TRI-COUNTY FEDERAL SAVINGS BANK OF WALDORF
                          RETIREMENT PLAN FOR DIRECTORS
                          -----------------------------


         The Board of Directors of  Tri-County  Federal  Savings Bank of Waldorf
has adopted this Retirement Plan for Directors, effective as of January 1, 1995.

                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

         "Agreement"  shall mean the Deferred  Compensation  Agreement  attached
hereto as Exhibit A.

         "Bank" shall mean Tri-County Federal Savings Bank of Waldorf.

         "Benefit  Percentage"  shall be  determined  based on the number of the
Participant's  full years of service  on the Board as a  non-employee  Director,
whether before or after the Effective Date, and shall be determined according to
the following schedule:

        Full Years of Service on the                    Participant's
      Board As a Non-Employee Director                Benefit Percentage
      --------------------------------                ------------------

                 Less than 5                                    0%
                   5 to 9                                  33-1/3%
                  10 to 14                                 66-2/3%
                 15 or More                                   100%

         "Benefits"  shall  mean,  collectively,   the  benefits  payable  under
Articles II, III, IV, and V of the Plan.

         "Board" shall mean the Board of Directors of the Bank.

         "Change in Control"  shall have the meaning set forth in Section  13(b)
of the  Company's  1986 Stock  Option and  Incentive  Plan,  as in effect on the
Effective  Date. The decision of the Board as to whether a change in control has
occurred shall be conclusive and binding on all parties interested therein.

         "Company" shall mean Tri-County Financial Corporation.

         "Deferral  Account"  shall have the meaning set forth in Section 5.2 of
Article V of the Plan.

         "Director" shall mean a member of the Board.

         "Disability"  shall mean a physical or mental  condition,  which in the
sole  and  absolute  discretion  of  Board,  is  reasonably  expected  to  be of
indefinite  duration and to substantially  prevent


                                       1
<PAGE>

a  Participant  from  fulfilling  his or her duties or  responsibilities  to the
Company or the Bank.

         "Effective Date" shall have the meaning set forth in Article XVIII.

         "Multiplier"  shall have the meaning  set forth in Section  2.13 of the
Bank's Executive Incentive Compensation Plan.

         "Participant"  means  anyone who is a Director  at any time on or after
the Effective Date (whether or not the Director is an Employee).

         "Plan"  shall  mean this  Tri-County  Federal  Savings  Bank of Waldorf
Retirement Plan for Directors.

         "Surviving  Spouse" means the husband or wife of a Director at the time
of the  Director's  death,  provided  they  are not  then  divorced  or  legally
separated.

         "Vested  Percentage"  shall be  determined  based on the  number of the
Participant's full years of service on the Board as a nonemployee Director after
the Effective Date, and shall be determined according to the following schedule:

           Full Years of Service as a Non-Employee               Participant's
           Member of the Board Post-Effective Date             Vested Percentage
           ---------------------------------------             -----------------

                         Less than 1                                33-1/3%
                              1                                     66-2/3%
                          2 or more                                    100%

Notwithstanding the foregoing,  a Participant's Vested Percentage shall increase
to 100% in the  event he or she  retires  from the Board  for any  reason  after
attaining age 70 or incurring a Disability, as determined by the Board.

                                   ARTICLE II

                               RETIREMENT BENEFITS
                               -------------------

         In the event that a Participant's  service on the Board  terminates for
any reason other than death or Disability, the Bank shall pay the Participant an
annual  benefit for ten (10) years in an amount  equal to the product of (i) the
Participant's Benefit Percentage,  (ii) the Participant's Vested Percentage, and
(iii)  $3,000.  The payments due under this Article shall begin on the first day
of the second  month  following  the date of the  Participant's  termination  of
service on the Board,  and shall  thereafter  be made on the annual  anniversary
dates of such  first  payment  date.  Except  as  provided  in  Article  IV,  no
retirement


                                       2
<PAGE>


benefits shall be payable hereunder after the death of the Participant.

         Notwithstanding  the foregoing,  but only to the extent  required under
federal banking law, the amount payable hereunder shall be reduced to the extent
that on the date of a  Participant's  termination of employment,  either (i) the
present value of his or her Benefits  exceeds the limitations that are set forth
in Regulatory Bulletin 27a of the Office of Thrift Supervision,  as in effect on
the Effective Date, or (ii) such reduction is necessary to avoid  subjecting the
Bank to liability  under  Section 280G of the Internal  Revenue Code of 1986, as
amended.

