The  Company  shall  maintain  in full  force  and  effect,  for  your
          continued  benefit  until the  earlier of (A) two (2) years  after the
          Date of Termination or (B) your  commencement  of full time employment
          with a new employer, all life insurance, medical, health and accident,
          and  disability  plans,  programs  or  arrangements  in which you were
          entitled to participate  immediately prior to the Date of Termination,
          provided  that your  continued  participation  is  possible  under the
          general terms and provisions of such plans and programs.  In the event
          that your  participation  in any such plan or program  is barred,  the
          Company  shall  arrange to  provide  you with  benefits  substantially
          similar to those which you are  entitled  to receive  under such plans
          and programs. In addition, the Company shall pay you a lump sum amount
          of equivalent  actuarial  value to the additional  pension benefit you
          would have earned under the Company's Pension Plan as in effect on the
          date the change of  control  occurs,  but  disregarding  any  Internal
          Revenue Code  limitations  pertaining to qualified  plans, if you were
          granted  at the  time  of  your  termination  of  employment  two  (2)
          additional  years of  Credited  Service and deemed 2 years older under
          the  Plan.  In  determining  the  equivalent  actuarial  value  of the
          additional  pension  granted under this Section 4, an interest rate of
          5% and the mortality  table under the Company's  Pension Plan shall be
          used to determine the lump sum amount.

          You  shall not be  required  to  mitigate  the  amount of any  payment
          provided  for  in  this  Section  4 by  seeking  other  employment  or
          otherwise,  nor shall the amount of any payment  provided  for in this
          Section 4 be reduced by any  compensation  earned by you as the result
          of employment by another  employer  after the Date of  Termination  or
          otherwise.

5.   Certain Further Payments by the Corporation

     In the event that any amount or benefit paid or distributed to you pursuant
     to this  Agreement,  taken with any amounts or benefits  otherwise  paid or
     distributed to you by the Company or any affiliated  company  (collectively
     the  "Covered  Payments"),  are or become  subject to the tax (the  "Excise
     Tax")  imposed  under  Section 4999 of the Code or any similar tax that may
     hereafter be imposed,  the Company  shall pay to you at the time  specified
     below an additional amount (the "Tax Reimbursement  Payment") such that the
     net amount  retained by you with  respect to such Covered  Payments,  after
     deduction of any Excise Tax on the Covered Payments and any Federal,  state
     and  local  income  tax and  Excise  Tax on the Tax  Reimbursement  Payment
     provided for by this Section 5, but before deduction for any Federal, state
     or local income or employment  tax  withholding  on such Covered  Payments,
     shall be equal to the amount of the Covered  Payments.  

     (i)  For purposes of determining  whether any of the Covered  Payments will
          be subject to the Excise Tax and the amount of such Excise Tax,

          (A)  Such Covered  Payments  will be treated as  "parachute  payments"
               within  the  meaning  of  Section  280G  of  the  Code,  and  all
               "parachute  payments" in excess of the "base  amount" (as defined
               under Section 280G(b)(3) of the Code) shall be treated as subject
               to the Excise Tax, unless,  and except to the extent that, in the
               opinion of the Company's independent certified public accountants
               appointed  prior to the date the Change of Control  occurs or tax
               counsel selected by such accountants  (the  "Accountants"),  such
               Covered  Payments (in whole or in part) either do not  constitute
               parachute  payments  or  represent  reasonable  compensation  for
               services   actually  rendered  (within  the  meaning  of  Section
               280G(b)(4) of the Code) in excess of the "base  amount",  or such
               parachute  payments are otherwise not subject to such Excise Tax,
               and

          (B)  The value of any  non-cash  benefits or any  deferred  payment or
               benefit shall be determined by the Accountants in accordance with
               the principles of Section 280G of the Code.

     (ii) For  purposes  of  determining  the  amount  of the Tax  Reimbursement
          Payment,  you shall be deemed to pay: 

          (A)  Federal income taxes at the highest  applicable  marginal rate of
               Federal  income  taxation for the calendar  year in which the Tax
               Reimbursement Payment is to be made, and

          (B)  Any  applicable  state  and  local  income  taxes at the  highest
               applicable  marginal  rate of taxation for the  calendar  year in
               which the Tax  Reimbursement  Payment  is to be made,  net of the
               maximum reduction in Federal income taxes which could be obtained
               from the  deduction  of such state or local taxes if paid in such
               year.

