EXHIBIT 10.3

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                           Carver Federal Savings Bank
                               401(k) Savings Plan
                                       In
                              RSI Retirement Trust
               (As Amended And Restated Effective January 1, 1997
           and including provisions effective through January 1, 2002)
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Incorporating Proposed Amendment Number One

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                                                               Table Of Contents
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                                TABLE OF CONTENTS

Table Of Contents..............................................................i

Introduction...................................................................1

Article I -  Definitions.......................................................3

Article II -  Eligibility and Participation...................................13
     2.1      Eligibility.....................................................13
     2.2      Ineligible Employees............................................13
     2.3      Participation...................................................14
     2.4      Termination of Participation....................................14
     2.5      Eligibility upon Reemployment...................................14
     2.6      Eligibility Upon Reemployment of Employees Subject to
               Section 16(b) of   the Securities Exchange Act of 1934.........15

Article III -  Contributions and Limitations on Contributions.................16
     3.1      Before-Tax Contributions........................................16
     3.2      Limitation on Before-Tax Contributions..........................16
     3.3      Changes in Before-Tax Contributions.............................19
     3.4      Matching Contributions..........................................20
     3.5      Special Contributions...........................................20
     3.6      Discretionary Employer Contributions............................21
     3.7      Limitation on Matching Contributions............................21
     3.8      Aggregate Limit; Multiple Use of Alternative Limitation.........23
     3.9      Interest on Excess Contributions................................24
     3.10     Payment of Contributions to the Trust and Separate Agency.......25
     3.11     Rollover Contributions..........................................25
     3.12     Section 415 Limits on Contributions.............................26
     3.13     Nonelective Employer Contributions..............................30

Article IV -  Vesting and Forfeitures.........................................32
     4.1      Vesting.........................................................32
     4.2      Forfeitures.....................................................33
     4.3      Vesting upon Reemployment.......................................34

Article V -  Trust Fund, Investment Accounts and voting rights................36
     5.1      Trust Fund......................................................36
     5.2      Interim Investments.............................................36
     5.3      Account Values..................................................37
     5.4      Voting Rights...................................................37
     5.5      Tender Offers and Other Offers..................................38
     5.6      Separate Assets.................................................39
     5.7      Power to Invest in Employer Securities..........................39


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Article VI -  Investment Directions, Changes of Investment Directions and
Transfers Between Investment Accounts.........................................40
     6.1      Investment Directions...........................................40
     6.2      Change of Investment Directions.................................40
     6.3      Transfers Between Investment Accounts...........................40
     6.4      Employees Other than Participants...............................41
     6.5      Restrictions on Investments in the Employer Stock Fund for
               Certain  Participants..........................................41

Article VII -  Payment of Benefits............................................43
     7.1      General.........................................................43
     7.2      Spousal Consent Requirements - Optional Forms of Benefit
               Payments, Loans, Withdrawals, Beneficiaries....................44
     7.3      Non-Hardship Withdrawals........................................46
     7.4      Hardship Distributions..........................................46
     7.5      Distribution of Benefits Following Retirement, Disability or
               Termination of Service.........................................50
     7.6      Optional Forms of Benefit Payment upon Retirement, Disability
               or Termination of Service......................................52
     7.7      Designation of Beneficiary......................................55
     7.8      Preretirement Death Benefits....................................56
     7.9      Direct Rollover of Eligible Rollover Distributions..............58
     7.10     Latest Commencement of Benefits.................................64
     7.11     Manner of Payment of Distributions from the Employer
               Stock Fund.....................................................65

Article VIII -  Loans to Participants.........................................66
     8.1      Definitions and Conditions......................................66
     8.2      Loan Amount.....................................................66
     8.3      Term of Loan....................................................66
     8.4      Operational Provisions..........................................67
     8.5      Repayments......................................................68
     8.6      Default.........................................................69
     8.7      Coordination of Outstanding Account and Payment of Benefits.....70

Article IX -  Administration..................................................71
     9.1      General Administration of the Plan..............................71
     9.2      Designation of Named Fiduciaries................................71
     9.3      Responsibilities of Fiduciaries.................................71
     9.4      Plan Administrator..............................................72
     9.5      Committee.......................................................72
     9.6      Powers and Duties of the Committee..............................73
     9.7      Certification of Information....................................74
     9.8      Authorization of Benefit Payments...............................75
     9.9      Payment of Benefits to Legal Custodian..........................75
     9.10     Service in More Than One Fiduciary Capacity.....................75


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     9.11     Payment of Expenses.............................................75
     9.12     Administration of Separate Assets...............................76

Article X -  Benefit Claims Procedure.........................................77
     10.1     Definition......................................................77
     10.2     Claims..........................................................77
     10.3     Disposition of Claim............................................77
     10.4     Denial of Claim.................................................77
     10.5     Inaction by Plan Administrator..................................78
     10.6     Right to Full and Fair Review...................................78
     10.7     Time of Review..................................................78
     10.8     Final Decision..................................................78

Article XI -  Amendment, Termination, and Withdrawal..........................79
     11.1     Amendment and Termination.......................................79
     11.2     Withdrawal from the Trust Fund..................................79

Article XII -  Top-Heavy Plan Provisions......................................80
     12.1     Introduction....................................................80
     12.2     Definitions.....................................................80
     12.3     Minimum Contributions...........................................84
     12.4     Impact on Section 415 Maximum Benefits..........................85
     12.5     Vesting.........................................................86

Article XIII -  Miscellaneous Provisions......................................87
     13.1     No Right to Continued Employment................................87
     13.2     Merger, Consolidation, or Transfer..............................87
     13.3     Nonalienation of Benefits.......................................87
     13.4     Missing Payee...................................................87
     13.5     Affiliated Employers............................................88
     13.6     Successor Employer..............................................88
     13.7     Return of Employer Contributions................................88
     13.8     Adoption of Plan by Affiliated Employer.........................88
     13.9     Construction of Language........................................89
     13.10    Headings........................................................89
     13.11    Governing Law...................................................89


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787                                  iii             Carver Federal Savings Bank
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                                                                    Introduction
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                                  INTRODUCTION

Effective as of October 1, 1989, ("Effective Date"), Carver Federal Savings Bank
("Employer") adopted the Carver Federal Savings Bank 401(k) Savings Plan and
Trust ("1989 Plan").

Effective as of May 1, 1993, the Employer adopted resolutions wherein RSI
Retirement Trust was named successor trustee and the RSI Retirement Trust
Agreement and Declaration of Trust ("Agreement") was adopted.

Effective as of May 1, 1993, the 1989 Plan was amended and restated in its
entirety. The amended and restated plan became known as Carver Federal Savings
Bank 401(k) Savings Plan in RSI Retirement Trust ("Prior Plan"). Effective as of
October 24, 1994, the Employer (a) added an investment fund to the Prior Plan
consisting of common stock of the Employer, (b) established the Plan as a Plan
of Partial Participation as defined under the Agreement and (c) adopted a
Separate Agreement establishing a separate trust to hold the common stock of the
Employer and designated a Separate Agency to serve as trustee.

Effective as of January 1, 1997, the Prior Plan is amended and restated in its
entirety. The amended and restated plan shall be known as Carver Federal Savings
Bank 401(k) Savings Plan in RSI Retirement Trust ("Plan"), shall contain the
terms and conditions set forth herein, and shall in all respects be subject to
the provisions of the Agreement which are incorporated herein and made a part
hereof.

The Plan as amended and restated hereunder incorporates a cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code of 1986, as
amended ("Code").

The Plan shall constitute a profit-sharing plan within the meaning of Section
401(a) of the Code, without regard to current or accumulated profits of the
Employer, as provided in Section 401(a)(27) of the Code.

The Plan complies with all Internal Revenue Service legislation and regulations
issued to date addressing tax-qualified plans, including the Uniformed Services
Employment and Reemployment Rights Act of 1994, the Uruguay Round Agreements
Act, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of
1997, the Restructuring and Reform Act of 1998 and the Community Renewal Tax
Relief Act of 2000 (commonly referred to as GUST II), and "good faith"
compliance with the requirements of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA), as provided for under Internal Revenue
Service Notice 2001-57. In addition, the Plan complies with final regulations
under Code Section 401(a)(9).

Subject to any amendments that may subsequently be adopted by the Employer prior
to his Termination of Service, the provisions set forth in this Plan shall apply
to an Employee who is in the employment of the Employer on or after January 1,
1997. Except to the extent specifically required to the contrary under the terms
of this Plan, for terminations of employment prior to January 1, 1997, the
rights and benefits of a former participant shall be determined in accordance
with the provisions of the Prior Plan as in effect on the date of the former
participant's termination of employment.


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The Employer has herein restated the Plan with the intention that (i) the Plan
shall at all times be qualified under Section 401(a) of the Code, (ii) the
Agreement and any trust created under any Separate Agreement shall be tax-exempt
under Section 501(a) of the Code, and (iii) Employer contributions under the
Plan shall be tax deductible under Section 404 of the Code. The provisions of
the Plan and the Agreement, as well as any Separate Agreement shall be construed
to effectuate such intentions.

Effective January 1, 2002, the Plan is amended to meet the requirements for a
designed-based "safe harbor" arrangement under Sections 401(k)(12) and
401(m)(11) of the Code.


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787                                   2              Carver Federal Savings Bank
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                                                                     Article I -
                                                                     Definitions
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                                   ARTICLE I -
                                   DEFINITIONS

The following words and phrases shall have the meanings hereinafter ascribed to
them. Those words and phrases which have limited application are defined in the
respective Articles in which such terms appear.

1.1   Accounts means the Before-Tax Contribution Account (including Special
      Contributions, if any), Matching Contribution Account, Rollover
      Contribution Account, Discretionary Employer Contribution Account and
      commencing January 1, 2001, Nonelective Employer Contribution Account,
      established under the Plan on behalf of an Employee.

1.2   Actual Contribution Percentage means, prior to January 1, 2002, the ratio
      (expressed as a percentage) of the Matching Contributions under the Plan
      which are made on behalf of an Eligible Employee for the Plan Year to such
      Eligible Employee's compensation (as defined under Section 414(s) of the
      Code) for the Plan Year. An Eligible Employee's compensation hereunder
      shall include compensation receivable from the Employer for that portion
      of the Plan Year during which the Employee is an Eligible Employee, up to
      a maximum of one hundred sixty thousand dollars ($160,000) for the 1997,
      1998 and 1999 Plan Years and one hundred seventy thousand dollars
      ($170,000) for the 2000 and 2001 Plan Years, adjusted in multiples of ten
      thousand dollars ($10,000) for increases in the cost-of-living as
      prescribed by the Secretary of the Treasury under Section 401(a)(17)(B) of
      the Code.

1.3   Actual Deferral Percentage means, prior to January 1, 2002, the ratio
      (expressed as a percentage) of the sum of Before-Tax Contributions, and
      those Qualified Nonelective Contributions taken into account under the
      Plan for the purpose of determining the Actual Deferral Percentage, which
      are made on behalf of an Eligible Employee for the Plan Year to such
      Eligible Employee's compensation (as defined under Section 414(s) of the
      Code) for the Plan Year. An Eligible Employee's compensation hereunder
      shall include compensation receivable from the Employer for that portion
      of the Plan Year during which the Employee is an Eligible Employee, up to
      a maximum of one hundred sixty thousand dollars ($160,000) for the 1997,
      1998 and 1999 Plan Years and one hundred seventy thousand dollars
      ($170,000) for the 2000 and 2001 Plan Years, adjusted in multiples of ten
      thousand dollars ($10,000) for increases in the cost-of-living as
      prescribed by the Secretary of the Treasury under Section 401(a)(17)(B) of
      the Code.

1.4   Affiliated Employer means a member of an affiliated service group (as
      defined under Section 414(m) of the Code), a controlled group of
      corporations (as defined under Section 414(b) of the Code), a group of
      trades or businesses under common control (as defined under Section 414(c)
      of the Code) of which the Employer is a member, any leasing organization
      (as defined under Section 414(n) of the Code) providing the services of
      Leased Employees to the Employer, or any other group provided for under
      any and all Income Tax Regulations promulgated by the Secretary of the
      Treasury under Section 414(o) of the Code.


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                                                                     Definitions
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1.5   Affiliated Service means employment with an employer during the period
      that such employer is an Affiliated Employer.

1.6   Agreement means the RSI Retirement Trust Agreement and Declaration of
      Trust as amended and restated August 1, 1990, as amended from time to
      time. The Agreement shall be incorporated herein and constitute a part of
      the Plan.

1.7   Average Actual Contribution Percentage means the average of the Actual
      Contribution Percentages of (a) the group comprised of Eligible Employees
      who are Highly Compensated Employees or (b) the group comprised of
      Eligible Employees who are Non-Highly Compensated Employees, whichever is
      applicable.

1.8   Average Actual Deferral Percentage means the average of the Actual
      Deferral Percentages of (a) the group comprised of Eligible Employees who
      are Highly Compensated Employees or (b) the group comprised of Eligible
      Employees who are Non-Highly Compensated Employees, whichever is
      applicable.

1.9   Before-Tax Contribution Account means the separate, individual account
      established on behalf of a Participant to which Before-Tax Contributions
      and Special Contributions if any, made on his behalf are credited,
      together with all earnings and appreciation thereon, and against which are
      charged any withdrawals, loans and other distributions made from such
      account and any losses, depreciation or expenses allocable to amounts
      credited to such account.

1.10  Before-Tax Contributions means the contributions of the Employer made in
      accordance with the Compensation Reduction Agreements of Participants
      pursuant to Section 3.1.

1.11  Beneficiary means any person who is receiving or is eligible to receive a
      benefit under Section 7.8 of the Plan upon the death of an Employee or
      former Employee.

1.12  Board means the board of trustees, directors or other governing body of
      the Sponsoring Employer.

1.13  Code means the Internal Revenue Code of 1986, as amended from time to
      time.

1.14  Committee means the person or persons appointed by the Employer in
      accordance with Section 9.2(b).

1.15  Compensation means with respect to Plan Years commencing on and after
      January 1, 1997, an Employee's wages, salary, fees and other amounts
      defined as compensation in Section 415(c)(3) of the Code and Income Tax
      Regulations Sections 1.415-2(d)(2), (3) and (6), received for personal
      services actually rendered in the course of employment with the Employer
      for the calendar year, prior to any reduction pursuant to a Compensation
      Reduction Agreement. Compensation shall include commissions, overtime,
      bonuses, wage continuation payments to an Employee absent due to illness
      or disability of a short-term nature, the amount of any Employer
      contributions under a flexible benefits program maintained by the Employer
      under Section 125 of the Code pursuant to a salary reduction agreement
      entered into by the Participant under Section 125


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                                                                     Article I -
                                                                     Definitions
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      of the Code, amounts paid or reimbursed by the Employer for Employee
      moving expenses (to the extent not deductible by the Employee), and the
      value of any nonqualified stock option granted to an Employee by the
      Employer (to the extent includable in gross income for the year granted).
      Commencing January 1, 1998, Compensation shall also include elective
      amounts that are not includable in the gross income of the Employee by
      reason of Section 132(f)(4) of the Code.

      Compensation does not include contributions made by the Employer to any
      other pension, deferred compensation, welfare or other employee benefit
      plan, amounts realized from the exercise of a nonqualified stock option or
      the sale of a qualified stock option, and other amounts which receive
      special tax benefits.

      Compensation shall not exceed one hundred sixty thousand dollars
      ($160,000) for the 1997, 1998 and 1999 Plan Years and one hundred seventy
      thousand dollars ($170,000) for the 2000 and 2001 Plan Years, adjusted in
      multiples of ten thousand dollars ($10,000) for increases in the
      cost-of-living as prescribed by the Secretary of the Treasury under
      Section 401(a)(17)(B) of the Code. For purposes of this Section 1.15, if
      the Plan Year in which a Participant's Compensation is being made is less
      than twelve (12) calendar months, the amount of Compensation taken into
      account for such Plan Year shall be the adjusted amount, as prescribed by
      the Secretary of the Treasury under Section 401(a)(17) of the Code, for
      such Plan Year, multiplied by a fraction, the numerator of which is the
      number of months taken into account for such Plan Year and the denominator
      of which is twelve (12). In determining the dollar limitation hereunder,
      compensation received from any Affiliated Employer shall be recognized as
      Compensation.

