**PERFORMANCE
      COMPENSATION PLAN OF CARVER BANCORP, INC.**


INCENTIVE
      AWARD
      AGREEMENT





-                          
                -*Name
                of Participant*
            
            
            
            *Social
                Security Number**Street
                Address**City*
            
            *State*
            
            *ZIP
                Code*





This
      Incentive Award Agreement (“Agreement”) is intended to set forth the terms and
      conditions on which a Incentive Award, consisting of certain cash payments,
      has
      been granted under the Performance Compensation Plan of Carver Bancorp, Inc.
      (“Plan”).  Set forth below are the specific terms and conditions
      applicable to this Incentive Award.  Attached as Exhibit A is a copy
      of the Plan.





**Incentive
                Award Terms**Grant
                Date:Amount
                of Incentive Award ($):Vesting
                Dates:*





**Subject
      to adjustment as provided in the Plan.  The Committee may, in its sole
      discretion,  accelerate the vesting of the Incentive
      Award.*





By
      signing where indicated below, Carver Bancorp, Inc. grants this Incentive Award
      upon the terms and conditions specified in this Agreement, and the Participant
      acknowledges receipt of this Agreement, including Exhibit A, and agrees to
      observe and be bound by the terms and conditions set forth herein.





**CARVER
                BANCORP, INC.**
            
            **PARTICIPANT**By:*Name:*
            
            *Name:**Title:*







**Instructions**:
      this page should be completed by or on behalf of the Committee.  Any
      blank space intentionally left blank should be crossed out.




1


EXHIBIT
      A




**PERFORMANCE
      COMPENSATION PLAN**




**OF**




**CARVER
      BANCORP, INC.**






**1.**
            **General
                Purpose of Plan.**




The
      purpose of the Performance Compensation Plan of Carver Bancorp, Inc. (the
“Plan”) is to promote the growth and profitability of Carver Bancorp, Inc., (the
      “Company”) and any of its respective Affiliates (collectively, the “Employer”)
      to provide certain key officers of the Employer with an incentive to achieve
      business objectives, and to attract and retain individuals of outstanding
      competence.




**2.**
            **Terms
                of the Plan**




Capitalized
      terms will be defined in the Carver Bancorp, Inc. 2006 Stock Incentive Plan,
      as
      in effect from time to time, (the “Stock Plan”) unless otherwise
      indicated.




**3.**
            **Eligibility.**




For
      each
      fiscal year of the Company (“Plan Year”), beginning with the fiscal year
      beginning on April 1, 2005 and ending on March 31, 2006, the Compensation
      Committee of the Company (the “Committee”) shall designate certain officers or
      employees of the Employer (“Eligible Employees”) who may be eligible to be
      considered for an Incentive Payment (as described below) under this Plan. The
      Eligible Employees for the first Plan Year are set forth in Appendix A to this
      Plan, and such individuals shall continue to be Eligible Employees for
      subsequent Plan Years unless the Committee shall determine
      otherwise.  An individual who is an Eligible Employee for a Plan Year
      or Plan Years may be excluded from participation in subsequent years at the
      discretion of the Committee.




**4.**
            **Administration.**




(a)           The
      Plan shall be administered by the Committee.




(b)           Subject
      to the terms and conditions of the Plan and such limitations as may be imposed
      from time to time by the Board of Directors of the Company, the Committee shall
      be responsible for the overall management and administration of the Plan and
      shall have such authority as shall be necessary or appropriate in order to
      carry
      out its responsibilities, including, without limitation, the
      authority:




(i)           to
      interpret and construe the Plan and to determine all questions that may arise
      under the Plan as to eligibility for participation in the Plan;


2


(ii)           to
      adopt rules and regulations and to prescribe forms for the operation and
      administration of the Plan; and




(iii)           to
      take any other action not inconsistent with the provisions of the Plan that
      it
      may deem necessary or appropriate.




**5.**
            **Incentive
                Payments.**




The
      Committee shall determine, in its sole discretion, whether a payment will be
      awarded to a Participant in any Plan Year.  The amount, if any,
      awarded to each Eligible Employee for a Plan Year (the “Incentive Payment”)
      shall be credited to a memorandum account maintained by the Company for the
      benefit of such person (the cumulative amount of an Eligible Employee’s
      Incentive Payments are referred to herein as the Eligible Employee’s “Account
      Balance”).  No interest or accruals, of any kind, will  be
      paid or credited to any Account Balance.




**6.**
            **Vesting.**




Subject
      to the forfeiture provisions in this Section 6, each Incentive Payment shall,
      as
      long as the Eligible Employee continues to be employed by an Employer, vest
      20%
      each year on the specified vesting date, until 100% vested on the specified
      vesting date of the fifth year following the Plan Year earned.  If the
      Eligible Employee’s employment with the Employer terminates, there shall be no
      further increase in the Eligible Employee’s vesting percentage and any portion
      of the Eligible Employee’s Incentive Payment that are not vested shall be
      forfeited upon such termination.  Notwithstanding the foregoing, (a)
      the Account Balance shall become fully vested at the effective time of the
      consummation of a Change in Control (as defined in the Stock Plan) as long
      as
      the Employee is employed on such effective date and (b) the Account Balance
      shall become fully vested if the Eligible Employee’s employment with an Employer
      terminates by reason of death or by reason of Disability of the Eligible
      Employee.  The Committee may accelerate vesting at any
      time.