     (iii)In the event that the Excise Tax is subsequently determined to be less
          than the amount taken into account  hereunder in  calculating  the Tax
          Reimbursement  Payment  made,  you shall repay to the Company,  at the
          time that the  amount of such  reduction  in the Excise Tax is finally
          determined,  the portion of such prior Tax Reimbursement  Payment that
          would  not have  been  paid if such  Excise  Tax had been  applied  in
          initially calculating such Tax Reimbursement Payment, plus interest on
          the  amount  of  such  repayment  at  the  rate  provided  in  Section
          1274(b)(2)(B) of the Code.

          In the event  that the Excise  Tax is later  determined  to exceed the
          amount taken into account  hereunder at the time the Tax Reimbursement
          Payment  is made  (including,  but not  limited  to,  by reason of any
          payment the  existence or amount of which cannot be  determined at the
          time of the Tax  Reimbursement  Payment),  the  Company  shall make an
          additional Tax  Reimbursement  Payment in respect of such excess (plus
          any  interest or penalty  payment  with respect to such excess) at the
          time that the amount of such excess is finally determined.

     (iv) The Tax  Reimbursement  Payment (or portion  thereof)  provided for in
          this  Section 5 shall be paid to you not later than ten (10)  business
          days following the payment of the Covered Payments; provided, however,
          that if the  amount  of such Tax  Reimbursement  Payment  (or  portion
          thereof)  cannot be finally  determined on or before the date on which
          payment is due,  the  Company  shall pay to you by such date an amount
          estimated in good faith by the Accountants to be the minimum amount of
          such Tax Reimbursement Payment and shall pay the remainder of such Tax
          Reimbursement  Payment (together with interest at the rate provided in
          Section  1274(b)(2)(B)  of the Code) as soon as the amount thereof can
          be  determined,  but in no event  later  than 45  calendar  days after
          payment of the related Covered  Payment.  In the event that the amount
          of  the  estimated  Tax  Reimbursement   Payment  exceeds  the  amount
          subsequently determined to have been due, such excess shall constitute
          a loan by the  Corporation  to you,  payable on the fifth business day
          after  written  demand  by the  Company  for  payment  (together  with
          interest at the rate provided in Section 1274(b)(2)(B) of the Code).

6.   Term of Agreement

     This Agreement  shall continue in effect so long as you are employed by the
     Company provided that, if a change of control of the Company, as defined in
     Section 2 hereof,  shall have occurred  during the term of this  Agreement,
     this  Agreement  shall  continue in effect for a period of thirty-six  (36)
     months beyond the month in which such change in control occurred.

7.   Successor; Binding Agreement

     (i)  The Company will require any successor (whether direct or indirect, by
          purchase, merger,  consolidation or otherwise) to all or substantially
          all of the business and/or assets of the Company, by agreement in form
          and substance  satisfactory  to you, to expressly  assume and agree to
          perform this  Agreement in the same manner and to the same extent that
          the Company would be required to perform it if no such  succession had
          taken place.  Failure of the Company to obtain such agreement prior to
          the  effectiveness  of any such  succession  shall be a breach of this
          Agreement  and shall entitle you to  compensation  from the Company in
          the same  amount  and on the  same  terms  as you  would  be  entitled
          hereunder if you terminated  your  employment for Good Reason,  except
          that for purposes of implementing the foregoing, the date on which any
          such  succession  becomes  effective  shall  be  deemed  the  Date  of
          Termination.  As used in this  Agreement,  "Company"  shall  mean  the
          Company as  hereinbefore  defined and any  successor  to its  business
          and/or assets as aforesaid  which  executes and delivers the agreement
          provided for in this Section 7 or which otherwise becomes bound by all
          the terms and provisions of this Agreement by operation of law.