1.16  Compensation Reduction Agreement means an agreement between the Employer
      and an Eligible Employee whereby the Eligible Employee agrees to reduce
      his Compensation during the applicable payroll period by an amount equal
      to any whole percentage thereof, to the extent provided in Section 3.1,
      and the Employer agrees to contribute to the Trust, on behalf of such
      Eligible Employee, an amount equal to the specified reduction in
      Compensation.

1.17  Conversion Date means October 24, 1994, the date of conversion of the
      Employer from mutual to stock ownership.

1.18  Disability means a physical or mental condition, determined after review
      of those medical reports deemed satisfactory for this purpose, which
      renders the Participant totally and permanently incapable of engaging in
      any substantial gainful employment based on his education, training and
      experience.

1.19  Discretionary Employer Contribution Account means the separate, individual
      account established on behalf of a Participant to which Discretionary
      Employer Contributions, if any, are credited, together with all earnings
      and appreciation thereon, and against which are charged any


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                                                                     Article I -
                                                                     Definitions
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      withdrawals, loans and other distributions made from such account, as well
      as any losses, depreciation, or expenses allocable to amounts credited to
      such account.

1.20  Discretionary Employer Contributions means the amounts, if any,
      contributed by the Employer on behalf of an Eligible Employee, pursuant to
      Section 3.6.

1.21  Early Retirement Date means the first day of any month coincident with or
      following the Participant's attainment of age sixty (60) and the
      completion of a five (5) year Period of Service.

      Notwithstanding any provisions of the plan to the contrary, if a
      Participant incurs a Termination of Service after having completed a five
      (5) year Period of Service but before attaining age sixty (60), the
      Participant's Early Retirement Date shall be the date as of which the
      Participant attains age sixty (60).

1.22  Effective Date means October 1, 1989.

1.23  Eligible Employee means an Employee who is eligible to participate in the
      Plan pursuant to the provisions of Article II.

1.24  Employee means any person employed by the Employer.

1.25  Employer means Carver Federal Savings Bank and any Participating Affiliate
      or any successor organization which shall continue to maintain the Plan
      set forth herein.

1.26  Employer Resolutions means resolutions adopted by the Board.

1.27  Employer Stock Fund means commencing upon the Conversion Date, the
      Separate Assets consisting of common stock of the Employer which shall be
      maintained in an Investment Account established for such purpose.

1.28  Employment Commencement Date means the date on which an Employee first
      performs an Hour of Service for the Employer upon initial employment or,
      if applicable, upon reemployment.

1.29  ERISA means the Employee Retirement Income Security Act of 1974, as
      amended from time to time.

1.30  Forfeitures means any amounts forfeited pursuant to Section 4.2.

1.31  Hardship means the condition described in Section 7.4.

1.32  Highly Compensated Employee means, with respect to a Plan Year commencing
      January 1, 1997, an Employee or an employee of an Affiliated Employer who
      is such an Employee or employee during the Plan Year for which a
      determination is being made and who:

      (a)   during the Plan Year immediately preceding the Plan Year for which a
            determination is being made, received compensation as defined under
            Section 414(q)(4) of the Code


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                                                                     Article I -
                                                                     Definitions
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            ("Section 414(q) Compensation") from the Employer, in excess of
            eighty thousand dollars ($80,000) and effective for the 2000 Plan
            Year, eighty-five thousand dollars ($85,000), adjusted as prescribed
            by the Secretary of the Treasury under Section 415(d) of the Code,
            or

      (b)   at any time during the Plan Year for which a determination is being
            made or at any time during the Plan Year immediately preceding the
            Plan Year for which a determination is being made, was a
            five-percent owner as described under Section 414(q)(2) of the Code.

      For purposes of subsection (a) above, effective for Plan Years commencing
      after December 31, 1997, Section 414(q) Compensation shall include (A) any
      elective deferral (as defined in Section 402(g)(3) of the Code, and (B)
      any amount which is contributed or deferred by the Employer at the
      election of the Employee and which is not includable in the gross income
      of the Employee by reason of Section 125, 132(f)(4) or 457 of the Code.

      Highly Compensated Employee also means a former Employee who (A) incurred
      a Termination of Service prior to the Plan Year of the determination, (B)
      is not credited with an Hour of Service during the Plan Year of the
      determination and (C) satisfied the requirements of subsection (a) or (b)
      during either the Plan Year of his Termination of Service or any Plan Year
      ending coincident with or subsequent to the Employee's attainment of age
      fifty-five (55).

1.33  Hour of Service means each hour for which an Employee is paid or entitled
      to be paid by the Employer for the performance of duties.

1.34  Investment Accounts means any and all of the investment accounts
      established by Board resolution and presented to the Trustees, for the
      purpose of investing contributions made to the Plan Funds in accordance
      with the provisions of the Agreement or Separate Agreement, as applicable.
      The securities and other property in which contributions to the Investment
      Accounts of the Plan Funds may be invested shall be specified in the
      Agreement or the Separate Agreement, and the rights of the Trustees or
      Separate Agency shall be established in accordance with the provisions of
      such Agreement and Separate Agreement.

1.35  Leased Employee means with respect to Plan Years commencing on and after
      January 1, 1997, any individual (other than an Employee of the Employer or
      an employee of an Affiliated Employer) who, pursuant to an agreement
      between the Employer or any Affiliated Employer and any other person
      ("leasing organization"), has performed services for the Employer or any
      Affiliated Employer on a substantially full-time basis for a period of at
      least one (1) year, and such services are performed under the primary
      direction of and control by the Employer or any Affiliated Employer. A
      determination as to whether a Leased Employee shall be treated as an
      Employee of the Employer or an Affiliated Employer shall be made as
      follows: a Leased Employee shall not be considered an Employee of the
      Employer if: (a) such employee is a participant in a money purchase
      pension plan providing (i) a nonintegrated Employer contribution rate of
      at least ten percent (10%) of compensation, as defined in Section
      415(c)(3)


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                                                                     Definitions
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      of the Code, however, including amounts contributed pursuant to a
      compensation reduction agreement which are excludable from the employee's
      gross income under Section 125, Section 402(e)(3), Section 402(h)(1)(B) or
      Section 403(b) of the Code, and effective January 1, 1998, including
      elective amounts that are excludable from the gross income of an Employee
      by reason of Section 132(f)(4) of the Code; (ii) immediate plan
      participation; and (iii) full and immediate vesting; and (b) Leased
      Employees do not constitute more than twenty percent (20%) of the
      Employer's Non-Highly Compensated Employees.

1.36  Matching Contribution Account means the separate, individual account
      established on behalf of a Participant to which the Matching Contributions
      made on such Participant's behalf are credited, together with all earnings
      and appreciation thereon, and against which are charged any withdrawals,
      loans and other distributions made from such account and any losses,
      depreciation or expenses allocable to amounts credited to such account.

1.37  Matching Contributions means the contributions made by the Employer
      pursuant to Section 3.4.

1.38  Named Fiduciaries means the Trustees, the Committee, the Separate Agency
      and such other parties who are designated by the Sponsoring Employer to
      control and manage the operation and administration of the Plan.

1.39  Net Value means the value of an Employee's Accounts as determined as of
      the Valuation Date coincident with or next following the event requiring
      such determination.

1.40  Nonelective Employer Contribution Account means the separate, individual
      account established on behalf of a Participant to which Nonelective
      Employer Contributions, if any, made on such Participant's behalf are
      credited, together with all earnings and appreciation thereon, and against
      which are charged any withdrawals, loans and other distributions made from
      such account and any losses, depreciation or expenses allocable to amounts
      credited to such account.

1.41  Nonelective Employer Contributions means the contributions made by the
      Employer pursuant to Section 3.13.

1.42  Non-Highly Compensated Employee means, with respect to a Plan Year, an
      Employee who is not a Highly Compensated Employee.

1.43  Normal Retirement Age means the date an Employee attains age sixty-five
      (65).

1.44  Normal Retirement Date means the first day of the month coincident with or
      next following the Participant's Normal Retirement Age.

1.45  One Year Period of Severance means, a twelve (12) consecutive month period
      following an Employee's Termination of Service with the Employer during
      which the Employee did not perform an Hour of Service.



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                                                                     Definitions
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      Notwithstanding the foregoing, if an Employee is absent from employment
      for maternity or paternity reasons, such absence during the twenty-four
      (24) month period commencing on the first date of such absence shall not
      constitute a One Year Period of Severance. An absence from employment for
      maternity or paternity reasons means an absence (a) by reason of pregnancy
      of the Employee, or (b) by reason of a birth of a child of the Employee,
      or (c) by reason of the placement of a child with the Employee in
      connection with the adoption of such child by such Employee, or (d) for
      purposes of caring for such child for a period beginning immediately
      following such birth or placement.

1.46  Participant means an Eligible Employee who participates in accordance with
      the provisions of Section 2.3, and whose participation in the Plan has not
      been terminated in accordance with the provisions of Section 2.4.

1.47  Participating Affiliate means any corporation that is a member of a
      controlled group of corporations (within the meaning of Section 414(b) of
      the Code) of which the Sponsoring Employer is a member and any
      unincorporated trade or business that is a member of a group of trades or
      businesses under common control (within the meaning of Section 414(c) of
      the Code) of which the Sponsoring Employer is a member, which, with the
      prior approval of the Sponsoring Employer and subject to such terms and
      conditions as may be imposed by such Sponsoring Employer and the Trustees,
      shall adopt this Plan in accordance with the provisions of Section 13.8
      and the Agreement. Such entity shall continue to be a Participating
      Affiliate until such entity terminates its participation in the Plan in
      accordance with Section 13.8.

1.48  Period of Service means a period commencing with an Employee's Employment
      Commencement Date and ending on the date such Employee first incurs a
      Termination of Service.

      Notwithstanding the foregoing, the period between the first and second
      anniversary of the first date of a maternity or paternity absence
      described under Section 1.45 shall not be included in determining a Period
      of Service.

      A period during which an individual was not employed by the Employer shall
      nevertheless be deemed to be a Period of Service if such individual
      incurred a Termination of Service and:

      (a)   such Termination of Service was the result of resignation, discharge
            or retirement and such individual is reemployed by the Employer
            within one (1) year after such Termination of Service; or

      (b)   such Termination of Service occurred when the individual was
            otherwise absent for less than one (1) year and he was reemployed by
            the Employer within one (1) year after the date such absence began.

      All Periods of Service not disregarded under Sections 2.5 and 4.3 shall be
      aggregated.


--------------------------------------------------------------------------------
787                                   9              Carver Federal Savings Bank
<PAGE>

                                                                     Article I -
                                                                     Definitions
--------------------------------------------------------------------------------

      Wherever used in the Plan, a Period of Service means the quotient obtained
      by dividing the days in all Periods of Service not disregarded hereunder
      by three hundred sixty-five (365) and disregarding any fractional
      remainder.

1.49  Plan means the Carver Federal Savings Bank 401(k) Savings Plan in RSI
      Retirement Trust, as herein restated and as it may be amended from time to
      time. The Plan shall be a Plan of Partial Participation as defined under
      the Agreement.

1.50  Plan Administrator means the person or persons who have been designated as
      such by the Employer in accordance with the provisions of Section 9.4.

1.51  Plan Funds means the assets of the Plan held in the Trust Fund and
      Separate Assets held under any Separate Agreement.

1.52  Plan Year means the calendar year.

1.53  Postponed Retirement Date means the first day of the month coincident with
      or next following a Participant's date of actual retirement which occurs
      after his Normal Retirement Date.

1.54  Prior Plan means the Carver Federal Savings Bank 401(k) Savings Plan in
      RSI Retirement Trust as in effect on the date immediately preceding the
      Restatement Date.

1.55  Qualified Nonelective Contributions means contributions, other than
      Matching Contributions and Discretionary Employer Contributions, made by
      the Employer, which (a) Participants may not elect to receive in cash in
      lieu of their being contributed to the Plan; (b) are one hundred percent
      (100%) nonforfeitable when made; and (c) are not distributable under the
      terms of the Plan to Participants or their Beneficiaries until the
      earliest of:

      (i)   the Participant's death, Disability or separation from service for
            other reasons;

      (ii)  the Participant's attainment of age fifty-nine and one-half
            (59-1/2); or

      (iii) termination of the Plan.

      Special Contributions defined under Section 1.63 are Qualified Nonelective
      Contributions.

1.56  Restatement Date means January 1, 1997.

1.57  Retirement Date means the Participant's Normal Retirement Date, Early
      Retirement Date or Postponed Retirement Date, whichever is applicable.

1.58  Rollover Contribution means (a) a contribution to the Plan of money
      received by an Employee from a qualified plan or (b) a contribution to the
      Plan of money transferred directly from another qualified plan on behalf
      of the Employee, which the Code permits to be rolled over into the Plan.


--------------------------------------------------------------------------------
787                                  10              Carver Federal Savings Bank
<PAGE>

                                                                     Article I -
                                                                     Definitions
--------------------------------------------------------------------------------

1.59  Rollover Contribution Account means the separate, individual account
      established on behalf of an Employee to which his Rollover Contributions
      are credited together with all earnings and appreciation thereon, and
      against which are charged any withdrawals, loans and other distributions
      made from such account and any losses, depreciation or expenses allocable
      to amounts credited to such account.

1.60  Separate Agency means any trustee holding Plan Funds under a Separate
      Agreement.

1.61  Separate Agreement means the trust agreement governing the investment and
      administration of any Separate Assets. Such Separate Agreement shall be
      incorporated herein and constitute a part of the Plan.

1.62  Separate Assets means assets of the Plan as described in Article V which
      are held in a trust other than the Trust.

1.63  Special Contributions means the contributions made by the Employer
      pursuant to Section 3.5. Special Contributions are Qualified Nonelective
      Contributions as defined under Section 1.55.

1.64  Sponsoring Employer means Carver Federal Savings Bank or any successor
      organization which shall continue to maintain the Plan set forth herein.

1.65  Spouse means a person to whom the Employee was legally married and which
      marriage had not been dissolved by formal divorce proceedings that had
      been completed prior to the date on which payments to the Employee are
      scheduled to commence.

1.66  Termination of Service means the earlier of (a) the date on which an
      Employee's service is terminated by reason of his resignation, retirement,
      discharge, death or Disability or (b) the first anniversary of the date on
      which such Employee's active service ceases for any other reason.

      Service in the Armed Forces of the United States of America shall not
      constitute a Termination of Service but shall be considered to be a period
      of employment by the Employer provided that (i) such military service is
      caused by war or other emergency or the Employee is required to serve
      under the laws of conscription in time of peace, (ii) the Employee returns
      to employment with the Employer within six (6) months following discharge
      from such military service and (iii) such Employee is reemployed by the
      Employer at a time when the Employee had a right to reemployment at his
      former position or substantially similar position upon separation from
      such military duty in accordance with seniority rights as protected under
      the laws of the United States of America. Notwithstanding any provision of
      the Plan to the contrary,[ effective December 12, 1994, contributions,
      benefits and calculation of Periods of Service with respect to qualified
      military service will be provided in accordance with Section 414(u) of the
      Code

      A leave of absence granted to an Employee by the Employer shall not
      constitute a Termination of Service provided that the Participant returns
      to the active service of the Employer at the expiration of any such period
      for which leave has been granted.


--------------------------------------------------------------------------------
787                                  11              Carver Federal Savings Bank
<PAGE>

                                                                     Article I -
                                                                     Definitions
--------------------------------------------------------------------------------

      Notwithstanding the foregoing, an Employee who is absent from service with
      the Employer beyond the first anniversary of the first date of his absence
      for maternity or paternity reasons set forth in Section 1.45 shall incur a
      Termination of Service for purposes of the Plan on the second anniversary
      of the date of such absence.

1.67  Trust means the trust established or maintained under the Agreement with
      respect to the Plan.

1.68  Trust Fund means the assets held in accordance with the Agreement.

1.69  Trustees means the Trustees of the RSI Retirement Trust.

1.70  Units means the units of measure of an Employee's proportionate undivided
      beneficial interest in one or more of the Investment Accounts, valued as
      of the close of business.