**7.**
            **Payment.**




As
      described in Section 6, in the event of termination due to death, Disability,
      or
      a Change in Control, the vested Account Balance shall be paid to the Eligible
      Employee within 30 days following the termination of the Eligible Employee’s
      employment with the Employer by whom the Eligible Employee is
      employed.  Notwithstanding anything in the Plan to the contrary, all
      vested portions under the Plan shall be paid in cash, subject to applicable
      withholding taxes, as soon as practicable following the specified vesting date
      but in no event later than 15th day of
      the third
      month of the year immediately following the Plan Year.




**8.**
            **Amendment
                and Termination.**




The
      Board
      may amend, suspend or terminate the Plan in whole or in part at any time by
      giving written notice of such amendment, suspension or termination to the
      Committee.




3


**9.**
            **Miscellaneous.**




(a)           *Status
      as an Employee Benefit Plan*.  This Plan is not intended to
      satisfy the requirements for qualification under Section 401(a) of the Code
      or
      to satisfy the definitional requirements for an “employee benefit plan” under
      Section 3(3) of ERISA.  It is intended to be a non-qualified incentive
      compensation program that is exempt from the regulatory requirements of
      ERISA.  The Plan shall be construed and administered so as to
      effectuate this intent.




(b)           *Compliance
      with Section 409A of the Code*. To the extent that the Plan, the Incentive
      Award Agreement and/or any Incentive Payments granted or awarded under the
      Plan
are construed to be non-qualified
      deferred compensation plans described in Section 409A of the Code, the Plan,
      the
      Incentive Award Agreement and any Incentive Payments as applicable, shall be
      operated, administered and construed so as to comply with the requirements
      of
      Section 409A of the Code.  The Plan, the Incentive Award Agreement and
      any Incentive Paymentsshall be subject to amendment, with or without
      advance notice to the Eligible Employees and on a prospective or retroactive
      basis, including, but not limited to, amendment in a manner that adversely
      affects the rights of the Eligible Employees to the extent necessary to effect
      compliance with Section 409A of the Code.




(c)           *No
      Right to Continued Employment*. Neither the establishment of the Plan nor
      any provisions of the Plan nor any action of the Board or the Committee with
      respect to the Plan shall be held or construed to confer upon any Eligible
      Employee any right to a continuation of his or her position as an employee
      of
      the Employer.  The Employer reserves the right to dismiss any Eligible
      Employee or otherwise deal with any Eligible Employee to the same extent as
      though the Plan had not been adopted.




(d)           *Construction
      of Language*.  Whenever appropriate in the Plan, words used in the
      singular may be read in the plural, words used in the plural may be read in
      the
      singular, and words importing the masculine gender may be read as referring
      equally to the feminine or the neuter. Any reference to a section number shall
      refer to a section of this Plan unless otherwise indicated.




(e)           *Governing
      Law*.  The Plan shall be construed, administered and enforced
      according in the laws of the State of New York without giving effect to the
      conflict of laws principles thereof, except to the extent that such laws are
      preempted by federal law.




(f)           *Headings*.  The
      headings of sections are included solely for convenience of reference. If there
      is any conflict between such headings and the text of the Plan, the text shall
      control.




(g)           *Taxes*.  The
      Employer shall have the right to deduct from all amounts paid by the Employer
      as
      an Incentive Payment under the Plan any taxes required by law to be withheld
      with respect to such award.




(h)           *Notices*.  Any
      communication required or permitted to be given under the Plan, including any
      notice, direction, designation, comment, instruction, objection or waiver,
      shall
      be in writing and shall be deemed to have been given at such time as it is
      delivered personally or five days after mailing if mailed, postage prepaid,
      by
      registered or certified mail, return receipt requested, addressed to such party
      at the address listed below, or at such other address as one such party may
      by
      written notice specify to the other party:




4


(i)
            If
                to the Committee:




Carver
      Bancorp, Inc.


75
      West
      125th Street


New
      York,
      New York  10027




Attention:
      Human Resources Department





(ii)           If
      to an Eligible Employee, to the Eligible Employee’s address as shown in the
      Employer’s records.




IN
      WITNESS WHEREOF, the Company adopts this Plan and causes this instrument to
      be
      executed as of December 14, 2006.




CARVER
                BANCORP, INC.By:
                /s/ Margaret D. RobertsName:
                Margaret D. RobertsTitle:
                SVP & Chief Human Resources
                Officer




5


**Appendix
      A**





Eligible
      Employees for the first Plan Year are:





§
            James
                H. Bason


§
            Godofredo  Benedicto


§
            Bridgette  Bowie


§
            Thomas  Burns


§
            Frederica  Clark


§
            Mark  Davis


§
            Frank  Deaton


§
            Carmelo  Felix


§
            Tara  Hickson


§
            Savatrie  Jagroop


§
            Margaret
                D. Roberts


§
            Odell  Rutherford


§
            Patsy  Simmons


§
            Jeffrey
                K. Stanton


§
            Roy  Swan


§
            Gwendolyn  Watts


§
            Timothy  Williams


§
            Deborah
                C. Wright





Such
      individuals shall continue to be Eligible Employees for subsequent Plan Years
      unless the Committee shall determine otherwise.  An individual who is
      an Eligible Employee for a Plan Year or Plan Years may be excluded from
      participation in subsequent years at the discretion of the
      Committee.






6