     (ii) This  Agreement  shall inure to the benefit of and be  enforceable  by
          your  personal or legal  representatives,  executors,  administrators,
          successors, heirs, distributees,  devisees and legatees. If you should
          die while any amount  would still be payable to you  hereunder  if you
          had continued to live,  all such amounts,  unless  otherwise  provided
          herein,  shall be paid in accordance  with the terms of this Agreement
          to your  devisee,  legatee or other  designee  or, if there be no such
          designee, to your estate.

8.   Notice

     For the purpose of this  Agreement,  notices  and all other  communications
     provided for in this  Agreement  shall be in writing and shall be deemed to
     have been duly given when  delivered or mailed by  certified or  registered
     mail,  return  receipt  requested,   postage  prepaid,   addressed  to  the
     respective  addresses  set  forth  on the  first  page of  this  Agreement,
     provided that all notices to the Company shall be directed to the attention
     of the  President  of the  Company  with a  copy  to the  Secretary  of the
     Company, or to such other address as either party may have furnished to the
     other in writing in  accordance  herewith,  except that notice of change of
     address shall be effective only upon receipt.

9.   Miscellaneous

     No provision of this Agreement may be modified, waived or discharged unless
     such waiver,  modification  or discharge is agreed to in writing  signed by
     you and such  officer  as may be  specifically  designated  by the Board of
     Directors of the  Company.  No waiver by either party hereto at any time of
     any breach by the other party hereto of, or compliance  with, any condition
     or provision of this Agreement to be performed by such other party shall be
     deemed a waiver of similar or  dissimilar  provisions  or conditions at the
     same or at any prior or subsequent time. No agreements or  representations,
     oral or otherwise, expressed or implied, with respect to the subject matter
     hereof have been made by either party which are not  expressly set forth in
     this Agreement;  provided, however, that this Agreement shall not supersede
     or in any way limit the rights,  duties or  obligations  you may have under
     any other written agreement with the Company. The validity, interpretation,
     construction  and  performance of this  Agreement  shall be governed by the
     laws of the State of New Jersey.

10.  Validity

     The invalidity or unenforceability of any provision of this Agreement shall
     not affect the validity or  enforceability  of any other  provision of this
     Agreement, which shall remain in full force and effect.

11.  Tax Withholding

     The Company may withhold from any amounts payable under this Agreement such
     federal,  state or local taxes as shall be required to be withheld pursuant
     to any applicable law or regulation.

12.  Counterparts

     This Agreement may be executed in one or more  counterparts,  each of which
     shall be deemed to be an original but all of which together will constitute
     one and the same instrument.



<PAGE>


13.  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.

If this letter  correctly sets forth our agreement on the subject matter hereof,
kindly  sign and return to the Company the  enclosed  copy of this letter  which
will then constitute our agreement on this subject.

                                   Sincerely,

                                  THE COMPANY
                            By /s/Anthony D. Andora
                               -------------------
                          Name: Anthony D. Andora
                         Title: Chairman of the Board

Agreed to this 8 day of June, 1995.

/s/Richard N. Latrenta
----------------------
Richard N. Latrenta, Sr. Vice President
Sr. Loan Office

Attest by:  /s/Benjamin Rosenzweig
           -----------------------
           Benjamin Rosenzweig, Secretary
<PAGE>













May 22, 1995





Mr. Frank R. Giancola
18 Franciscan Way
Fair Lawn, NJ 07410

Dear Mr. Giancola:

Interchange  Financial Services  Corporation,  a New Jersey Bank Holding Company
(the  "Company"),  considers the maintenance of a sound and vital executive team
to be essential to protecting  and  enhancing the best  interests of the Company
and its  stockholders.  In this  connection,  the  Company  recognizes  that the
possibility of a change in control presently exists and may exist in the future,
and that such possibility,  and the uncertainty and questions which it may raise
among  management,  may result in the departure or  distraction of executives to
the  detriment of the Company and its  stockholders.  Accordingly,  the Board of
Directors of the Company (the "Board") has  determined  that  appropriate  steps
should  be  taken  to  reinforce  and  encourage  the  continued  attention  and
dedication of members of the Company's executive team.