1.71  Valuation Date means each business day.


--------------------------------------------------------------------------------
787                                  12              Carver Federal Savings Bank
<PAGE>

                                                                    Article II -
                                                   Eligibility and Participation
--------------------------------------------------------------------------------

                                   ARTICLE II -
                          ELIGIBILITY AND PARTICIPATION

2.1   Eligibility

      (a)   Every Employee who was a Participant in the Prior Plan immediately
            prior to the Restatement Date shall continue to be a Participant on
            the Restatement Date.

      (b)   Every other Employee who is not excluded under the provisions of
            Section 2.2 shall become an Eligible Employee upon satisfying all of
            the following conditions:

            (i)   completion of a Period of Service of one (1) year;

            (ii)  attainment of age twenty-one (21); and

            (iii) classification as a salaried Employee.

      (c)   For purposes of determining (i) if an Employee completed a Period of
            Service of one (1) year and (ii) Periods of Service pursuant to
            Section 2.5, employment with (A) an Affiliated Employer and (B)
            effective October 1, 1989 and November 19, 1990 respectively, prior
            employment with either Crossland Savings, FSB or Nassau Federal
            Savings and Loan Association, shall be deemed employment with the
            Employer.

      (d)   An Employee who otherwise satisfies the requirements of this Section
            2.1 and who is no longer excluded under the provisions of Section
            2.2 shall immediately become an Eligible Employee.

2.2   Ineligible Employees

      The following classes of Employees are ineligible to participate in the
      Plan:

      (a)   Employees compensated on an hourly basis;

      (b)   Leased Employees;

      (c)   Employees in a unit of Employees covered by a collective bargaining
            agreement with the Employer pursuant to which employee benefits were
            the subject of good faith bargaining and which agreement does not
            expressly provide that Employees of such unit be covered under the
            Plan; and

      (d)   Owner-Employees. For purposes of this Section 2.2(d), Owner-Employee
            means an individual who is a sole proprietor or who is a partner
            owning more than ten percent (10%) of either the capital or profits
            interest of a partnership which adopted the Plan.


--------------------------------------------------------------------------------
787                                  13              Carver Federal Savings Bank
<PAGE>

                                                                    Article II -
                                                   Eligibility and Participation
--------------------------------------------------------------------------------

2.3   Participation

      Participation in the Plan is voluntary with respect to an election for
      Before-Tax Contributions. An Eligible Employee may elect to make
      Before-Tax Contributions in accordance with Section 3.1, as of the first
      full payroll period of any calendar month with or next following
      satisfaction of the eligibility requirements set forth in Section 2.1. In
      addition, an Eligible Employee will participate in the Plan upon
      satisfaction of the eligibility requirements set forth in Section 2.1,
      with respect to eligibility for (a) Special Contributions in accordance
      with Section 3.5 or (b) Discretionary Employer Contributions in accordance
      with Section 3.9 or (c) Nonelective Employer Contributions in accordance
      with Section 3.13.

      An election for Before-Tax Contributions shall be evidenced by completing
      and filing the form prescribed by the Committee not less than ten (10)
      days prior to the date participation is to commence. Such form shall
      include, but not be limited to, a Compensation Reduction Agreement, a
      designation of Beneficiary, and an investment direction as described in
      Section 6.1. By completing and filing such form, the Eligible Employee
      authorizes the Employer to make the applicable payroll deductions from
      Compensation, commencing on the first applicable payday coincident with or
      next following the effective date of the Eligible Employee's election to
      participate. In the case of Special Contributions or Discretionary
      Employer Contributions and effective January 1, 2001, Nonelective Employer
      Contributions, a Participant shall complete a form prescribed by the
      Committee, designating a Beneficiary and an investment direction as
      described in Section 6.1.

      Effective January 1, 2001, for any Plan Year in which a Nonelective
      Employer Contribution is made in accordance with Section 3.13, all
      Employees who meet the requirements of an Eligible Employee during such
      Plan Year and who are employed by the Employer on the last day of the Plan
      Year shall participate in the Plan.

2.4   Termination of Participation

      Participation in the Plan shall terminate on the earlier of the date a
      Participant dies or the entire vested interest in the Net Value of such
      Participant's Accounts has been distributed.

2.5   Eligibility upon Reemployment

      If an Employee incurs a One Year Period of Severance prior to satisfying
      the eligibility requirements of Section 2.1, service prior to such One
      Year Period of Severance shall be disregarded and such Employee must
      satisfy the eligibility requirements of Section 2.1 as a new Employee.

      If an Employee incurs a One Year Period of Severance after satisfying the
      eligibility requirements of Section 2.1 and:

      (a)   if such Employee is not vested in any Matching Contributions and/or
            Discretionary Employer Contributions and/or Nonelective Employer
            Contributions, incurs a One Year


--------------------------------------------------------------------------------
787                                  14              Carver Federal Savings Bank
<PAGE>

                                                                    Article II -
                                                   Eligibility and Participation
--------------------------------------------------------------------------------

            Period of Severance and again performs an Hour of Service, the
            Employee shall receive credit for Periods of Service prior to a One
            Year Period of Severance only if the number of consecutive One Year
            Periods of Severance is less than the greater of: (i) five (5) years
            or (ii) the aggregate number of such Employee's Periods of Service
            credited before his One Year Period of Severance. If such former
            Employee's Periods of Service prior to his One Year Period of
            Severance are recredited under this Section 2.5, such former
            Employee shall be eligible to participate immediately upon
            reemployment, provided such Employee is not excluded from
            participating under the provisions of Section 2.2. If such former
            Employee's Periods of Service prior to his One Year Period of
            Severance are not recredited under this Section 2.5, such Employee
            must satisfy the eligibility requirements of Section 2.1 as a new
            Employee;

      (b)   if such Employee is vested in any Matching Contributions and/or
            Discretionary Employer Contributions and/or Nonelective Employer
            Contributions, incurs a One Year Period of Severance and again
            performs an Hour of Service, the Employee shall receive credit for
            Periods of Service prior to his One Year Period of Severance and
            shall be eligible to participate in the Plan immediately upon
            reemployment, provided such Employee is not excluded from
            participating under the provisions of Section 2.2.

2.6   Eligibility Upon Reemployment of Employees Subject to Section 16(b) of the
      Securities Exchange Act of 1934

      Notwithstanding anything contained in the Plan to the contrary, if an
      Employee subject to the provisions of Section 16(b) of the Securities
      Exchange Act of 1934 incurs a Termination of Service and again performs an
      Hour of Service, such Employee shall not be eligible to participate in the
      Plan until the later of: (a) the date which is six (6) months from the
      date such Employee incurred a Termination of Service or (b) the date such
      Employee again performs an Hour of Service with the Employer; provided
      such Employee is not excluded from participating under the provisions of
      Section 2.2.


--------------------------------------------------------------------------------
787                                  15              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

                                  ARTICLE III -
                 CONTRIBUTIONS AND LIMITATIONS ON CONTRIBUTIONS

3.1   Before-Tax Contributions

      The Employer shall make Before-Tax Contributions for each payroll period
      in an amount equal to the amount by which a Participant's Compensation has
      been reduced with respect to such period under his Compensation Reduction
      Agreement. Subject to the limitations set forth in Sections 3.2 and 3.12,
      the amount of reduction authorized by the Eligible Employee shall be
      limited to whole percentages of Compensation and shall not be less than
      one percent (1%) nor greater than fifteen percent (15%). The Before-Tax
      Contributions made on behalf of a Participant shall be credited to such
      Participant's Before-Tax Contribution Account and shall be invested in
      accordance with Article VI of the Plan.

3.2   Limitation on Before-Tax Contributions

      Sections 3.2(a), (b), (c) and (d), below, shall apply with respect to Plan
      Years beginning prior to January 1, 2002. Commencing January 1, 2002, the
      alternative method of meeting the non-discrimination requirements set
      forth in Section 401(k)(12) of the Code shall apply.

      For any year in which the alternative method, referred to above, applies,
      the Employer shall provide each Eligible Employee a comprehensive notice
      of the Employee's rights and obligations under the Plan, written in a
      manner calculated to be understood by the average Eligible Employee. This
      notice will be provided at least thirty (30) days but not more than ninety
      (90) days before the beginning of the Plan Year. In the event the Employee
      becomes an Eligible Employee after the ninetieth (90th) day before the
      beginning of the Plan Year and does not receive the notice for that
      reason, the notice must be provided no more than ninety (90) days before
      the Employee becomes an Eligible Employee, but not later than the date the
      Employee actually becomes an Eligible Employee.

      In addition to any other election periods provided under the Plan, each
      Eligible Employee may make or modify a deferral election during the thirty
      (30)-day period immediately following receipt of the notice described in
      the above paragraph.

      (a)   Commencing January 1, 1997, the percentage of Before-Tax
            Contributions made on behalf of a Participant who is a Highly
            Compensated Employee shall be limited so that the Average Actual
            Deferral Percentage for the group of such Highly Compensated
            Employees for the Plan Year does not exceed the greater of:

            (i)   the Average Actual Deferral Percentage for the group of
                  Eligible Employees who were Non-Highly Compensated Employees
                  for the preceding Plan Year multiplied by 1.25; or


--------------------------------------------------------------------------------
787                                  16              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            (ii)  the Average Actual Deferral Percentage for the group of
                  Eligible Employees who were Non-Highly Compensated Employees
                  for the preceding Plan Year multiplied by two (2); provided,
                  that the difference in the Average Actual Deferral Percentage
                  for eligible Highly Compensated Employees and eligible
                  Non-Highly Compensated Employees does not exceed two percent
                  (2%). Use of this alternative limitation shall be subject to
                  the provisions of Income Tax Regulations issued under Code
                  Section 401(m)(9) regarding the multiple use of the
                  alternative limitation set forth in Sections 401(k) and 401(m)
                  of the Code.

            The preceding Plan Year testing method can only be modified if the
            Plan meets the requirements for changing to current Plan Year
            testing as set forth in Internal Revenue Service Notice 98-1, or any
            successor future guidance issued by the Internal Revenue Service.

            The above subsections (i) and (ii) shall be subject to the
            distribution provisions of the last paragraph of Section 3.12(f).

            If the Average Actual Deferral Percentage for the group of eligible
            Highly Compensated Employees exceeds the limitations set forth in
            the preceding paragraph, the amount of excess Before-Tax
            Contributions for a Highly Compensated Employee shall be determined
            by "leveling" (as hereafter defined), the highest Before-Tax
            Contributions made by Highly Compensated Employees until the Average
            Actual Deferral Percentage test for the group of eligible Highly
            Compensated Employees complies with such limitations. For purposes
            of this paragraph, "leveling" means reducing the Before-Tax
            Contribution of the Highly Compensated Employee with the highest
            Before-Tax Contribution amount to the extent required to:

            (A)   enable the Average Actual Deferral Percentage limitations to
                  be met, or

            (B)   cause such Highly Compensated Employee's Before-Tax
                  Contribution amount to equal the dollar amount of the
                  Before-Tax Contribution of the Highly Compensated Employee
                  with the next highest Before-Tax Contribution amount by
                  distribution of such excess Before-Tax Contributions, as
                  described below, to the Highly Compensated Employee, whose
                  Before-Tax Contributions equal the highest dollar amount,

            and repeating such process until the Average Actual Deferral
            Percentage for the group of eligible Highly Compensated Employees
            complies with the Average Actual Deferral Percentage limitations.

            If Before-Tax Contributions made on behalf of a Participant during
            any Plan Year exceed the maximum amount applicable to a Participant
            as set forth above, any such contributions, including any earnings
            thereon as determined under Section 3.9, shall be characterized as
            Compensation payable to the Participant and shall be paid to the


--------------------------------------------------------------------------------
787                                  17              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            Participant from his Before-Tax Contribution Account no later than
            two and one-half (2-1/2) months after the close of such Plan Year.

            If Before-Tax Contributions during any Plan Year exceed the maximum
            amount applicable to a Participant as set forth above, any Matching
            Contributions, including any earnings thereon as determined under
            Section 3.9, that are attributable to Before-Tax Contributions which
            are returned to the Participant as provided hereunder, shall be
            treated as Forfeitures under Section 4.2.

            In the event that the Plan satisfies the requirements of Section
            401(k), 401(a)(4) or 410(b) of the Code only if aggregated with one
            or more other plans, or if one or more other plans satisfy the
            requirements of Section 401(k), 401(a)(4) or 410(b) of the Code only
            if aggregated with the Plan, then this Section 3.2 shall be applied
            by determining the Actual Deferral Percentages of Eligible Employees
            as if all such plans were a single plan.

            If any Highly Compensated Employee is a Participant in two (2) or
            more cash or deferred arrangements of the Employer, for purposes of
            determining the Actual Deferral Percentage with respect to such
            Highly Compensated Employee, all cash or deferred arrangements shall
            be treated as one (1) cash or deferred arrangement.

      (b)   Before-Tax Contributions under this Plan, and elective deferrals (as
            defined under Section 402(g) of the Code) under all other plans,
            contracts or arrangements of the Employer made on behalf of any
            Participant during the 1997 Plan Year shall not exceed nine thousand
            five hundred dollars ($9,500). During the 1998 and 1999 Plan Years,
            such amount shall be increased to ten thousand dollars ($10,000).
            During the 2000 and 2001 Plan Years, such amount shall be increased
            to ten thousand five hundred dollars ($10,500). For Plan Years
            commencing after December 31, 2001, Before-Tax Contributions and
            elective deferrals (as defined under Section 402(g) of the Code)
            under all other plans, contracts or arrangements of the Employer
            shall be further adjusted as prescribed by the Secretary of the
            Treasury under Section 415(d) of the Code. This Section 3.2(b) shall
            be subject to the distribution provisions of the last paragraph of
            Section 3.12(f).

      (c)   If Before-Tax Contributions made on behalf of a Participant during
            any Plan Year exceed the dollar limitation set forth in subsection
            (b), such contributions, including any earnings thereon as
            determined under Section 3.9, shall be characterized as Compensation
            payable to the Participant and shall be paid to the Participant from
            his Before-Tax Contribution Account no later than April 15th of the
            calendar year following the close of such Plan Year.

            If Before-Tax Contributions during any Plan Year exceed the maximum
            dollar amount applicable to a Participant as set forth in subsection
            (b), any Matching Contributions, including any earnings thereon as
            determined under Section 3.9, that are attributable to


--------------------------------------------------------------------------------
787                                  18              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            Before-Tax Contributions which are returned to the Participant as
            provided hereunder, shall be treated as Forfeitures under Section
            4.2.

      (d)   Subject to the requirements of Sections 401(a) and 401(k) of the
            Code, the maximum amounts under subsections (a) and (b) may differ
            in amount or percentage as between individual Participants or
            classes of Participants, and any Compensation Reduction Agreement
            may be terminated, amended, or suspended without the consent of any
            such Participant or Participants in order to comply with the
            provisions of such subsections (a) and (b).

3.3   Changes in Before-Tax Contributions

      Unless (a) an election is made to the contrary, or (b) a Participant
      receives a Hardship distribution pursuant to Section 7.4(c)(iii), the
      percentage of Before-Tax Contributions made under Section 3.1 shall
      continue in effect so long as the Participant has a Compensation Reduction
      Agreement in force. A Participant may, by completing the applicable form,
      prospectively increase or decrease the rate of Before-Tax Contributions
      made on his behalf to any of the percentages authorized under Section 3.1
      or suspend Before-Tax Contributions without withdrawing from participation
      in the Plan. Such form must be filed at least ten (10) days prior to the
      first day of the payroll period with respect to which such change is to
      become effective. A Participant who has Before-Tax Contributions made on
      his behalf suspended may resume such contributions by completing and
      filing the applicable form. Not more often than once in any calendar
      quarter may an election be made which would prospectively increase,
      decrease, suspend or resume Before-Tax Contributions made on behalf of a
      Participant. A Participant may terminate his Before-Tax Contributions at
      any time.