                                   ARTICLE III

                               DISABILITY BENEFITS
                               -------------------

         In the event that a Participant's  service on the Board  terminates due
to his Disability,  the Bank shall pay the Participant an annual payment for ten
years in an amount  equal to the product of his Benefit  Percentage  and $3,000.
The payments  due under this Article  shall begin on the first day of the second
month following the date of the Participant's  termination of service, and shall
thereafter be made on the annual  anniversary  dates of such first payment date.
Except as  provided  in  Article  IV, no  disability  benefits  shall be payable
hereunder after the death of the Participant.

                                   ARTICLE IV

                                 DEATH BENEFITS
                                 --------------

         In the event  that a  Participant  dies  before  collecting  any of the
Benefits  provided  under  Article  II  or  III,  the  Bank  shall  pay  to  the
Participant's  Surviving Spouse, or if none, to the Participant's estate, a lump
sum payment  having a present  value  equal to five (5) times the annual  amount
that the Participant would have received under Article II if the Participant had
both  terminated  service on the Board on the date of his death,  and then had a
Vested  Percentage  equal  to 100%.  On the  other  hand,  in the  event  that a
Participant dies after commencing to receive the Benefits provided under Article
II or III, the Bank shall pay to the Participant's Surviving Spouse, or if none,
to the Participant's  estate, a lump sum payment having a present value equal to
the payments that the  Participant  would have received if the  Participant  had
survived to collect all Benefits  that would have been paid under  Article II or
III, as the case may be, from the date of the  Participant's  death  through the
date on which the  Participant  would have  received  the fifth  annual  payment
otherwise  payable under Article II or III, as the case may be. In either event,
such payment of Benefits  shall be made on or before the first day of the second
month  following  the date of the



                                       3
<PAGE>

Participant's death. No Benefits shall be payable hereunder to anyone other than
a Surviving Spouse or the Participant's estate.

                                    ARTICLE V

                              DEFERRED COMPENSATION
                              ---------------------
         This Article of the Plan  establishes a deferred  compensation  program
for Participants,  subject to the terms and conditions provided in this Plan, in
the trust  associated  with the Plan (the "Trust"),  and in the  Agreement.  The
terms and conditions of the Trust and the Agreement are  incorporated  herein by
reference and made a part hereof to the extent not inconsistent herewith.

         5.1 The Bank  expects  (but  shall be under no legal  obligation)  on a
quarterly  basis to  contribute  to the Trust  the  aggregate  amounts  deferred
pursuant to  Agreements  with  Participants,  which funds would then be used for
eventual  payment to said  Participants  under the terms and  conditions of this
Article.

         5.2 In accordance  with this Article,  a Participant may elect to defer
all or any portion of the fees and/or salary  otherwise  payable to him from the
Bank, in cash,  for any calendar  year in which the Plan is in effect.  Deferred
amounts  shall be credited by the Bank at the end of each calendar  quarter,  in
accordance   with  the  terms  of  the  Agreements   entered  into  between  the
Participants  and the Bank.  The  funds so  credited  quarter-annually  shall be
credited by the Bank to a bookkeeping  account ("Deferral  Account") in the name
of  each  Participant  according  to the  terms  of the  Participant's  Deferred
Compensation Agreement.  In addition to the funds deferred  quarter-annually and
credited to the Deferral  Accounts of  Participants,  the Bank shall adjust each
Account  at the  end of each  calendar  year  (i) to  credit  the  Participant's
Deferral Account for the  appreciation or depreciation  that would have occurred
if the Deferral  Account had been invested in savings  accounts  having a return
equal to the highest interest rate which the Bank pays, on the effective date of
the  Participant's  election and as adjusted on each subsequent  January 1st, on
certificates  of deposit,  regardless of their term, and (ii) at the end of each
calendar year to credit to the Participant's  Deferral Account a deemed matching
contribution by the Bank in an amount equal to the product of the Multiplier for
the calendar  year,  and one and one-half  percent  (1.5%) of the  Participant's
aggregate fee deferrals for the calendar year.

         5.3 A Participant's  Deferral  Account shall be paid in accordance with
those  terms set forth in the  Agreement  which is  applicable  to the  deferred
amounts,  except that the  Participant's  Deferral  Account  will be paid to the
Participant  (or his  estate) in a lump sum as soon as  practicable  following a
Change in Control.  If a  Participant  should die before  receiving all deferred
compensation  benefits payable under this Article, then such


                                       4
<PAGE>

payment(s) shall be made to the beneficiary designated by the Participant in his
or  her  Agreement  (and  in the  absence  of a  validly  designated  or  living
beneficiary, to the Participant's estate).