This letter agreement sets forth the severance benefits which the Company agrees
will be  provided  to you in the  event  your  employment  with the  Company  is
terminated  subsequent  to a "change in control of the  Company"  (as defined in
Section 2 hereof) under the circumstances described below.


<PAGE>


1.   Company's Right to Terminate

     During the term of this Agreement,  you agree that you will not voluntarily
     leave the employ of the Company except as may be permitted  hereunder,  and
     will  continue to perform your regular  duties as Senior Vice  President of
     the Company.  Notwithstanding the foregoing, the Company may terminate your
     employment  at any time,  subject to  providing  the  benefits  hereinafter
     specified in accordance with the terms hereof.

2.   Change in Control

     No  benefits  shall be payable  hereunder  unless  there  shall have been a
     change in control of the Company,  as set forth below,  and your employment
     by the Company shall  thereafter  have been  terminated in accordance  with
     Section 3 below.  For purposes of this  Agreement,  a "change in control of
     the Company"  shall mean,  unless the Board  otherwise  directs  resolution
     approved by unanimous vote of the entire  membership  thereof adopted prior
     thereto,  a change in control  of a nature  that  would be  required  to be
     reported  in  response  to Item  5(f) of  Schedule  14A of  Regulation  14A
     promulgated  under  the  Securities   Exchange  Act  of  1934,  as  amended
     ("Exchange  Act");  provided  that,  without  limitation,  such a change in
     control  shall be deemed to have occurred if (i) any "person" (as such 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 Company representing more than
     25% control of the combined voting power of the Company's then  outstanding
     securities; or (ii) during any period of two consecutive years, individuals
     who at the  beginning  of such  period  constitute  the Board cease for any
     reason to constitute at least a majority  thereof  unless the election,  or
     the  nomination  for election by the  Company's  stockholders,  of each new
     director was  approved by a vote of at least  two-thirds  of the  directors
     then still in office who were directors at the beginning of the period.

3.   Termination Following Change in Control

     If any of the events described in Section 2 hereof constituting a change in
     control of the Company  shall have  occurred,  you shall be entitled to the
     benefits provided in Section 4 hereof upon your subsequent termination,  so
     long as such  termination  occurs  within  two (2) years  after a change in
     control of the  Company,  unless  such  termination  is (A) because of your
     death or  Retirement,  (B) by the Company for Cause or Disability or (c) by
     you other than for Good Reason.

     (i)  Disability; Retirement

          (A)  Termination   by  the  Company  of  your   employment   based  on
               "Disability" shall mean termination  because of your absence from
               your  duties  with  the  Company  on a  full-time  basis  for 130
               consecutive  business days, as a result of your incapacity due to
               physical or mental illness,  unless within thirty (30) days after
               Notice of Termination (as hereinafter defined) is given following
               such   absence,   you  shall  have  returned  to  the  full  time
               performance of your duties; or

          (B)  Termination  by the  Company or you of your  employment  based on
               "Retirement" shall mean your voluntary  termination in accordance
               with the Company's retirement policy, including early retirement,
               generally applicable to its salaried employees.

     (ii) Cause

          Termination  by the  Company of your  employment  for Cause shall mean
          your termination on account of: 

          (A)  Your willful  commission  of an act that causes or is  reasonably
               likely to cause substantial damage to the Company;

          (B)  Your  commission  of an act of fraud in the  performance  of your
               duties on behalf of the Company;

          (C)  Your  conviction  for  commission  of a  felony  or  other  crime
               punishable by confinement  for a period in excess of one (1) year
               in connection  with the  performance  of your duties on behalf of
               the Company; or

          (D)  The order of a federal or state bank regulatory agency or a court
               of  competent  jurisdiction  requiring  the  termination  of your
               employment.