      Notwithstanding the foregoing, a Participant who receives a Hardship
      distribution pursuant to Section 7.4(c)(iii) shall have his Compensation
      Reduction Agreement deemed null and void and all Before-Tax Contributions
      made on behalf of such Participant shall be suspended until the later to
      occur of: (i) twelve (12) months after receipt of the Hardship
      distribution and (ii) the first payroll period which occurs ten (10) days
      following the completion and filing of a Compensation Reduction Agreement
      authorizing the resumption of Before-Tax Contributions to be made on his
      behalf. Before-Tax Contributions following a Hardship distribution made
      pursuant to Section 7.4(c)(iii) shall be subject to the following
      limitations:

      (A)   Before-Tax Contributions for the Participant's taxable year
            immediately following the taxable year of the Hardship distribution
            shall not exceed the applicable limit under Section 402(g) of the
            Code for such next taxable year less the amount of such
            Participant's Before-Tax Contributions for the taxable year of the
            Hardship distribution, and

      (B)   the percentage of Before-Tax Contributions for the twelve (12) month
            period following the mandatory twelve (12) month suspension period
            shall not exceed the percentage of


--------------------------------------------------------------------------------
787                                  19              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            Before-Tax Contributions made on behalf of the Participant as set
            forth in the last Compensation Reduction Agreement in effect prior
            to the Hardship distribution.

      Before-Tax Contributions based on Compensation for the period during which
      such contributions had been suspended or decreased may not be made up at a
      later date.

3.4   Matching Contributions

      (a)   The Employer shall make contributions on behalf of each Participant
            in an amount equal to fifty percent (50%) of such Participant's
            Before-Tax Contribution. Commencing January 1, 2002, the Employer
            shall make contributions on behalf of each Participant, in an amount
            equal to one hundred percent (100%) of such Participant's Before-Tax
            Contributions, up to the first four percent (4%) of the
            Participant's Compensation.

      (b)   Matching Contributions shall be credited to the Participant's
            Matching Contribution Account and shall be invested in accordance
            with Article VI of the Plan.

      (c)   If a Participant terminates his Before-Tax Contributions, Matching
            Contributions attributable to such contributions will also cease. If
            Before-Tax Contributions are suspended, the Matching Contributions
            attributable to such contributions will be suspended for the same
            period. Subject to the limitations set forth in subsection (a), if
            Before-Tax Contributions are increased or decreased, Matching
            Contributions attributable to such contributions will be increased
            or decreased during the same period. Matching Contributions for the
            period during which Before-Tax Contributions had been suspended or
            decreased may not be made up at a later date.

      (d)   Matching Contributions may be reviewed and modified by the
            Employer's Board from time to time. Commencing January 1, 2002, this
            Section 3.4(d) shall no longer apply.

3.5   Special Contributions

      In addition to any other contributions, the Employer may, in its
      discretion, make Special Contributions for a Plan Year to the Before-Tax
      Contribution Account of any Eligible Employees. Such Special Contributions
      may be limited to the amount necessary to insure that the Plan complies
      with the requirements of Section 401(k) of the Code. The Special
      Contributions made on behalf of a Participant shall be invested in
      accordance with Article VI of the Plan.

      The Employer may provide that Special Contributions be made only on behalf
      of each Eligible Employee who is a Non-Highly Compensated Employee on the
      last day of the Plan Year. Such Special Contributions shall be allocated
      in proportion to each such Eligible Employee's Compensation for the Plan
      Year.

      Any other provision of the Plan to the contrary notwithstanding, no
      Matching Contributions shall be made with respect to any Special
      Contributions.


--------------------------------------------------------------------------------
787                                  20              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

3.6   Discretionary Employer Contributions

      Subject to the limitations of Section 3.12, the Employer may, in its sole
      and absolute discretion, make Discretionary Employer Contributions to the
      Plan for a Plan Year. Discretionary Employer Contributions shall be
      allocated on an annual basis in an amount up to fifteen percent (15%)
      determined by the Board, as a percentage of the Compensation of each
      Eligible Employee who is in the employ of the Employer on the last day of
      the Plan Year.

      Notwithstanding the foregoing, an Eligible Employee who incurs a
      Termination of Service prior to the last day of the Plan Year for reasons
      of death, Disability or retirement on a Retirement Date shall receive a
      Discretionary Employer Contribution pursuant to the foregoing paragraph,
      for the Plan Year up to the date of his Termination of Service.

      The Discretionary Employer Contributions allocated to each Eligible
      Employee shall be credited to such Participant's Discretionary Employer
      Contribution Account and shall be invested in accordance with Article VI
      of the Plan. Any and all withdrawals, distributions or payments from a
      Participant's Discretionary Employer Contribution Account shall be made in
      accordance with Article VII, or Article VIII of the Plan, whichever is
      applicable.

3.7   Limitation on Matching Contributions

      This Section 3.7 shall apply with respect to Plan Years beginning prior to
      January 1, 2002. Commencing January 1, 2002, the alternative method of
      meeting the non-discrimination requirements set forth in Section
      401(m)(11) of the Code shall apply.

      Commencing January 1, 1997, the Actual Contribution Percentage made on
      behalf of a Participant who is a Highly Compensated Employee shall be
      limited so that the Average Actual Contribution Percentage for the group
      of such Highly Compensated Employees for the Plan Year shall not exceed
      the greater of:

      (a)   the Average Actual Contribution Percentage for the group of Eligible
            Employees who were Non-Highly Compensated Employees for the
            preceding Plan Year multiplied by 1.25; or

      (b)   the Average Actual Contribution Percentage for the group of Eligible
            Employees who were Non-Highly Compensated Employees for the
            preceding Plan Year, multiplied by two (2); provided, that the
            difference in the Average Actual Contribution Percentage for Highly
            Compensated Employees and Non-Highly Compensated Employees does not
            exceed two percent (2%). Use of this alternative limitation shall be
            subject to the provisions of Income Tax Regulations issued under
            Code Section 401(m)(9) regarding the multiple use of the alternative
            limitation set forth in Sections 401(k) and 401(m) of the Code.


--------------------------------------------------------------------------------
787                                  21              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      The preceding Plan Year testing method can only be modified if the Plan
      meets the requirements for changing to current Plan Year testing as set
      forth in Internal Revenue Service Notice 98-1, or any successor future
      guidance issued by the Internal Revenue Service.

      The above subsections (a) and (b) shall be subject to the distribution
      provisions of the last paragraph of Section 3.12(f).

      If the Average Actual Contribution Percentage for the group of eligible
      Highly Compensated Employees exceeds the limitations set forth in the
      preceding paragraph, the amount of excess Matching Contributions for a
      Highly Compensated Employee shall be determined by "leveling" (as
      hereafter defined) the highest Matching Contributions until the Average
      Actual Contribution Percentage test for the group of eligible Highly
      Compensated Employees complies with such limitations. For purposes of this
      paragraph, "leveling" means reducing the Matching Contributions made on
      behalf of the Highly Compensated Employee with the highest Matching
      Contribution amount to the extent required to:

      (i)   enable the Average Actual Contribution Percentage limitations to be
            met, or

      (ii)  cause such Highly Compensated Employee's Matching Contribution
            amount to equal the dollar amount of the Matching Contribution made
            on behalf of the Highly Compensated Employee with the next highest
            Matching Contribution amount

      and repeating such process until the Average Actual Contribution
      Percentage for the group of eligible Highly Compensated Employees complies
      with the Average Actual Contribution Percentage limitations.

      If Matching Contributions during any Plan Year exceed the maximum amount
      applicable to a Participant as set forth above, any such contributions,
      including any earnings thereon as determined under Section 3.9, shall,
      whether or not vested, be treated as Forfeitures under Section 4.2.

      In the event that the Plan satisfies the requirements of Section 401(m),
      401(a)(4) or 410(b) of the Code only if aggregated with one or more other
      plans, or if one or more other plans satisfy the requirements of Section
      401(m), 401(a)(4) or 410(b) of the Code only if aggregated with the Plan,
      then this Section 3.7 shall be applied by determining the Actual
      Contribution Percentages of Eligible Employees as if all such plans were a
      single plan.

      If any Highly Compensated Employee is a Participant in two (2) or more
      plans of the Employer, for purposes of determining the Actual Contribution
      Percentage with respect to such Highly Compensated Employee, all such
      plans shall be treated as one (1) plan.


--------------------------------------------------------------------------------
787                                  22              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

3.8   Aggregate Limit; Multiple Use of Alternative Limitation

      This Section 3.8 shall apply with respect to Plan Years beginning prior to
      January 1, 2002. Commencing January 1, 2002, the alternative method of
      meeting the non-discrimination requirements set forth in Sections
      401(k)(12) and 401(m)(11) of the Code shall apply.

      Commencing January 1, 1997, multiple use of the alternative limitation in
      determining the Average Actual Deferral Percentage and Average Actual
      Contribution Percentage shall not be permitted.

      Multiple use of the alternative limitation occurs if, for the group of
      Eligible Employees who are Highly Compensated Employees, the sum of the
      Average Actual Deferral Percentage and the Average Actual Contribution
      Percentage exceeds the Aggregate Limit.

      For purposes of this Section 3.8, Aggregate Limit shall mean the greater
      of (a) or (b), where (a) and (b) are as follows:

      (a)   the sum of:

            (i)   one hundred twenty-five percent (125%) of the greater of:

                  (A)   the Average Actual Deferral Percentage for the group of
                        Eligible Employees who were Non-Highly Compensated
                        Employees for the preceding Plan Year; or

                  (B)   the Average Actual Contribution Percentage for the group
                        of Eligible Employees who were Non-Highly Compensated
                        Employees for the preceding Plan Year; and

            (ii)  two (2) plus the lesser of subsection (a)(i)(A) or (a)(i)(B).
                  In no event shall this amount exceed two hundred percent
                  (200%) of the lesser of subsection (a)(i)(A) or (a)(i)(B).

      (b)   the sum of:

            (i)   one hundred twenty-five percent (125%) of the lesser of:

                  (A)   the Average Actual Deferral Percentage for the group of
                        Eligible Employees who were Non-Highly Compensated
                        Employees for the preceding Plan Year; or

                  (B)   the Average Actual Contribution Percent age for the
                        group of Eligible Employees who were Non-Highly
                        Compensated Employees for the preceding Plan Year; and


--------------------------------------------------------------------------------
787                                  23              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            (ii)  two (2) plus the greater of subsection (b)(i)(A) or (b)(i)(B).
                  In no event shall this amount exceed two hundred percent
                  (200%) of the greater of subsection (b)(i)(A) or (b)(i)(B).

      If multiple use of the alternative limitation occurs, the excess
      Before-Tax Contributions for Highly Compensated Employees under the Plan
      shall be reduced in accordance with Section 3.2(a).

3.9   Interest on Excess Contributions

      In the event Before-Tax Contributions and/or Matching Contributions made
      on behalf of a Participant during a Plan Year exceed the maximum allowable
      amount as described in Section 3.2(a), 3.2(b) or 3.7 ("Excess
      Contributions") and such Excess Contributions and earnings thereon are
      payable to the Participant under the applicable provisions of the Plan,
      earnings on such Excess Contributions for the period commencing with the
      first day of the Plan Year in which the Excess Contributions were made and
      ending with the date of payment to the Participant ("Allocation Period")
      shall be determined in accordance with the provisions of this Section 3.9.

      The earnings allocable to excess Before-Tax Contributions for an
      Allocation Period shall be equal to the sum of (a) plus (b) where (a) and
      (b) are determined as follows:

      (a)   The amount of earnings attributable to the Participant's Before-Tax
            Contribution Account for the Plan Year multiplied by a fraction, the
            numerator of which is the excess Before-Tax Contributions and
            Special Contributions for the Plan Year, and the denominator of
            which is the sum of (i) the Net Value of the Participant's
            Before-Tax Contribution Account as of the last day of the
            immediately preceding Plan Year and (ii) the contributions
            (including the Excess Contributions) made to the Before-Tax
            Contribution Account on the Participant's behalf during such Plan
            Year.

      (b)   The amount of earnings attributable to the Participants Before-Tax
            Contribution Account for the period commencing with the first day of
            the Plan Year in which payment is made to the Participant and ending
            with the date of payment to the Participant multiplied by a
            fraction, the numerator of which is the excess Before-Tax
            Contributions and Special Contributions made to the Before-Tax
            Contribution Account on the Participant's behalf during the Plan
            Year immediately preceding the Plan Year in which the payment is
            made to the Participant, and the denominator of which is the Net
            Value of the Participant's Before-Tax Contribution Account on the
            first day of the Plan Year in which the payment is made to the
            Participant.

      The earnings allocable to excess Matching Contributions for an Allocation
      Period shall be equal to the sum of (A) and (B) where (A) and (B) are
      determined as follows:


--------------------------------------------------------------------------------
787                                  24              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      (A)   The amount of earnings attributable to the Participants Matching
            Contribution Account for the Plan Year multiplied by a fraction, the
            numerator of which is the excess Matching Contributions for the Plan
            Year, and the denominator of which is the sum of (I) the Net Value
            of the Participant's Matching Contribution Account as of the last
            day of the immediately preceding Plan Year and (II) the
            contributions (including the Excess Contributions) made to the
            Matching Contribution Account on the Participant's behalf during
            such Plan Year.

      (B)   The amount of earnings attributable to the Participants Matching
            Contribution Account for the period commencing with the first day of
            the Plan Year in which payment is made to the Participant and ending
            with the date of payment to the Participant multiplied by a
            fraction, the numerator of which is the excess Matching
            Contributions made to the Matching Contribution Account on the
            Participant's behalf during the Plan Year immediately preceding the
            Plan Year in which the payment is made to the Participant, and the
            denominator of which is the Net Value of the Participant's Matching
            Contribution Account on the first day of the Plan Year in which the
            payment is made to the Participant.

3.10  Payment of Contributions to the Trust and Separate Agency

      As soon as possible after each payroll period, but not less often than
      once a month, the Employer shall deliver (a) to the Trustees: (i) the
      Before-Tax Contributions required to be made to the Trust during such
      payroll period under the applicable Compensation Reduction Agreements and
      (ii) the amount of all Matching Contributions required to be made to the
      Trust for such payroll period and (b) to the Separate Agency: (i) the
      Before-Tax Contributions required to be made to the Separate Agency during
      such payroll period under the applicable Compensation Reduction Agreement,
      and (ii) the amount of all Matching Contributions required to be made to
      the Separate Agency during such payroll period.

      Special Contributions, Discretionary Employer Contributions and effective
      January 1, 2001, Nonelective Employer Contributions to the Trust and to
      the Separate Agency shall be forwarded by the Employer to the Trustees and
      to the Separate Agency no later than the time for filing the Employer's
      federal income tax return, plus any extensions thereon, for the Plan Year
      to which they are attributable.

3.11  Rollover Contributions

      Subject to such terms and conditions as may from time to time be
      established by the Committee, the Trustees and the Separate Agency, an
      Employee, whether or not a Participant, may contribute a Rollover
      Contribution to the Plan Fund; provided, however, that such Employee shall
      submit a written certification, in form and substance satisfactory to the
      Committee, that the contribution qualifies as a Rollover Contribution. The
      Committee shall be entitled to rely on such certification and shall accept
      the contribution on behalf of the Trustees.


--------------------------------------------------------------------------------
787                                  25              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      Rollover Contributions shall be credited to an Employee's Rollover
      Contribution Account and shall be invested in accordance with Article VI
      of the Plan.

3.12  Section 415 Limits on Contributions

      (a)   For purposes of this Section 3.12, the following terms and phrases
            shall have the meanings hereafter ascribed to them:

            (i)   "Annual Additions" shall mean the sum of the following amounts
                  credited to a Participant's Accounts for the Limitation Year:
                  (A) Employer contributions, including Before-Tax
                  Contributions, Matching Contributions, Special Contributions,
                  Discretionary Employer Contributions and Nonelective Employer
                  Contributions; (B) any Employee contributions; (C)
                  forfeitures; and (D) (1) amounts allocated to an individual
                  medical account, as defined in Section 415(l)(2) of the Code,
                  which is part of a pension or annuity plan maintained by the
                  Employer and (2) amounts derived from contributions, paid or
                  accrued, which are attributable to post-retirement medical
                  benefits allocated to the separate account of a key employee,
                  as defined in Section 419A(d)(3) of the Code, under a welfare
                  benefit fund as defined in Section 419(e) of the Code,
                  maintained by the Employer are treated as Annual Additions.
                  Annual Additions include the following contributions credited
                  to a Participant's Accounts for the Limitation Year,
                  regardless of whether such contributions have been distributed
                  to the Participant:

                  (I)   Before-Tax Contributions which exceed the limitations
                        set forth in Section 3.2(a);

                  (II)  Before-Tax Contributions made on behalf of a Highly
                        Compensated Employee which exceed the limitations set
                        forth in Section 3.2(b); and

                  (III) Matching Contributions made on behalf of a Highly
                        Compensated Employee which exceed the limitations set
                        forth in Section 3.7.