         5.4 Agreements  made hereunder  shall be prospective  only and shall be
irrevocable with respect to amounts deferred  pursuant to the Agreement,  except
that a  Participant  may at any  time  and  from  time to time  (i)  change  the
beneficiary  designated  in  paragraph 3 of the  Agreement,  and/or (ii) file an
Agreement which  supersedes a prior Agreement as to amounts deferred on or after
the  January  1st  which  coincides  with  or  next  follows  execution  of  the
superseding Agreement. In addition, a Participant may at any time file a written
notice with the Bank pursuant to which the Participant ceases future accruals as
soon as practicable after the Bank receives such notice.

                                   ARTICLE VI

                           SOURCE AND FORM OF BENEFITS
                           ---------------------------

         Benefits shall constitute an unfunded, unsecured promise by the Bank to
provide such payments in the future,  as and to the extent such Benefits  become
payable.  Benefits  shall be paid from the  general  assets of the Bank,  and no
person  shall,  by virtue of this Plan,  have any interest in such assets (other
than as an  unsecured  creditor  of the  Bank).  In the  event  that a trust  is
established  as described  herein at Article IX, the trustee of such trust shall
inform the Board  annually prior to the  commencement  of each fiscal year as to
the manner in which such trust assets shall be invested.

                                   ARTICLE VII

                                   ASSIGNMENT
                                   ----------

         Except as  otherwise  provided  by this  Plan,  it is  agreed  that the
Participant  nor any other  person or persons  shall have any right to  commute,
sell,  assign,  transfer,  encumber and pledge or otherwise  convey the right to
receive  any  Benefits  hereunder,  which  Benefits  and the rights  thereto are
expressly declared to be nonassignable and nontransferable.

                                  ARTICLE VIII

                            NO RETENTION OF SERVICES
                   TERMINATION OR SUSPENSION UNDER FEDERAL LAW
                   -------------------------------------------

         The Benefits  payable under this Plan shall be  independent  of, and in
addition  to,  any  other  compensation  payable  by the Bank to a  Participant,
whether fees, bonus, retirement income under employee benefit plans sponsored or
maintained  by the  Company or


                                       5
<PAGE>

the Bank, or  otherwise.  This Plan shall not be deemed to constitute a contract
of employment between the Bank and any Participant.

         If the  Participant  is  removed  and/or  permanently  prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
Sections  8(e)(4) or 8(g)(1) of the Federal  Deposit  Insurance Act ("FDIA") (12
U.S.C.  1818(e)(4) or (g)(1)), all obligations of the Bank under this Plan shall
terminate,  as of the  effective  date of the order,  but  vested  rights of the
parties shall not be affected.

         If the Bank is in default (as defined in Section 3(x)(1) of FDIA),  all
obligations under this Plan shall terminate as of the date of default;  however,
this Paragraph shall not affect the vested rights of the parties.

         All obligations  under this Plan shall terminate,  except to the extent
that  continuation of this Plan is necessary for the continued  operation of the
Bank:  (i) by the  Director of the Office of Thrift  Supervision  ("Director  of
OTS"), or his or her designee,  at the time that the Federal  Deposit  Insurance
Corporation  ("FDIC")  or  the  Resolution  Trust  Corporation  enters  into  an
agreement to provide  assistance to or on behalf of the Bank under the authority
contained in Section  13(c) of FDIA;  or (ii) by the Director of the OTS, or his
or her  designee,  at the time  that  the  Director  of the  OTS,  or his or her
designee approves a supervisory  merger to resolve problems related to operation
of the Bank or when the Bank is  determined  by the Director of the OTS to be in
an unsafe or unsound  condition.  Such action shall not affect any vested rights
of the parties.

         If a notice  served  under  Section  8(e)(3)  or (g)(1) of the FDIA (12
U.S.C.   1818(e)(3)  or  (g)(1))  suspends  and/or  temporarily   prohibits  the
Participant from participating in the conduct of the Bank's affairs,  the Bank's
obligations  under this Plan shall be suspended as of the date of such  service,
unless  stayed by  appropriate  proceedings.  If the  charges  in the notice are
dismissed, the Bank may in its discretion (i) pay the Participant all or part of
the compensation  withheld while its contract  obligations  were suspended,  and
(ii)  reinstate  (in  whole  or in  part)  any of  its  obligations  which  were
suspended.