     (iii) Good Reason

          Termination  by you of your  employment  for "Good  Reason" shall mean
          termination based on:

          (A)  Subsequent  to a change in control of the  Company,  and  without
               your express written consent, the assignment to you of any duties
               inconsistent with your positions,  duties,  responsibilities  and
               status with the Company immediately prior to a change in control,
               or a change in your reporting responsibilities, titles or offices
               as in effect  immediately  prior to a change in  control,  or any
               removal of you from or any failure to re-elect you to any of such
               positions,  except in  connection  with the  termination  of your
               employment for Cause,  Disability or Retirement or as a result of
               your death or by you other than for Good Reason;

          (B)  Subsequent to a change in control of the Company,  a reduction by
               the  Company in your base  salary as in effect on the date hereof
               or as the same may be increased from time to time;

          (C)  Subsequent  to a change in control of the  Company,  a failure by
               the  Company  to  continue  any  bonus  plans  in  which  you are
               presently entitled to participate (the "Bonus Plans") as the same
               may be modified from time to time but  substantially in the forms
               currently in effect,  or a failure by the Company to continue you
               as a participant in the Bonus Plans on at least the same basis as
               you presently participate in accordance with the Bonus Plans;

          (D)  Subsequent to a change in control of the Company and without your
               express written consent,  the Company's requiring you to be based
               anywhere  other than  within  thirty  (30) miles of your  present
               office  location,  except for  required  travel on the  Company's
               business to an extent substantially  consistent with your present
               business travel obligations;

          (E)  Subsequent  to change in control of the  Company,  the failure by
               the Company to  continue  in effect any  benefit or  compensation
               plan,  stock  ownership plan,  stock purchase plan,  stock option
               plan, life insurance plan, health-and-accident plan or disability
               plan in which  you are  participating  at the time of a change in
               control of the Company (or plans providing you with substantially
               similar benefits),  the taking of any action by the Company which
               would adversely affect your participation in or materially reduce
               your  benefits  under  any of such  plans or  deprive  you of any
               material  fringe benefit enjoyed by you at the time of the change
               in control, or the failure by the Company to provide you with the
               number of paid  vacation  days to which you are then  entitled in
               accordance with the company's normal vacation policy in effect on
               the date hereof;

          (F)  Subsequent to a change in control of the Company,  the failure by
               the Company to obtain the  assumption of the agreement to perform
               this  Agreement  by any  successor as  contemplated  in Section 6
               hereof; or

          (G)  Subsequent  to a change in control of the Company,  any purported
               termination of your employment which is not effected  pursuant to
               a Notice of Termination  satisfying the requirements of paragraph
               (iv) below (and, if applicable,  paragraph  (ii) above);  and for
               purposes of this Agreement,  no such purported  termination shall
               be effective.

     (iv) Notice of Termination

          Any purported  termination by the Company pursuant to paragraph (i) or
          (ii) above or by you pursuant to subparagraph  (B) of paragraph (i) or
          paragraph  (iii)  above  shall be  communicated  by written  Notice of
          Termination to the other party hereto. For purposes of this Agreement,
          a "Notice of Termination" shall mean a 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 your employment under the provision
          so indicated.

     (v)  Date of Termination

          "Date of Termination"  shall mean (A) if your employment is terminated
          for Disability,  thirty (30) days after Notice of Termination is given
          (provided that you shall not have returned to the  performance of your
          duties on a full-time  basis during such thirty (30) day period),  (B)
          if your employment is terminated pursuant to paragraph (ii) above, the
          date  specified  in  the  Notice  of  Termination,  and  (C)  if  your
          employment  is terminated  for any other  reason,  the date on which a
          Notice of  Termination  is given;  provided that 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,  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 and final arbitration award or
          by a  final  judgment,  order  or  decree  of  a  court  of  competent
          jurisdiction  entered upon such arbitration  award (the time of appeal
          therefrom having expired and no appeal having been perfected).