            (ii)  "Current Accrued Benefit" shall mean a Participant's annual
                  accrued benefit under a defined benefit plan, determined in
                  accordance with the meaning of Section 415(b)(2) of the Code,
                  as if the Participant had separated from service as of the
                  close of the last Limitation Year beginning before January 1,
                  1987. In determining the amount of a Participant's Current
                  Accrued Benefit, the following shall be disregarded:

                  (A)   any change in the terms and conditions of the defined
                        benefit plan after May 5, 1986; and

                  (B)   any cost of living adjustment occurring after May 5,
                        1986.


--------------------------------------------------------------------------------
787                                  26              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            (iii) "Defined Benefit Plan" and "Defined Contribution Plan" shall
                  have the meanings set forth in Section 415(k) of the Code.

            (iv)  "Defined Benefit Plan Fraction" for a Limitation Year shall
                  mean a fraction, (A) the numerator of which is the aggregate
                  projected annual benefit (determined as of the last day of the
                  Limitation Year) of the Participant under all defined benefit
                  plans (whether or not terminated) maintained by the Employer,
                  and (B) the denominator of which is the lesser of: (I) the
                  product of 1.25 (or such adjustment as required under Section
                  12.4) and the dollar limitation in effect under Section
                  415(b)(1)(A) of the Code, adjusted as prescribed by the
                  Secretary of the Treasury under Section 415(d) of the Code, or
                  (II) the product of 1.4 and the amount which may be taken into
                  account with respect to such Participant under Section
                  415(b)(1)(B) of the Code for such Limitation Year.
                  Notwithstanding the above, if the Participant was a
                  participant in one or more defined benefit plans of the
                  Employer in existence on May 6, 1986, the dollar limitation of
                  the denominator of this fraction will not be less than the
                  Participant's Current Accrued Benefit.

            (v)   "Defined Contribution Plan Fraction" for a Limitation Year
                  shall mean a fraction, (A) the numerator of which is the sum
                  of the Participant's Annual Additions under all defined
                  contribution plans (whether or not terminated) maintained by
                  the Employer for the current year and all prior Limitation
                  Years (including annual additions attributable to the
                  Participant's nondeductible employee contributions to all
                  defined benefit plans (whether or not terminated) maintained
                  by the Employer), and (B) the denominator of which is the sum
                  of the maximum aggregate amounts for the current year and all
                  prior Limitation Years with the Employer (regardless of
                  whether a defined contribution plan was maintained by the
                  Employer). "Maximum aggregate amounts" shall mean the lesser
                  of (I) the product of 1.25 (or such adjustment as required
                  under Section 12.4) and the dollar limitation in effect under
                  Section 415(c)(1)(A) of the Code, adjusted as prescribed by
                  the Secretary of the Treasury under Section 415(d) of the
                  Code, or (II) the product of 1.4 and the amount that may be
                  taken into account under Section 415(c)(1)(B) of the Code;
                  provided, however, that the Committee may elect, on a uniform
                  and nondiscriminatory basis, to apply the special transition
                  rule of Section 415(e)(7) of the Code applicable to Limitation
                  Years ending before January 1, 1983 in determining the
                  denominator of the Defined Contribution Plan Fraction.

                  If the Employee was a Participant as of the end of the first
                  day of the first Limitation Year beginning after December 31,
                  1986, in one or more defined contribution plans maintained by
                  the Employer which were in existence on May 6, 1986, the
                  numerator of this fraction will be adjusted if the sum of this
                  fraction and the defined benefit fraction would otherwise
                  exceed 1.0 under the terms of


--------------------------------------------------------------------------------
787                                  27              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

                  this Plan. Under the adjustment, an amount equal to the
                  product of (1) the excess of the sum of the fractions over 1.0
                  times (2) the denominator of this fraction, will be
                  permanently subtracted from the numerator of this fraction.
                  The adjustment is calculated using the fractions as they would
                  be computed as of the end of the last Limitation Year
                  beginning before January 1, 1987, and disregarding any changes
                  in the terms and conditions of the Plan made after May 5,
                  1986, but using the Section 415 limitation applicable to the
                  first Limitation Year beginning on or after January 1, 1987.
                  The annual addition for any Limitation Year beginning before
                  January 1, 1987, shall not be recomputed to treat all Employee
                  contributions as Annual Additions.

            (vi)  "Limitation Year" shall mean the calendar year.

            (vii) "Section 415 Compensation" shall be with respect to a Plan
                  Year commencing January 1, 1997, a Participant's remuneration
                  as defined in Income Tax Regulations Sections 1.415-2(d)(2),
                  (3) and (6). For purposes of this Section, effective for Plan
                  Years commencing after December 31, 1997, Section 415
                  Compensation shall include (A) any elective deferral (as
                  defined in Section 402(g)(3) of the Code, and (B) any amount
                  which is contributed or deferred by the Employer at the
                  election of the Employee and which is not includable in the
                  gross income of the Employee by reason of Section 125 or 457
                  of the Code.

                  For purposes of this Section 3.12(a)(vii), effective for
                  Limitation Years commencing on or after January 1, 1998, for
                  purposes of applying the Limitations described in this Section
                  3.12, compensation paid or made available during such
                  Limitation Years shall include elective amounts that are not
                  includable in the gross income of an Employee by reason of
                  Section 132(f)(4) of the Code.

      (b)   For purposes of applying the Section 415 limitations, the Employer
            and all members of a controlled group of corporations (as defined
            under Section 414(b) of the Code as modified by Section 415(h) of
            the Code), all commonly controlled trades or businesses (as defined
            under Section 414(c) of the Code as modified by Section 415(h) of
            the Code), all affiliated service groups (as defined under Section
            414(m) of the Code) of which the Employer is a member, any leasing
            organization (as defined under Section 414(n) of the Code) that
            employs any person who is considered an Employee under Section
            414(n) of the Code and any other group provided for under any and
            all Income Tax Regulations promulgated by the Secretary of the
            Treasury under Section 414(o) of the Code, shall be treated as a
            single employer.

      (c)   If the Employer maintains more than one qualified Defined
            Contribution Plan on behalf of its Employees, such plans shall be
            treated as one Defined Contribution Plan for purposes of applying
            the Section 415 limitations of the Code.


--------------------------------------------------------------------------------
787                                  28              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      (d)   Notwithstanding anything contained in the Plan to the contrary, in
            no event shall the Annual Additions to a Participant's Accounts for
            a Limitation Year exceed the lesser of:

            (i)   thirty thousand dollars ($30,000), and with respect to a
                  Limitation Year commencing on and after January 1, 1995, as
                  adjusted in multiples of five thousand dollars ($5,000) for
                  increases in the cost-of-living as prescribed by the Secretary
                  of the Treasury under Section 415(d) of the Code; or

            (ii)  twenty-five percent (25%) of the Participants Section 415
                  Compensation for such Limitation Year. For purposes of this
                  subsection (d)(ii), Section 415 Compensation shall not include
                  (A) any contribution for medical benefits within the meaning
                  of Section 419A(f)(2) of the Code after separation from
                  service, which is otherwise treated as an Annual Addition, and
                  (B) any amount otherwise treated as an Annual Addition under
                  Section 415(l)(1) of the Code.

      (e)   If, as a result of the allocation of forfeitures, a reasonable error
            in estimating a Participant's annual Compensation, a reasonable
            error in determining the amount of elective deferrals that may be
            made with respect to any Participant, or as otherwise permitted by
            the Internal Revenue Service, the Annual Additions to a
            Participant's Accounts for a Limitation Year exceed the limitation
            set forth in subsection (d) above during the Limitation Year, any or
            all of the following contributions on behalf of such Participant
            shall be immediately adjusted to that amount which will result in
            such Annual Additions not exceeding the limitation set forth in
            subsection (d):

            (i)   Discretionary Employer Contributions;

            (ii)  Nonelective Employer Contributions;

            (iii) Before-Tax Contributions;

            (iv)  Special Contributions; and

            (v)   Matching Contributions.

      (f)   If the Annual Additions to a Participant's Accounts for a Limitation
            Year exceed the limitations set forth in subsection (d) above at the
            end of a Limitation Year, such excess amounts shall not be treated
            in accordance with the following:

            (i)   such excess amounts shall be used to reduce the Before-Tax
                  Contributions, Discretionary Employer Contributions, Matching
                  Contributions and/or Special Contributions to be made on
                  behalf of such Participant in the succeeding Limitation Year,
                  provided that such Participant is an Eligible Employee during
                  such succeeding Limitation Year. If such Participant is not an
                  Eligible Employee or ceases to be an Eligible Employee during
                  such succeeding Limitation Year, any remaining excess amounts
                  from the preceding Limitation Year shall be


--------------------------------------------------------------------------------
787                                  29              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

                  allocated during such succeeding Limitation Year to each
                  Participant then actively participating in the Plan. Such
                  allocation shall be in proportion to the Before-Tax
                  Contributions made to date on his behalf for such Limitation
                  Year, or the prior Limitation Year with respect to an
                  allocation as of the beginning of a Limitation Year, before
                  any other contributions are made in such succeeding Limitation
                  Year; or

            (ii)  such excess amounts may be reduced by the distribution of such
                  Participant's Before-Tax Contributions to such Participant.

            The Employer will, at the end of the Limitation Year in which such
            excess amounts were made, choose the manner in which to treat such
            excess amounts on a uniform and nondiscriminatory basis on behalf of
            all affected Participants. If such excess amounts are reduced by the
            distribution described in subsection (ii), the amounts of such
            distribution shall not be taken into account for purposes of
            Sections 3.2(a)(i) and (ii), 3.7(a) and (b), or in determining the
            limitation in Section 3.2(b). In addition, any Matching
            Contributions attributable to such amounts shall constitute
            Forfeitures as described in Section 4.2.

      (g)   If a Participant participates in both (i) the Plan and/or any other
            defined contribution plan maintained by the Employer and (ii) any
            defined benefit plan or plans maintained by the Employer, the sum of
            the Defined Contribution Plan Fraction and the Defined Benefit Plan
            Fraction shall not exceed the sum of l.0. This subsection (g) shall
            not apply with respect to Plan Years beginning on or after January
            1, 2000.

      (h)   If, for any Plan Year commencing prior to January 1, 2000, the sum
            determined under subsection (g) for any Participant exceeds 1.0, the
            Defined Benefit Plan Fraction of such Participant as provided in the
            defined benefit plan or plans maintained by the Employer shall be
            reduced in order that such sum shall not exceed 1.0.

3.13  Nonelective Employer Contributions

      Effective with respect to the period beginning January 1, 2001, in
      addition to other contributions, if any, the Employer will make a
      Nonelective Employer Contribution in accordance with Section 401(k)(12) of
      the Code, for a Plan Year, in order to meet the nondiscrimination
      requirements of Code Section 401(k). For any Plan Year in which the
      Employer makes a Nonelective Employer Contribution, such contribution
      shall be in the amount of two percent (2%) of each Eligible Employee's
      Compensation who is employed by the Employer on the last day of the Plan
      Year.

      Nonelective Employer Contributions made to the Plan on behalf of each
      Eligible Employee, shall be credited to such Eligible Employee's
      Nonelective Employer Contribution Account and shall be invested in
      accordance with Article VI of the Plan. Any and all withdrawals,
      distributions or


--------------------------------------------------------------------------------
787                                  30              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      payments from a Participant's Nonelective Employer Contribution Account
      shall be made in accordance with Article VII, or Article VIII of the Plan,
      whichever is applicable.


--------------------------------------------------------------------------------
787                                  31              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

                                   ARTICLE IV -
                             VESTING AND FORFEITURES

4.1   Vesting

      (a)   An Employee shall always be fully vested in the Net Value of his
            Before-Tax Contribution Account and the Net Value of his Rollover
            Contribution Account. Commencing January 1, 2002, an Employee shall
            always be fully vested in the Net Value of the portion of his
            Matching Contribution Account which consists of Matching
            Contributions made on and after January 1, 2002, and the earnings
            thereon.

      (b)   A Participant shall become fully vested in the Net Value of that
            portion of his Matching Contribution Account as in effect prior to
            January 1, 2002, the Net Value of his Discretionary Employer
            Contribution Account and the Net Value of his Nonelective Employer
            Contribution Account upon the earlier of such Participant's (i)
            Normal Retirement Age or (ii) termination of employment by reason of
            death, Disability or reaching his Retirement Date.

      (c)   Prior to September 15, 1998, a Participant who is not fully vested
            under subsection (b) shall be vested in the Net Value of his
            Matching Contribution Account and the Net Value of his Matching
            Contribution Account in accordance with the following schedule:

                    Period of Service                          Vested Percentage
                    -----------------                          -----------------

                    Less than 3 years                                  0%
                    3 years but less than 4 years                     20%
                    4 years but less than 5 years                     40%
                    5 years but less than 6 years                     60%
                    6 years but less than 7 years                     80%
                    7 or more years                                  100%

            Effective September 15, 1998, the vesting schedule was amended as
            follows:

                     Period of Service                         Vested Percentage
                     -----------------                         -----------------

                     Less than 1 year                                   0%
                     1 year but less than 2 years                      20%
                     2  years but less than 3 years                    40%
                     3 years but less than 4 years                     60%
                     4 years but less than 5 years                     80%
                     5 or more years                                  100%

            For purposes of determining a Participant's Period of Service under
            this subsection (c) and under Section 4.3, employment with an
            Affiliated Employer shall be deemed employment with the Employer.


--------------------------------------------------------------------------------
787                                  32              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

            For purposes of determining a Participant's vested percentage of the
            Net Value of his Matching Contribution Account and the Net Value of
            his Discretionary Employer Contribution Account, all Periods of
            Service shall be recognized, including, effective October 1, 1989
            and November 19, 1990 respectively, employment with CrossLand
            Savings, FSB and Nassau Federal Savings and Loan Association which
            preceded employment with the Employer.

      (d)   The vested Net Value of a Participant's Matching Contribution
            Account, Discretionary Employer Contribution Account and Nonelective
            Employer Contribution Account shall be determined as follows:

            (i)   the Participant's Matching Contribution Account, Discretionary
                  Employer Contribution Account and Nonelective Employer
                  Contribution Account shall first be increased to include (A)
                  that portion of such Account which had been previously
                  withdrawn in accordance with Sections 7.3 and 7.4 and (B) that
                  portion of such Account which had been borrowed in accordance
                  with Article VIII and is outstanding on the date of this
                  determination;

            (ii)  the applicable vested percentage determined in accordance with
                  subsection (c) shall then be applied to such Account as
                  determined in accordance with clause (i);

            (iii) the amount determined in accordance with clause (ii) shall
                  then be reduced by (A) that portion of such Account which had
                  been previously withdrawn in accordance with Sections 7.2 and
                  7.3 and (B) that portion of such Account which had been
                  borrowed in accordance with Article VIII and is outstanding on
                  the date of this determination.

4.2   Forfeitures

      If a Participant who is not fully vested in the Net Value of his Accounts
      terminates employment, the Units representing the nonvested portion of his
      Accounts shall constitute Forfeitures. Forfeitures shall be treated as
      Matching Contributions, Discretionary Employer Contributions and
      Nonelective Employer Contributions and shall be applied to reduce the
      amount of subsequent Matching Contributions, Discretionary Employer
      Contributions and Nonelective Employer Contributions otherwise required to
      be made.

      With respect to a Participant's Matching Contribution Account, anything in
      Section 4.1 to the contrary notwithstanding, any Matching Contribution
      forfeited in accordance with the sixth paragraph of Section 3.2(a), the
      second paragraph of Section 3.2(c), the sixth paragraph of Section 3.7 or
      the second paragraph of Section 3.12(f), shall be applied to reduce the
      amount of subsequent Matching Contributions otherwise required to be made.