                                   ARTICLE IX

                             RIGHTS OF PARTICIPANTS
                             ----------------------

         The rights of the Participants under this Plan shall be solely those of
unsecured  creditors of the Bank. In the event that the Bank shall  establish an
irrevocable trust to be attached hereto  ("Trust"),  such assets of the Bank may
be held by such  trust


                                       6
<PAGE>


pursuant to such Trust,  subject to claims by general  creditors  of the Bank by
appropriate judicial action as provided by such Trust.

                                    ARTICLE X

                   AUTOMATIC CASH-OUT UPON A CHANGE IN CONTROL
                   -------------------------------------------

         The  provisions of this Article shall  supersede any provisions of this
Plan to the contrary. In the event of a Change in Control while a Participant is
serving on the Board, the Participant's Vested Percentage shall become 100%, and
the present  value of his Benefits  shall be due and payable to the  Participant
(or, in the event of his death, his designated  beneficiary or if no beneficiary
is living or  designated,  his estate) in one  lump-sum  payment  within 10 days
following  such Change in Control.  In the event of a Change in Control  after a
Participant  terminates  service on the Board, the present value of any Benefits
not yet paid to the Participant (or his designated beneficiary or his estate, in
the event of his  death)  shall be due and  payable to the  Participant  (or his
designated  beneficiary  or estate,  in the event of his death) in one  lump-sum
payment within 10 days following such Change in Control.

                                   ARTICLE XI

                                 REORGANIZATION
                                 --------------

         The Bank  agrees that it will not merge or  consolidate  into any other
corporation or organization,  or permit its business activities to be taken over
by any  other  organization,  unless  and  until the  succeeding  or  continuing
corporation  or  other  organization  shall  expressly  assume  the  rights  and
obligations  of the Bank herein set forth.  The Bank further agrees that it will
not cease its business  activities  or terminate  its  existence,  other than as
heretofore set forth in this paragraph,  without having made adequate  provision
for the fulfillment of its obligation hereunder.

                                   ARTICLE XII

                            AMENDMENT AND TERMINATION
                            -------------------------

         The Board may amend or terminate the Plan at any time, provided that no
such amendment or termination shall,  without the written consent of an affected
Participant, alter or impair any rights of the Participants under the Plan.

                                  ARTICLE XIII

                                    STATE LAW
                                    ---------

         This Plan shall be construed and governed in all respects  under and by
the laws of the State of Maryland.  If any  provision of this Plan shall be held
by a court  of  competent  jurisdiction  to


                                       7
<PAGE>

be invalid or unenforceable,  the remaining  provisions hereof shall continue to
be fully effective.

                                   ARTICLE XIV

                                    HEADINGS
                                    --------

         Headings and  subheadings in this Plan are inserted for convenience and
reference only and constitute no part of this Plan.

                                   ARTICLE XV

                                     GENDER
                                     ------

         This Plan shall be  construed,  where  required,  so that the masculine
gender includes the feminine.

                                   ARTICLE XVI

                           INTERPRETATION OF THE PLAN
                           --------------------------

         The  Board  shall  have sole and  absolute  discretion  to  administer,
construe,  and  interpret  the Plan,  and the  decisions  of the Board  shall be
conclusive  and binding on all  affected  parties  (unless  such  decisions  are
arbitrary and capricious).

                                  ARTICLE XVII

                                   LEGAL FEES
                                   ----------

         In the event any dispute shall arise between a Participant and the Bank
as to the terms or  interpretation  of this Plan,  whether  instituted by formal
legal  proceedings or otherwise,  including any action taken by a Participant to
enforce the terms of this Plan or in  defending  against any action taken by the
Bank,  the Bank shall  reimburse  the  Participant  for all costs and  expenses,
including reasonable attorneys' fees, arising from such dispute,  proceedings or
actions;  provided that the Participant shall return such amounts to the Bank if
he fails to obtain a final judgment by a court of competent  jurisdiction  (or a
settlement of such dispute, proceedings, or actions) substantially in his favor.
Such  reimbursements  to a  Participant  shall  be  paid  within  10 days of the
Participant  furnishing to the Bank written evidence,  which may be in the form,
among other things,  of a cancelled  check or receipt,  of any costs or expenses
incurred by the Participant. Any such request for reimbursement by a Participant
shall be made no more frequently than at 30 day intervals.


                                       8
<PAGE>


                                  ARTICLE XVIII

                                 EFFECTIVE DATE
                                 --------------

         The effective  date of this Plan shall be January 1, 1995 provided that
Article V shall become effective on the date the Board approves the Plan. Unless
terminated  earlier in  accordance  with Article XII,  this Plan shall remain in
effect  during the term of service of the  Participants  and until all  Benefits
payable hereunder have been made.


                                       9