4.   Certain Benefits Upon Termination

     If,  after a change in  control of the  Company  shall  have  occurred,  as
     defined  in  Section  2 above,  your  employment  by the  Company  shall be
     terminated  (A)  by  the  Company  other  than  for  Cause,  Disability  or
     Retirement or (B) by you for Good Reason, then you shall be entitled to the
     benefits  provided  below:  

     (i)  The Company  shall pay you your full base  salary  through the Date of
          Termination at the rate in effect at the time Notice of Termination is
          given  plus  credit  for any  vacation  earned  but not  taken and the
          amount, if any, of any bonus for a past fiscal year and the portion of
          the current  fiscal year ending on the Date of  Termination  which has
          not yet been awarded or paid to you under the Bonus Plans;

     (ii) In lieu of any further salary  payments to you for periods  subsequent
          to the Date of Termination,  the Company shall pay as severance pay to
          you on the  fifth day  following  the Date of  Termination  a lump sum
          amount  equal to two (2) times your  annual base salary at the highest
          rate in effect during the twelve (12) months immediately preceding the
          Date of Termination;

     (iii)The  Company  shall  also  pay to you  all  legal  fees  and  expenses
          incurred by you as a result of such  termination  (including  all such
          fees and  expenses,  if any,  incurred in  contesting or disputing any
          such  termination  or in  seeking  to obtain or  enforce  any right or
          benefit provided by this Agreement);

     (iv) The  Company  shall  maintain  in full  force  and  effect,  for  your
          continued  benefit  until the  earlier of (A) two (2) years  after the
          Date of Termination or (B) your  commencement  of full time employment
          with a new employer, all life insurance, medical, health and accident,
          and  disability  plans,  programs  or  arrangements  in which you were
          entitled to participate  immediately prior to the Date of Termination,
          provided  that your  continued  participation  is  possible  under the
          general terms and provisions of such plans and programs.  In the event
          that your  participation  in any such plan or program  is barred,  the
          Company  shall  arrange to  provide  you with  benefits  substantially
          similar to those which you are  entitled  to receive  under such plans
          and programs. In addition, the Company shall pay you a lump sum amount
          of equivalent  actuarial  value to the additional  pension benefit you
          would have earned under the Company's Pension Plan as in effect on the
          date the change of  control  occurs,  but  disregarding  any  Internal
          Revenue Code  limitations  pertaining to qualified  plans, if you were
          granted  at the  time  of  your  termination  of  employment  two  (2)
          additional  years of  Credited  Service and deemed 2 years older under
          the  Plan.  In  determining  the  equivalent  actuarial  value  of the
          additional  pension  granted under this Section 4, an interest rate of
          5% and the mortality  table under the Company's  Pension Plan shall be
          used to determine the lump sum amount.

          You  shall not be  required  to  mitigate  the  amount of any  payment
          provided  for  in  this  Section  4 by  seeking  other  employment  or
          otherwise,  nor shall the amount of any payment  provided  for in this
          Section 4 be reduced by any  compensation  earned by you as the result
          of employment by another  employer  after the Date of  Termination  or
          otherwise.

5.   Certain Further Payments by the Corporation

     In the event that any amount or benefit paid or distributed to you pursuant
     to this  Agreement,  taken with any amounts or benefits  otherwise  paid or
     distributed to you by the Company or any affiliated  company  (collectively
     the  "Covered  Payments"),  are or become  subject to the tax (the  "Excise
     Tax")  imposed  under  Section 4999 of the Code or any similar tax that may
     hereafter be imposed,  the Company  shall pay to you at the time  specified
     below an additional amount (the "Tax Reimbursement  Payment") such that the
     net amount  retained by you with  respect to such Covered  Payments,  after
     deduction of any Excise Tax on the Covered Payments and any Federal,  state
     and  local  income  tax and  Excise  Tax on the Tax  Reimbursement  Payment
     provided for by this Section 5, but before deduction for any Federal, state
     or local income or employment  tax  withholding  on such Covered  Payments,
     shall be equal to the amount of the Covered  Payments.  