--------------------------------------------------------------------------------
787                                  33              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

      If a former Participant who is not fully vested in the Net Value of his
      Accounts receives a distribution of his vested interest in the Net Value
      of his Accounts and is subsequently reemployed by the Employer prior to
      incurring five (5) consecutive One Year Periods of Severance, he shall
      have the Net Value of his Accounts as of the date he previously terminated
      employment reinstated provided he repays the full amount of his
      distribution in cash or cash equivalents before the end of the five (5)
      consecutive One Year Periods of Severance commencing with the date of
      distribution. The reinstated amount shall be unadjusted by any gains or
      losses occurring subsequent to the Participant's termination of employment
      and prior to repayment of such distribution. Any forfeited amounts
      required to be reinstated hereunder shall be made by an additional
      Employer contribution for such Plan Year. If such former Participant does
      not repay the full amount of his distribution in cash or cash equivalents
      before the end of the five (5) consecutive One Year Periods of Severance
      commencing with the date of distribution, the Net Value of his Accounts as
      of the date he previously terminated employment shall not be reinstated.

      If a former Participant who is not fully vested in the Net Value of his
      Accounts elects to defer distribution of his vested account interest or
      elects to receive installment payments pursuant to Section 7.6(e), the
      nonvested portion of such former Participant's Account shall be forfeited
      as of the date of his Termination of Service; provided, however, that if
      such former Participant is reemployed before incurring five (5)
      consecutive One Year Periods of Severance, the nonvested portion of his
      Accounts shall be reinstated in its entirety, unadjusted by any gains or
      losses occurring subsequent to the distribution.

4.3   Vesting upon Reemployment

      (a)   For purposes of this Section 4.3, "Period of Service" means an
            Employee's Period of Service determined in accordance with Section
            4.1(c).

      (b)   For the purpose of determining a Participant's vested interest in
            the Net Value of his Matching Contribution Account, Discretionary
            Employer Contribution Account and Nonelective Employer Contribution
            Account:

            (i)   if an Employee is not vested in any Matching Contributions
                  and/or Discretionary Employer Contributions and/or Nonelective
                  Employer Contributions, incurs a One Year Period of Severance
                  and again performs an Hour of Service, such Employee shall
                  receive credit for his Periods of Service prior to his One
                  Year Period of Severance only if the number of consecutive One
                  Year Periods of Severance is less than the greater of: (A)
                  five (5) years or (B) the aggregate number of his Periods of
                  Service credited before his One Year Period of Severance.

            (ii)  if a Participant is partially vested in any Matching
                  Contributions and/or Discretionary Employer Contributions
                  and/or Nonelective Employer Contributions, incurs a One Year
                  Period of Severance and again performs an


--------------------------------------------------------------------------------
787                                  34              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

                  Hour of Service, such Participant shall receive credit for his
                  Periods of Service prior to his One Year Period of Severance;
                  provided, however, that after five (5) consecutive One Year
                  Periods of Severance, a former Participant's vested interest
                  in the Net Value of the Matching Contribution Account and/or
                  Discretionary Employer Contribution Account and/or Nonelective
                  Employer Contribution Account attributable to Periods of
                  Service prior to his One Year Period of Severance shall not be
                  increased as a result of his Periods of Service following his
                  reemployment date.

            (iii) if a Participant is fully vested in any Matching Contributions
                  and/or Discretionary Employer Contributions and/or Nonelective
                  Employer Contributions, incurs a One Year Period of Severance
                  and again performs an Hour of Service, such Participant shall
                  receive credit for all his Periods of Service prior to his One
                  Year Period of Severance.


--------------------------------------------------------------------------------
787                                  35              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

                                    ARTICLE V -
                TRUST FUND, INVESTMENT ACCOUNTS AND VOTING RIGHTS

5.1   Trust Fund

      The Employer has adopted the Agreement as the funding vehicle with respect
      to the Investment Accounts. Commencing on the Conversion Date, the
      Employer has adopted the Separate Agreement as the funding vehicle with
      respect to the Employer Stock Fund.

      All contributions forwarded by the Employer to the Trustees pursuant to
      the Agreement shall be held by them in trust and shall be used to purchase
      Units on behalf of the Plan in accordance with the terms and provisions of
      the Agreement. Contributions designated for investment in any Investment
      Account of the Trust Fund shall be allocated proportionately to and among
      the classes of Units so selected for such Investment Account.

      All contributions forwarded by the Employer to the Separate Agency
      pursuant to the Separate Agreement shall be held by them in trust in
      accordance with the terms and provisions of the Separate Agreement.

      All assets of the Plan shall be held for the exclusive benefit of
      Participants, Beneficiaries or other persons entitled to benefits. No part
      of the corpus or income of the Plan Funds shall be used for, or diverted
      to, purposes other than for the exclusive benefit of Participants,
      Beneficiaries or other persons entitled to benefits and for defraying
      reasonable administrative expenses of the Plan, Trust and Separate Agency.
      No person shall have any interest in or right to any part of the earnings
      of the Plan Funds, or any rights in, to or under the Plan Funds or any
      part of its assets, except to the extent expressly provided in the Plan.

      The Trustees and the Separate Agency shall invest and reinvest the Plan
      Fund, and the income therefrom, without distinction between principal and
      income, in accordance with the terms and provisions of the Agreement and
      Separate Agreement, respectively. The Trustees and the Separate Agency may
      maintain such part of the Trust Fund and the Separate Assets, respectively
      in cash uninvested as they shall deem necessary or desirable. The Trustees
      shall be the owner of and have title to all the assets of the Plan Funds
      other than the Separate Assets and shall have full power to manage the
      same, except as otherwise specifically provided in the Agreement. The
      Separate Agency shall be the owner of and shall have title to the Separate
      Assets, and shall have full power to manage the same, except as otherwise
      specifically provided in the Separate Agreement.

5.2   Interim Investments

      The Trustees may temporarily invest any amounts designated for investment
      in any of the Investment Accounts of the Trust Fund identified herein in
      the Investment Account which provides for short-term investments and
      retain the value of such contributions therein pending


--------------------------------------------------------------------------------
787                                  36              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

      the allocation of such values to the Investment Accounts designated for
      investment. The Separate Agency may temporarily invest any amounts in
      short-term investment pending investment in the Employer Stock Fund.

5.3   Account Values

      The Net Value of the Accounts of an Employee means the sum of the total
      Net Value of each Account maintained on behalf of the Employee in the
      Trust and Separate Agency as determined as of the Valuation Date
      coincident with or next following the event requiring the determination of
      such Net Value. The assets of any Account shall consist of the Units
      credited to such Account. The applicable Units shall be valued from time
      to time by the Trustees and Separate Agency, respectively, in accordance
      with the Agreement and Separate Agreement, but not less often than
      monthly. On the basis of such valuations, each Employee's Accounts shall
      be adjusted to reflect the effect of income collected and accrued,
      realized and unrealized profits and losses, expenses and all other
      transactions during the period ending on the applicable Valuation Date.

      Upon receipt by the Trustees of Before-Tax Contributions, Matching
      Contributions, and, if applicable, Discretionary Employer Contributions,
      Rollover Contributions, Special Contributions and Nonelective Employer
      Contributions, and upon receipt by a Separate Agency of any Before-Tax
      Contributions, Matching Contributions, and, if applicable, Discretionary
      Employer Contributions, Rollover Contributions, Special Contributions and
      Nonelective Employer Contributions, such contributions shall be applied to
      purchase for such Employee's Account (a) Units other than Units of the
      Employer Stock Fund, using the value of such Units as of the close of
      business on the date received and (b) Units of the Employer Stock Fund
      using the value of such Units as of the preceding Valuation Date. Whenever
      a distribution is made to a Participant, Beneficiary or other person
      entitled to benefits, the appropriate number of Units credited to such
      Employee shall be reduced accordingly and each such distribution shall be
      charged against the Units of the Investment Accounts of such Employee pro
      rata according to their respective values.

      For the purposes of this Section 5.3, fractions of Units as well as whole
      Units may be purchased or redeemed for the Account of an Employee.

5.4   Voting Rights

      Each Participant with Units in the Employer Stock Fund shall have the
      right to participate confidentially in the exercise of voting rights
      appurtenant to shares held in such Investment Account, provided that such
      person had Units in such Account as of the most recent Valuation Date
      coincident with or preceding the applicable record date for which records
      are available. Such participation shall be achieved by completing and
      filing with the inspector of elections, or such other person who shall be
      independent of the issuer of shares as the Committee shall designate, at
      least ten (10) days prior to the date of the meeting of holders of shares
      at which such voting rights will be exercised, a written direction in the
      form and manner prescribed by the


--------------------------------------------------------------------------------
787                                  37              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

      Committee. The inspector of elections, or other such person designated by
      the Committee shall tabulate the directions given on a strictly
      confidential basis, and shall provide the Committee with only the final
      results of the tabulation. The final results of the tabulation shall be
      followed by the Committee in the direction as to the manner in which such
      voting rights shall be exercised. As to each matter in which the holders
      of shares are entitled to vote:

      (a)   a number of affirmative votes shall be cast equal to the product of:

            (i)   the total number of shares held in the Employer Stock Fund as
                  of the applicable record date; and

            (ii)  a fraction, the numerator of which is the aggregate value (as
                  of the Valuation Date coincident with or immediately preceding
                  the applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that an affirmative vote be
                  cast, and the denominator of which is the aggregate value (as
                  of the Valuation Date coincident with or immediately preceding
                  the applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that an affirmative or negative
                  vote be cast; and

      (b)   a number of negative votes shall be cast equal to the product of:

            (i)   the total number of shares held in the Employer Stock Fund as
                  of the applicable record date; and

            (ii)  a fraction, the numerator of which is the aggregate value (as
                  of the Valuation Date coincident with or immediately preceding
                  the applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that a negative vote be cast,
                  and the denominator of which is the aggregate value (as of the
                  Valuation Date coincident with or immediately preceding the
                  applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that an affirmative or negative
                  vote be cast.

      The Committee shall furnish, or cause to be furnished, to each person with
      Units in the Employer Stock Fund, all annual reports, proxy materials and
      other information known to have been furnished by the issuer of the shares
      or by any proxy solicitor, to the holders of shares.

5.5   Tender Offers and Other Offers

      Each Participant with Units in the Employer Stock Fund shall have the
      right to participate confidentially in the response to a tender offer, or
      any other offer, made to the holders of shares generally, to purchase,
      exchange, redeem or otherwise transfer shares; provided that such person
      has Units in the Employer Stock Fund as of the Valuation Date coincident
      with or immediately preceding the first day for delivering shares or
      otherwise responding to such tender or other offer. Such participation
      shall be achieved by completing and filing with the inspector of
      elections, or such other person who shall be independent of the issuer of
      shares as the


--------------------------------------------------------------------------------
787                                  38              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

      Committee shall designate, at least ten (10) days prior to the last day
      for delivering shares or otherwise responding to such tender or other
      offer, a written direction in the form and manner prescribed by the
      Committee. The inspector of elections, or other such person designated by
      the Committee shall tabulate the directions given on a strictly
      confidential basis, and shall provide the Committee with only the final
      results of the tabulation. The final results of the tabulation shall be
      followed by the Committee in the direction as to the number of shares to
      be delivered. On the last day for delivering shares or otherwise
      responding to such tender or other offer, a number of shares equal to the
      product of:

      (a)   the total number of shares held in the Employer Stock Fund; and

      (b)   a fraction, the numerator of which is the aggregate value (as of the
            Valuation Date coincident with or immediately preceding the first
            day for delivering shares or otherwise responding to such tender or
            other offer) of the Units in the Employer Stock Fund of all persons
            directing that shares be delivered in response to such tender or
            other offer, and the denominator of which is the aggregate value (as
            of the Valuation Date coincident with or immediately preceding the
            first day for delivering shares or otherwise responding to such
            tender or other offer) of the Units in the Employer Stock Fund of
            all persons directing that shares be delivered or that the delivery
            of shares be withheld;

      shall be delivered in response to such tender or other offer. Delivery of
      the remaining shares then held in the Employer Stock Fund shall be
      withheld. The Committee shall furnish, or cause to be furnished, to each
      person whose Account is invested in whole or in part in the Employer Stock
      Fund, all information concerning such tender offer furnished by the issuer
      of shares, or information furnished by or on behalf of the person making
      the tender or such other offer.

5.6   Separate Assets

      Subject to the terms and conditions of the Agreement and upon approval by
      the Trustees, a designated portion of the assets of the Plan may be held
      as Separate Assets under the Separate Agreement pursuant to investment
      elections made by Plan Participants from time to time. The Trustees shall
      have no responsibility or liability with respect to the management and
      control of any Separate Assets and shall have only those administrative
      duties with respect to such Separate Assets as are set forth in the Plan
      and the Agreement.

5.7   Power to Invest in Employer Securities

      The Committee may direct the Separate Agency to acquire or hold any
      security issued by the Employer or any Affiliated Employer which is a
      "qualifying employer security" as such term is defined under ERISA and to
      invest that portion of the assets of the Plan Funds in such securities.


--------------------------------------------------------------------------------
787                                  39              Carver Federal Savings Bank
<PAGE>

                                                                    Article VI -
                         Investment Directions, Changes of Investment Directions
                                       and Transfers Between Investment Accounts
--------------------------------------------------------------------------------

                                  ARTICLE VI -
             INVESTMENT DIRECTIONS, CHANGES OF INVESTMENT DIRECTIONS
                    AND TRANSFERS BETWEEN INVESTMENT ACCOUNTS

6.1   Investment Directions

      Upon electing to participate, each Participant shall direct that the
      contributions made to his Accounts shall be applied to purchase Units in
      any one or more of the Investment Accounts of the Trust Fund, and
      commencing on the Conversion Date, purchase Units in the Employer Stock
      Fund. Such direction shall indicate the percentage, in multiples of ten
      percent (10%), in which Before-Tax Contributions, Matching Contributions,
      Special Contributions, Discretionary Employer Contributions and Rollover
      Contributions shall be made to the designated Investment Accounts.
      Commencing January 1, 2001, such direction shall indicate the percentage,
      in multiples of one percent (1%), in which Before-Tax Contributions,
      Matching Contributions, Special Contributions, Discretionary Employer
      Contributions, Rollover Contributions and Nonelective Employer
      Contributions shall be made to the designated Investment Accounts.

      To the extent a Participant shall fail to make an investment direction,
      contributions made on his behalf shall be applied to purchase Units in the
      Investment Account which provides for short-term investments.

6.2   Change of Investment Directions

      A Participant may change any investment direction not more often than once
      in any calendar quarter by completing and filing a notice in the form and
      manner prescribed by the Committee at least ten (10) days prior to the
      effective date of such direction. Commencing January 1, 2001, a
      Participant may change any investment direction, at any time, in the form
      and manner prescribed by the Committee either: (a) by completing and
      filing a notice at least ten (10) days prior to the effective date of such
      direction, or (b) by telephone or other electronic medium. Any such change
      shall be subject to the same conditions as if it were an initial direction
      and shall be applied only to any contributions to be invested on or after
      the effective date of such direction.

6.3   Transfers Between Investment Accounts

      By filing a notice in the form and manner prescribed by the Committee at
      least ten (10) days prior to the effective date of such change, a
      Participant or Beneficiary may, not more often than once in any calendar
      quarter, direct that multiples of ten percent (10%) of the Net Value of
      any one or more Investment Accounts be transferred to any one or more of
      the other Investment Accounts. Commencing January 1, 2001, a Participant
      or Beneficiary may, at any time, redirect the investment of his Investment
      Accounts such that a percentage of any one or more Investment Accounts may
      be transferred to any one or more other


--------------------------------------------------------------------------------
787                                  40              Carver Federal Savings Bank
<PAGE>

                                                                    Article VI -
                         Investment Directions, Changes of Investment Directions
                                       and Transfers Between Investment Accounts
--------------------------------------------------------------------------------

      Investment Accounts in the form and manner prescribed by the Committee,
      either: (a) by filing a notice at least ten (10) days prior to the
      effective date of such change, or (b) by telephone or other electronic
      medium. The requisite transfers shall be valued as of the Valuation Date
      on which the direction is received by the Trustees and shall be affected
      within seven (7) days of the Trustees' receipt of such direction.