     (i)  For purposes of determining  whether any of the Covered  Payments will
          be subject to the Excise Tax and the amount of such Excise Tax,

          (A)  Such Covered  Payments  will be treated as  "parachute  payments"
               within  the  meaning  of  Section  280G  of  the  Code,  and  all
               "parachute  payments" in excess of the "base  amount" (as defined
               under Section 280G(b)(3) of the Code) shall be treated as subject
               to the Excise Tax, unless,  and except to the extent that, in the
               opinion of the Company's independent certified public accountants
               appointed  prior to the date the Change of Control  occurs or tax
               counsel selected by such accountants  (the  "Accountants"),  such
               Covered  Payments (in whole or in part) either do not  constitute
               parachute  payments  or  represent  reasonable  compensation  for
               services   actually  rendered  (within  the  meaning  of  Section
               280G(b)(4) of the Code) in excess of the "base  amount",  or such
               parachute  payments are otherwise not subject to such Excise Tax,
               and

          (B)  The value of any  non-cash  benefits or any  deferred  payment or
               benefit shall be determined by the Accountants in accordance with
               the principles of Section 280G of the Code.

     (ii) For  purposes  of  determining  the  amount  of the Tax  Reimbursement
          Payment,  you shall be deemed to pay: 

          (A)  Federal income taxes at the highest  applicable  marginal rate of
               Federal  income  taxation for the calendar  year in which the Tax
               Reimbursement Payment is to be made, and

          (B)  Any  applicable  state  and  local  income  taxes at the  highest
               applicable  marginal  rate of taxation for the  calendar  year in
               which the Tax  Reimbursement  Payment  is to be made,  net of the
               maximum reduction in Federal income taxes which could be obtained
               from the  deduction  of such state or local taxes if paid in such
               year.

     (iii)In the event that the Excise Tax is subsequently determined to be less
          than the amount taken into account  hereunder in  calculating  the Tax
          Reimbursement  Payment  made,  you shall repay to the Company,  at the
          time that the  amount of such  reduction  in the Excise Tax is finally
          determined,  the portion of such prior Tax Reimbursement  Payment that
          would  not have  been  paid if such  Excise  Tax had been  applied  in
          initially calculating such Tax Reimbursement Payment, plus interest on
          the  amount  of  such  repayment  at  the  rate  provided  in  Section
          1274(b)(2)(B) of the Code.

          In the event  that the Excise  Tax is later  determined  to exceed the
          amount taken into account  hereunder at the time the Tax Reimbursement
          Payment  is made  (including,  but not  limited  to,  by reason of any
          payment the  existence or amount of which cannot be  determined at the
          time of the Tax  Reimbursement  Payment),  the  Company  shall make an
          additional Tax  Reimbursement  Payment in respect of such excess (plus
          any  interest or penalty  payment  with respect to such excess) at the
          time that the amount of such excess is finally determined.

     (iv) The Tax  Reimbursement  Payment (or portion  thereof)  provided for in
          this  Section 5 shall be paid to you not later than ten (10)  business
          days following the payment of the Covered Payments; provided, however,
          that if the  amount  of such Tax  Reimbursement  Payment  (or  portion
          thereof)  cannot be finally  determined on or before the date on which
          payment is due,  the  Company  shall pay to you by such date an amount
          estimated in good faith by the Accountants to be the minimum amount of
          such Tax Reimbursement Payment and shall pay the remainder of such Tax
          Reimbursement  Payment (together with interest at the rate provided in
          Section  1274(b)(2)(B)  of the Code) as soon as the amount thereof can
          be  determined,  but in no event  later  than 45  calendar  days after
          payment of the related Covered  Payment.  In the event that the amount
          of  the  estimated  Tax  Reimbursement   Payment  exceeds  the  amount
          subsequently determined to have been due, such excess shall constitute
          a loan by the  Corporation  to you,  payable on the fifth business day
          after  written  demand  by the  Company  for  payment  (together  with
          interest at the rate provided in Section 1274(b)(2)(B) of the Code).

6.   Term of Agreement

     This Agreement  shall continue in effect so long as you are employed by the
     Company provided that, if a change of control of the Company, as defined in
     Section 2 hereof,  shall have occurred  during the term of this  Agreement,
     this  Agreement  shall  continue in effect for a period of thirty-six  (36)
     months beyond the month in which such change in control occurred.