6.4   Employees Other than Participants

      (a)   Investment Direction

            An Employee who is not a Participant but who has made a Rollover
            Contribution in accordance with the provisions of Section 3.11,
            shall direct, in the form and manner prescribed by the Committee,
            that such contribution be applied to the purchase of Units in any
            one or more of the Investment Accounts, and commencing on the
            Conversion Date, to purchase Units in the Employer Stock Fund. Such
            direction shall indicate the percentage, in multiples of ten percent
            (10%), in which contributions shall be made to the designated
            Investment Accounts. Commencing January 1, 2001, such direction
            shall indicate the percentage, in multiples of one percent (1%), in
            which contributions shall be made to the designated Accounts. To the
            extent any Employee shall fail to make an investment direction, the
            Rollover Contributions shall be applied to the purchase of Units in
            the Investment Account which provides for short-term investments.

      (b)   Transfers Between Investment Accounts

            An Employee who is not a Participant may, subject to the provisions
            of Section 6.3, not more often than once in any calendar quarter,
            direct that multiples of ten percent (10%) of the Net Value of any
            one or more Investment Accounts be transferred to any one or more of
            the other Investment Accounts. Commencing January 1, 2001, an
            Employee who is not a Participant may, subject to the provisions of
            Section 6.3, at any time, redirect the investment of his Investment
            Accounts such that a percentage of any one or more Investment
            Accounts may be transferred to any one or more other Investment
            Accounts. The requisite transfers shall be valued as of the
            Valuation Date on which the direction is received by the Trustees
            and shall be affected within seven (7) days of the Trustees' receipt
            of such direction.

6.5   Restrictions on Investments in the Employer Stock Fund for Certain
      Participants

      Notwithstanding anything in the Plan to the contrary, any Participant
      subject to the provisions of Section 16(b) of the Securities Exchange Act
      of 1934, as amended: (a) may direct that his Accounts be transferred into
      or out of the Employer Stock Fund, subject to the provisions of Section
      6.3, only once during each quarter, during the period beginning on the
      third (3rd)


--------------------------------------------------------------------------------
787                                  41              Carver Federal Savings Bank
<PAGE>

                                                                    Article VI -
                         Investment Directions, Changes of Investment Directions
                                       and Transfers Between Investment Accounts
--------------------------------------------------------------------------------

      business day following the date of release of the quarterly and annual
      statements of sales and earnings by the issuer of the shares, and ending
      on the twelfth (12th) business day following such date; and (b) may not
      make a transfer in accordance with the provisions of Section 6.3 within
      six (6) months of the next preceding transfer into or out of the Employer
      Stock Fund. In addition, any Participant subject to the provisions of
      Section 16(b) of the Securities Exchange Act of 1934 who elects to receive
      a distribution of shares from the Plan in accordance with Section 7.11
      hereof, including withdrawals under Sections 7.3 and 7.4 and loans under
      Article VIII, or who substantially decreases his rate of Before-Tax
      Contributions pursuant to Section 3.3 with respect to the amounts to be
      invested in the Employer Stock Fund, or his investment direction with
      respect to the Employer Stock Fund pursuant to Section 6.2, must either
      (i) in the case of a distribution, hold such shares for a period of six
      (6) months commencing with the date of distribution, or (ii) refrain from
      directing the purchase of additional Units in the Employer Stock Fund for
      a period of six (6) months beginning with the date of a decrease in rate
      or a change in investment direction. However, unless otherwise required by
      rules and regulations of the Securities and Exchange Commission, the
      restrictions under this Section 6.5 shall not apply to distributions of
      shares made in connection with a Participant's death, Disability,
      termination of employment or reaching his Retirement Date; pursuant to a
      qualified domestic relations order described under Section 414(p) of the
      Code; as a result of the minimum distribution requirements described under
      Section 401(a)(9) of the Code; or as a result of the limitations described
      under Section 401(k), 401(m), 402(g) and 415 of the Code.


--------------------------------------------------------------------------------
787                                  42              Carver Federal Savings Bank
<PAGE>

                                                                   Article VII -
                                                             Payment of Benefits
--------------------------------------------------------------------------------

                                  ARTICLE VII -
                               PAYMENT OF BENEFITS

7.1   General

      (a)   For purposes of this Article VII, the following terms and phrases
            shall have the meanings hereinafter ascribed to them:

            (i)   "Beneficiary" shall mean (A) in the case of a married
                  Participant, the Spouse. Notwithstanding the foregoing, such
                  Participant may, subject to the spousal consent requirements
                  of Section 7.2(a), effectively elect to designate a person or
                  persons other than the Spouse as Beneficiary; (B) in the case
                  of a single Participant, a person or persons who have been
                  designated under the Plan by such Participant or who are
                  otherwise entitled to a benefit under the Plan.

            (ii)  "Straight Life Annuity" shall mean a benefit payable in equal
                  monthly installments to the Participant for his life with no
                  benefits payable after his death.

            (iii) "100% Joint and Survivor Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his life
                  with the same benefit continuing after his death to and for
                  the life of a surviving Beneficiary.

            (iv)  "75% Joint and Survivor Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his life
                  with a benefit equal to three-quarters (3/4) of the benefit
                  paid to the Participant continuing after his death to and for
                  the life of a surviving Beneficiary.

            (v)   "50% Joint and Survivor Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his life
                  with a benefit equal to one-half (1/2) of the benefit paid to
                  the Participant continuing after his death to and for the life
                  of a surviving Beneficiary.

            (vi)  "Period Certain and Life Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his
                  lifetime. If the Participant's death occurs on or after the
                  expiration of the period certain, no further benefits will be
                  payable. If, however, the Participant's death occurs before
                  the expiration of the period certain, equal monthly
                  installments in the same amount as paid to the Participant
                  prior to his death will be paid to his designated Beneficiary.
                  In the event neither the Participant nor the designated
                  Beneficiary survive to the end of said period certain, a final
                  lump sum distribution equal to the commuted value of any
                  installments shall be made to the estate of the last to die of
                  (A) the Participant and (B) his Beneficiary.


--------------------------------------------------------------------------------
787                                  43              Carver Federal Savings Bank
<PAGE>

                                                                   Article VII -
                                                             Payment of Benefits
--------------------------------------------------------------------------------

      (b)   The vested interest in the Net Value of any one or more of the
            Accounts of a Participant, Beneficiary or any other person entitled
            to benefits under the Plan shall be paid only at the times, to the
            extent, in the manner, and to the persons provided in this Article
            VII.

      (c)   Notwithstanding the foregoing, if payments are to be made on a
            monthly basis and if payments are fifty dollars ($50.00) or less,
            the Committee, in its sole discretion, may determine to make such
            payments in a lump sum or in quarterly, semi-annual, or annual
            installments.

      (d)   Any distribution of the vested interest in the Net Value of a
            Participant's Accounts which is made by the purchase of any annuity
            shall be made by the purchase of a nontransferable annuity contract
            from a legal reserve life insurance company licensed to do business
            in the state of New York. Such annuity contract shall comply with
            the provisions of this Plan.

      (e)   The Net Value of any one or more of the Accounts of a Participant
            shall be subject to the provisions of Section 8.7.

      (f)   Notwithstanding any provisions of the Plan to the contrary, any and
            all withdrawals, distributions or payments made under the provisions
            of this Article VII shall be made in accordance with Section
            401(a)(9) of the Code and any and all Income Tax Regulations
            promulgated thereunder.

            With respect to distributions under the Plan made in calendar years
            beginning on or after January 1, 2001, the Plan will apply the
            minimum distribution requirements of Section 401(a)(9) of the Code
            in accordance with the regulations under Section 401(a)(9) that were
            proposed in January 2001, notwithstanding any provision of the Plan
            to the contrary. This amendment shall continue in effect until the
            end of the 2002 calendar year. For calendar years beginning with the
            2003 calendar year, the Plan will apply the minimum distribution
            requirements of Section 401(a)(9) of the Code, in accordance with
            final regulations, as set forth in Section 7.10.

      (g)   Notwithstanding any provisions of the Plan to the contrary, the
            provisions of this Article VII shall also apply to a person who is
            not a Participant but who has made a contribution to and maintains a
            Rollover Contribution Account under the Plan.

      (h)   Distributions from the Employer Stock Fund under this Article VII,
            shall be made in accordance with Section 7.11 hereunder.

7.2   Spousal Consent Requirements - Optional Forms of Benefit Payments, Loans,
      Withdrawals, Beneficiaries

      (a)   An election by the Participant (i) to receive benefit payments in a
            form other than the normal form of benefit payment set forth in
            Section 7.5(a), (ii) to receive a loan in


--------------------------------------------------------------------------------
787                                  44              Carver Federal Savings Bank
<PAGE>

                                                                   Article VII -
                                                             Payment of Benefits
--------------------------------------------------------------------------------

            accordance with the provisions of Article VIII or to revise,
            renegotiate, renew or extend an existing loan, (iii) to receive a
            withdrawal in accordance with the provisions of Section 7.3 or
            Section 7.4, (iv) to designate a Beneficiary who is other than his
            Spouse, or (v) under any other provision of the Plan which is
            subject to spousal consent, shall not be effective unless: (A) the
            Participant's Spouse irrevocably consents to such election in
            writing, (B) such election designates a Beneficiary or form of
            benefit payment, which may not be changed without spousal consent
            unless the consent of the Spouse expressly permits designation by
            the Participant without any requirement of further consent by the
            Spouse, (C) the Spouse's consent acknowledges understanding of the
            effect of such election, and (D) the consent is witnessed by a Plan
            representative or a notary public. Notwithstanding this consent
            requirement, if the Participant establishes to the satisfaction of
            the Plan representative that such written consent cannot be obtained
            because there is no Spouse or the Spouse cannot be located, such
            election shall be deemed a qualified election.

            Any consent necessary under this provision shall be valid only with
            respect to the Spouse who signs the consent. Notwithstanding the
            foregoing sentence, a consent to receive a loan or withdrawal which
            had been executed by a Spouse shall be binding with respect to such
            loan or withdrawal on any subsequent Spouse.

      (b)   (i)   A married Participant who has submitted to the Committee an
                  election form in accordance with the provisions of subsection
                  (a)(i) may, without the consent of his Spouse, revoke such
                  prior election by submitting written notification of such
                  revocation to the Committee before the date benefit payments
                  are scheduled to commence. Upon revocation, the 50% Joint and
                  Survivor Annuity, with the Participant's Spouse as
                  Beneficiary, shall be reinstated unless the Participant files
                  another election form in accordance with the provisions of
                  subsection (a). The number of election forms and revocations
                  shall not be limited.

            (ii)  A married Participant who has submitted to the Committee an
                  election form in accordance with the provisions of subsection
                  (a)(iv), may, without the consent of his Spouse, revoke such
                  prior election by submitting written notification of such
                  revocation to the Committee before the date benefit payments
                  are scheduled to commence. Such revocation shall result in the
                  reinstatement of the Spouse as the designated Beneficiary
                  unless the Participant effectively designates another person
                  as Beneficiary in accordance with the provisions of subsection
                  (a) and Section 7.7. The number of election forms and
                  revocations shall not be limited.

      (c)   The terms and conditions of any election form shall, unless
            otherwise indicated, become effective on the date benefit payments
            are scheduled to commence, or, if applicable, the date of
            distribution.


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7.3   Non-Hardship Withdrawals

      (a)   Subject to the spousal consent requirements of Section 7.2(a) and
            the terms and conditions contained in this Section 7.3, upon ten
            (10) days prior written notice to the Committee each Participant who
            has attained age fifty-nine and one-half (59-1/2) shall be entitled
            to withdraw not more often than once during any Plan Year all or any
            portion of his vested interest in the Net Value of his Accounts in
            the following order of priority:

            (i)   the Before-Tax Contribution Account;

            (ii)  the Net Value of the Participant's Rollover Contribution
                  Account provided that such Participant shall have satisfied
                  such additional terms and conditions, if any, as the Committee
                  may deem necessary;

            (iii) the vested interest in the Net Value of his Matching
                  Contribution Account;

            (iv)  the vested interest in the Net Value of his Discretionary
                  Employer Contribution Account; and

            (v)   the Net Value of his Nonelective Employer Contribution
                  Account.

      (b)   Withdrawals under this Section 7.3 shall be made in the following
            order of priority:

            (i)   by the redemption of Units from each of the Participant's
                  Accounts in the Trust Fund in the order set forth in Section
                  7.3(a), on a pro rata basis from the Investment Accounts
                  thereunder, as were selected by the Participant pursuant to
                  Article VI; and

            (ii)  by the redemption of Units invested in the Employer Stock Fund
                  from each of the Participant's Accounts invested under the
                  Separate Agreement, in the order set forth in Section 7.3(a),
                  if selected by the Participant pursuant to Article VI.

      (c)   Any withdrawals under this Section 7.3 shall be subject to the
            restrictions of Section 6.5.

7.4   Hardship Distributions

      (a)   For purposes of this Section 7.4, a "Hardship" distribution shall
            mean a distribution that is (i) made on account of a condition which
            has given rise to immediate and heavy financial need of a
            Participant and (ii) necessary to satisfy such financial need. A
            determination of the existence of an immediate and heavy financial
            need and the amount necessary to meet the need shall be made by the
            Committee in accordance with uniform nondiscriminatory standards
            with respect to similarly situated persons.

      (b)   Immediate and Heavy Financial Need:


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            A Hardship distribution shall be deemed to be made on account of an
            immediate and heavy financial need if the distribution is on account
            of:

            (i)   expenses for medical care described under Section 213(d) of
                  the Code which were previously incurred by the Participant,
                  the Participant's Spouse or any of the Participant's
                  dependents as defined under Section 152 of the Code or
                  expenses which are necessary to obtain medical care described
                  under Section 213(d) of the Code for the Participant, the
                  Participant's Spouse or any of the Participant's dependents as
                  defined under Section 152 of the Code; or

            (ii)  purchase (excluding mortgage payments) of a principal
                  residence of the Participant; or

            (iii) payment of tuition and related educational fees for the next
                  twelve (12) months of post-secondary education for the
                  Participant, the Participant's Spouse, children or any of the
                  Participant's dependents as defined under Section 152 of the
                  Code; or

            (iv)  the need to prevent the eviction of the Participant from his
                  principal residence or foreclosure on the mortgage of the
                  Participant's principal residence; or

            (v)   any other condition which the Commissioner of Internal
                  Revenue, through the publication of revenue rulings, notices
                  and other documents of general applicability, deems to be an
                  immediate and heavy financial need.

      (c)   Necessary to Satisfy Such Financial Need:

            (i)   A distribution will be treated as necessary to satisfy an
                  immediate and heavy financial need of a Participant if: (A)
                  the amount of the distribution is not in excess of (1) the
                  amount required to relieve the financial need of the
                  Participant and (2) if elected by the Participant, an amount
                  necessary to pay any federal, state or local income taxes, or
                  penalties reasonably anticipated to result from such
                  distribution, and (B) such need may not be satisfied from
                  other resources that are reasonably available to the
                  Participant.

            (ii)  A distribution will be treated as necessary to satisfy a
                  financial need if the Committee reasonably relies upon the
                  Participant's representation that the need cannot be relieved:

                  (A)   through reimbursement or compensation by insurance or
                        otherwise,

                  (B)   by reasonable liquidation of the Participant's assets,
                        to the extent such liquidation would not itself cause an
                        immediate and heavy financial need,


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                  (C)   by cessation of Before-Tax Contributions or Employee
                        contributions, if any, under the Plan, or

                  (D)   by other distributions or nontaxable loans from plans
                        maintained by the Employer or by any other employer, or
                        by borrowing from commercial sources on reasonable
                        commercial terms.

                  For purposes of this subsection (c)(ii), the Participant's
                  resources shall be deemed to include those assets of his
                  Spouse and minor children that are reasonably available to the
                  Participant.