7.   Successor; Binding Agreement

     (i)  The Company will require any successor (whether direct or indirect, by
          purchase, merger,  consolidation or otherwise) to all or substantially
          all of the business and/or assets of the Company, by agreement in form
          and substance  satisfactory  to you, to expressly  assume and agree to
          perform this  Agreement in the same manner and to the same extent that
          the Company would be required to perform it if no such  succession had
          taken place.  Failure of the Company to obtain such agreement prior to
          the  effectiveness  of any such  succession  shall be a breach of this
          Agreement  and shall entitle you to  compensation  from the Company in
          the same  amount  and on the  same  terms  as you  would  be  entitled
          hereunder if you terminated  your  employment for Good Reason,  except
          that for purposes of implementing the foregoing, the date on which any
          such  succession  becomes  effective  shall  be  deemed  the  Date  of
          Termination.  As used in this  Agreement,  "Company"  shall  mean  the
          Company as  hereinbefore  defined and any  successor  to its  business
          and/or assets as aforesaid  which  executes and delivers the agreement
          provided for in this Section 7 or which otherwise becomes bound by all
          the terms and provisions of this Agreement by operation of law.

     (ii) This  Agreement  shall inure to the benefit of and be  enforceable  by
          your  personal or legal  representatives,  executors,  administrators,
          successors, heirs, distributees,  devisees and legatees. If you should
          die while any amount  would still be payable to you  hereunder  if you
          had continued to live,  all such amounts,  unless  otherwise  provided
          herein,  shall be paid in accordance  with the terms of this Agreement
          to your  devisee,  legatee or other  designee  or, if there be no such
          designee, to your estate.

8.   Notice

     For the purpose of this  Agreement,  notices  and all other  communications
     provided for in this  Agreement  shall be in writing and shall be deemed to
     have been duly given when  delivered or mailed by  certified or  registered
     mail,  return  receipt  requested,   postage  prepaid,   addressed  to  the
     respective  addresses  set  forth  on the  first  page of  this  Agreement,
     provided that all notices to the Company shall be directed to the attention
     of the  President  of the  Company  with a  copy  to the  Secretary  of the
     Company, or to such other address as either party may have furnished to the
     other in writing in  accordance  herewith,  except that notice of change of
     address shall be effective only upon receipt.

9.   Miscellaneous

     No provision of this Agreement may be modified, waived or discharged unless
     such waiver,  modification  or discharge is agreed to in writing  signed by
     you and such  officer  as may be  specifically  designated  by the Board of
     Directors of the  Company.  No waiver by either party hereto at any time of
     any breach by the other party hereto of, or compliance  with, any condition
     or provision of this Agreement to be performed by such other party shall be
     deemed a waiver of similar or  dissimilar  provisions  or conditions at the
     same or at any prior or subsequent time. No agreements or  representations,
     oral or otherwise, expressed or implied, with respect to the subject matter
     hereof have been made by either party which are not  expressly set forth in
     this Agreement;  provided, however, that this Agreement shall not supersede
     or in any way limit the rights,  duties or  obligations  you may have under
     any other written agreement with the Company. The validity, interpretation,
     construction  and  performance of this  Agreement  shall be governed by the
     laws of the State of New Jersey.

10.  Validity

     The invalidity or unenforceability of any provision of this Agreement shall
     not affect the validity or  enforceability  of any other  provision of this
     Agreement, which shall remain in full force and effect.

11.  Tax Withholding

     The Company may withhold from any amounts payable under this Agreement such
     federal,  state or local taxes as shall be required to be withheld pursuant
     to any applicable law or regulation.

12.  Counterparts

     This Agreement may be executed in one or more  counterparts,  each of which
     shall be deemed to be an original but all of which together will constitute
     one and the same instrument.



<PAGE>


13.  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.

If this letter  correctly sets forth our agreement on the subject matter hereof,
kindly  sign and return to the Company the  enclosed  copy of this letter  which
will then constitute our agreement on this subject.

                               Sincerely,
                              THE COMPANY

                         By /s/Anthony D. Andora
                            --------------------
                            Name:Anthony D. Andora
                            Title:Chairman of the Board


Agreed to this 2 day of June, 1995.

/s/Frank R. Giancola
----------------------------------
Frank R. Giancola, Sr. Vice President


Attest by:  /s/Benjamin Rosenzweig
            ----------------------
            Benjamin Rosenzweig, Secretary