            (iii) Alternatively, a Hardship distribution will be deemed to be
                  necessary to satisfy an immediate and heavy financial need of
                  a Participant if (A) or (B) are met:

                  (A)   all of the following requirements are satisfied:

                        (I)   the distribution is not in excess of (1) the
                              amount of the immediate and heavy financial need
                              of the Participant and (2) if elected by the
                              Participant, an amount necessary to pay any
                              federal, state or local income taxes or penalties
                              reasonably anticipated to result from such
                              distribution;

                        (II)  the Participant has obtained all distributions,
                              other than Hardship distributions, and all
                              nontaxable loans currently available under all
                              plans maintained by the Employer;

                        (III) the Plan, and all other plans maintained by the
                              Employer, provide that the Participant's elective
                              contributions and Employee contributions, if any,
                              will be suspended for twelve (12) months after
                              receipt of the Hardship distribution; and

                        (IV)  the Plan, and all other plans maintained by the
                              Employer, provide that the Participant may not
                              make elective contributions for the Participant's
                              taxable year immediately following the taxable
                              year of the Hardship distribution in excess of the
                              applicable limit under Section 402(g) of the Code
                              for such next taxable year, less the amount of
                              such Participant's elective contributions for the
                              taxable year of the Hardship distribution; or

                  (B)   the requirements set forth in additional methods, if
                        any, prescribed by the Commissioner of Internal Revenue
                        (through the publication of revenue rulings, notices and
                        other documents of general applicability) are satisfied.


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      (d)   A Participant who has withdrawn the maximum amounts available to
            such Participant under Section 7.3 or a Participant who is not
            eligible for a withdrawal thereunder, may, in case of Hardship (as
            defined under this Section 7.4), apply not more often than once in
            any Plan Year to the Committee for a Hardship distribution. Any
            application for a Hardship distribution shall be subject to the
            spousal consent requirements of Section 7.2(a) and be made in
            writing to the Committee at least ten (10) days prior to the
            requested date of payment. Hardship distributions may be made by a
            distribution of all or a portion of a Participant's (i) Before-Tax
            Contributions, (ii) Net Value of his Rollover Contribution Account,
            (iii) vested interest in the Net Value of his Matching Contribution
            Account and (iv) the vested interest in the Net Value of his
            Discretionary Employer Contribution Account.

      (e)   Distributions under this Section 7.4 shall be made in the following
            order of priority:

            (i)   Participant's Before-Tax Contributions;

            (ii)  the Net Value of the Participant's Rollover Contribution
                  Account;

            (iii) the vested interest in the Net Value of the Participant's
                  Matching Contribution Account; and

            (iv)  the vested interest in the Net Value of the Participant's
                  Discretionary Employer Contribution Account; and

            (v)   the vested interest in the Net Value of the Participant's
                  Nonelective Employer Contribution Account.

      (f)   Withdrawals under this Section 7.4 shall be made in the following
            order of priority:

            (i)   by the redemption of Units from each of the Participant's
                  Accounts in the Trust Fund in the order set forth in Section
                  7.4(e), on a pro rata basis from the Investment Accounts
                  thereunder, as were selected by the Participant pursuant to
                  Article VI; and

            (ii)  by the redemption of Units invested in the Employer Stock Fund
                  from each of the Participant's Accounts invested under the
                  Separate Agreement, in the order set forth in Section 7.4(e),
                  if selected by the Participant pursuant to Article VI.

      (g)   A Participant who receives a Hardship distribution under this
            Section 7.4 may have his Before-Tax Contributions suspended in
            accordance with Section 3.3.

      (h)   Any withdrawals under this Section 7.4 shall be subject to the
            restrictions of Section 6.5.


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7.5   Distribution of Benefits Following Retirement, Disability or Termination
      of Service

      (a)   If a Participant incurs a Termination of Service for any reason
            other than death, a distribution of the vested interest in the Net
            Value of his Accounts shall be made by the purchase of (i) a 50%
            Joint and Survivor Annuity with his Spouse as the designated
            Beneficiary or (ii) a Straight Life Annuity if the Participant does
            not have a Spouse. Payment of benefits to the Participant shall
            commence as of the later of the Participant's Normal Retirement Date
            or his Postponed Retirement Date.

      (b)   The Committee shall make every reasonable effort to furnish each
            Participant, by personal delivery or first class mail, the following
            information not less than thirty (30) days nor more than ninety (90)
            days prior to the date benefit payments are scheduled to commence:

            (i)   the terms and conditions of the 50% Joint and Survivor
                  Annuity,

            (ii)  the Participant's right to make, and the effect of, an
                  election to waive the 50% Joint and Survivor Annuity,

            (iii) the rights of the Participant's Spouse under the Plan,

            (iv)  the right to make, and the effect of, a revocation of a
                  previous election to waive the 50% Joint and Survivor Annuity,
                  and

            (v)   the relative values of the various optional forms of benefit
                  payments under the Plan.

            The Employer may also permanently post in the Employers office or
            offices the information described in (i) through (v) above in a
            manner that is reasonably calculated to reach the attention of each
            Participant.

      (c)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), the Participant may file an election form to receive his
            vested interest in the Net Value of his Accounts in any one of the
            optional forms of benefit payment set forth in Section 7.6. Such
            form must be filed with the Committee during the ninety (90) day
            election period ending on the date benefit payments are scheduled to
            commence.

      (d)   If a Participant who incurs a Termination of Service for any reason
            other than death, files an election with the Committee to receive an
            optional form of benefit payment in accordance with the provisions
            of Section 7.6, and dies before the entire vested interest in the
            Net Value of his Accounts has been distributed:


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            (i)   if the Net Value of a Participant's Accounts was distributed
                  by the purchase of an annuity contract, the remainder, if any,
                  of such vested interest shall be paid in accordance with the
                  provisions of such annuity contract;

            (ii)  if the Participant had elected to receive and had begun
                  receiving a distribution in the form of installments, the
                  Beneficiary shall receive distributions over the remaining
                  installment period, at the times set forth in such election.
                  If the Beneficiary designated to receive payments under the
                  installment form of benefit payments dies after the
                  commencement of payments to the Participant but prior to the
                  earlier of the end of the installment period or the date of
                  the Participant's death, the Participant shall, subject to the
                  spousal consent requirements of Section 7.2(a), have the right
                  to designate another Beneficiary, provided such designation is
                  executed and filed with the Committee prior to the
                  Participant's death. If there is no Beneficiary, the remaining
                  vested interest in the Net Value of his Accounts shall be
                  payable in a lump sum to the executor or administrator of his
                  estate, or, if no such executor or administrator is appointed
                  and qualifies within a time which the Committee shall, in its
                  sole and absolute discretion, deem to be reasonable, then to
                  such one or more of the descendants and blood relatives of
                  such deceased Participant as the Committee, in its sole and
                  absolute discretion, may select;

            (iii) if the Participant had elected to receive a deferred lump sum
                  distribution, the Participant's Beneficiary shall receive a
                  lump sum distribution as of the earlier of: (A) the Valuation
                  Date set forth in the Participant's election or (B) the last
                  Valuation Date which occurs within one (1) year of the
                  Participant's death;

            (iv)  if the Participant had elected to receive an immediate lump
                  sum distribution, the Participant's Beneficiary shall receive
                  a lump sum distribution as of the Valuation Date set forth in
                  the Participant's election;

            (v)   if the Participant had elected to receive an annuity and the
                  annuity contract had not yet been purchased, the Participant's
                  Beneficiary shall, by completing and filing the election form
                  prescribed by the Committee, elect to receive the distribution
                  as a Straight Life Annuity or one of the optional forms of
                  benefit payment set forth in Section 7.8(f));

            (vi)  if the Participant had elected that a lump sum distribution be
                  paid in a Direct Rollover pursuant to Section 7.9 and such
                  distribution had not yet been made, the Participant's
                  Beneficiary shall, by completing and filing the election form
                  prescribed by the Committee, elect to receive the distribution
                  as a Straight Life Annuity or in one of the optional forms of
                  benefit payment set forth in Section 7.8(f));


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            (vii) Notwithstanding the foregoing, if the Beneficiary is the
                  Participant's Spouse and if benefits are payable to such
                  Beneficiary as an immediate or deferred lump sum distribution,
                  such Spouse may defer the distribution up to the date on which
                  the Participant would have attained age seventy and one-half
                  (70-1/2).

      (e)   If an Participant who incurs a Termination of Service is reemployed
            by the Employer, upon such Participant's subsequent Termination of
            Service his prior election to receive a distribution in a form other
            than the normal form of benefit payment set forth in subsection (a)
            shall be null and void and the vested interest in the Net Value of
            his Accounts shall be distributed to him in accordance with the
            provisions of subsection (a).

      (f)   An Employee who incurs a Termination of Service, has elected to
            receive a distribution in the form of installments and is reemployed
            by the Employer prior to the distribution of the entire vested
            interest in the Net Value of his Accounts in accordance with the
            provisions of Section 7.6(e), shall not be eligible to receive or to
            continue to receive such distribution during his period of
            reemployment with the Employer. Upon such Employee's subsequent
            Termination of Service, his prior election to receive a distribution
            in the form of installments shall be null and void and the vested
            interest in the Net Value of his Accounts shall be distributed to
            him in accordance with the provisions of subsection (a).

      (g)   If a Participant incurs a Termination of Service for any reason and
            the vested interest in the Net Value of the Participant's Accounts
            is equal to or less than three thousand five hundred dollars
            ($3,500), (and effective January 1, 1998, five thousand dollars
            ($5,000)), a lump sum distribution of the vested interest in the Net
            Value of his Accounts shall be made to the Participant within seven
            (7) days of the Valuation Date coincident with the date of receipt
            by the Trustees of the proper documentation that such Participant
            incurred a Termination of Service.

      (d)   A Participant's vested interest in the Net Value of his Accounts in
            the Employer Stock Fund shall be distributed to the Participant by
            the Separate Agency as soon as administratively possible following
            the date the Employer is informed by the Trustees of the
            Participant's vested interest in such Investment Accounts. The
            distribution shall be made in accordance with Section 7.11 and the
            terms and provisions of the Separate Agreement.

7.6   Optional Forms of Benefit Payment upon Retirement, Disability or
      Termination of Service

      (a)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may file an
            election form to receive a distribution of the vested interest in
            the Net Value of his Accounts by the purchase of a 100% Joint and
            Survivor Annuity, a 75% Joint and


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            Survivor Annuity or a 50% Joint and Survivor Annuity or a Period
            Certain and Life Annuity. Such form may, subject to the spousal
            consent requirements of Section 7.2(a), include an election to
            designate a Beneficiary who is other than his Spouse. Payment of
            benefits to the Participant shall commence as of the later of the
            Participant's Normal Retirement Date or his Postponed Retirement
            Date. Notwithstanding the foregoing sentence, such form may include
            an election to receive a distribution commencing on any date
            coincident with or next following his Early Retirement Date or, if
            applicable, the date of his Disability.

      (b)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), file an
            election form to receive a distribution of the vested interest in
            the Net Value of his Accounts by the purchase of a Straight Life
            Annuity. Payment of benefits to the Participant shall commence as of
            the later of the Participant's Normal Retirement Date or his
            Postponed Retirement Date. Notwithstanding the foregoing sentence,
            such form may include an election to receive a distribution
            commencing on any date coincident with or next following his Early
            Retirement Date or, if applicable, the date of his Disability.

      (c)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a) and the
            required minimum distribution provisions of Sections 7.10(b) and
            7.10(c), file an election form to receive the vested interest in the
            Net Value of his Accounts as a lump sum distribution as of any
            Valuation Date following his Termination of Service and prior to his
            Normal Retirement Date; provided, however, that the Valuation Date
            may not be later than thirteen (13) months following his Termination
            of Service. The vested interest in the Net Value of his Accounts
            shall be distributed to such Participant as a lump sum distribution
            within seven (7) days of the Valuation Date coincident with the date
            of receipt by the Trustees of the proper documentation indicating
            the Participant's distribution date.

      (d)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), elect to
            defer receipt of the vested interest in the Net Value of his
            Accounts beyond his Normal Retirement Date or Postponed Retirement
            Date. If such an election is made, the vested interest in the Net
            Value of his Accounts shall continue to be held in the Trust Fund.
            Subject to the required minimum distribution provisions of Sections
            7.10(b) and 7.10(c), the vested interest in the Net Value of his
            Accounts shall be distributed to such Participant as a lump sum
            distribution within seven (7) days of the Valuation Date coincident
            with the


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            date of receipt by the Trustees of the proper documentation
            indicating the Employee's deferred distribution date.

      (e)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a) and the
            required minimum distribution provisions of Sections 7.10(b) and
            7.10(c), file an election form to receive the vested interest in the
            Net Value of his Accounts in the form of equal monthly, quarterly or
            annual installments over a period not to exceed ten (10) years. If a
            Participant elects to receive his benefit pursuant to this
            subsection (e), the installment period may not extend beyond the
            life expectancy of such Participant or the life expectancy of such
            Participant and his Beneficiary. The vested interest in the Net
            Value of his Accounts shall be determined as of such Valuation Date
            or Valuation Dates in each such Plan Year as may be elected by such
            Participant and shall be based on the respective values of the
            Participant's Units in each Investment Account as of such Valuation
            Date or Valuation Dates. The amount of the installment payment shall
            be distributed by the redemption of Units from the Participant's
            Accounts on a pro rata basis among such Participant's Investment
            Accounts. Any portion of the vested interest in the Net Value of the
            Accounts of such Participant which shall not have been so paid shall
            continue to be held for his benefit or for the benefit of his
            Beneficiary in the Participant's Investment Accounts.

      (f)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), file an
            election form that a lump sum distribution equal to the vested
            interest in the Net Value of his Accounts be paid in a Direct
            Rollover pursuant to Section 7.9. The amount of such lump sum
            distribution shall be determined as of the Valuation Date coincident
            with the date of receipt by the Trustees of the proper
            documentation.

      (g)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), file an
            election form to receive the vested interest in the Net Value of his
            Accounts in the form of a partial lump sum distribution as of some
            Valuation Date following his Termination of Service. Subject to the
            required minimum distribution provisions of Sections 7.10(b) and
            7.10(c), the partial lump sum distribution shall be distributed to
            such Employee within seven (7) days of the Valuation Date coincident
            with the date of receipt by the Trustees of the proper documentation
            indicating the Employee's distribution date; and the balance


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            of the vested interest in the Net Value of his Accounts shall be
            payable in the form of one (1) of the following:

            (i)   monthly, quarterly or annual installments over a period not to
                  exceed ten (10) years, as set forth in subsection (e); or

            (ii)  the purchase of an annuity, as set forth in Section
                  7.1(a)(ii), (iii), (iv), (v) or (vi).

7.7   Designation of Beneficiary

      (a)   Subject to the spousal consent requirements of Section 7.2(a), a
            Participant may, from time to time, designate any person or persons
            as Beneficiary or contingent Beneficiary to receive a benefit under
            Section 7.5 or Section 7.8 upon the death of the Participant. For
            purposes of this Section 7.7, "person" includes an individual, a
            trust, an estate, or any other entity designated as a Beneficiary.

      (b)   The designation of a Beneficiary or contingent Beneficiary shall be
            made in writing by the Participant in the form and manner prescribed
            by the Committee and shall not be effective unless such form is (i)
            filed prior to the death of such person and (ii) complies with the
            spousal consent requirements of Section 7.2(a). If more than one (1)
            person is designated as a Beneficiary, each designated Beneficiary
            in such Beneficiary classification shall have an equal share, unless
            the Participant directs otherwise.

      (c)   The designation of a Beneficiary or contingent Beneficiary which is
            filed with the Committee will revoke all prior Beneficiary
            designations filed with the Committee. The number of Beneficiary
            designations and revocations shall not be limited.

      (d)   If the Beneficiary or contingent Beneficiary designated to receive
            payments under an optional form of benefit set forth in Section 7.6
            dies prior to the commencement of benefit payments to the
            Participant, the terms and conditions of such election shall be
            deemed null and void and the normal form of benefit set forth in
            Section 7.5(a) shall be reinstated. Subject to the spousal consent
            requirements of Section 7.2(a), the Participant shall have the right
            to elect another optional form of benefit payment and another
            Beneficiary, provided such election is completed and filed with the
            Committee prior to the earlier of: (i) the Participant's death, or
            (ii) the date the Participant's benefit payments are scheduled to
            commence. Such election shall become effective on the date the
            Participant's benefit payments are scheduled to commence.

      (e)   If the Spouse or other Beneficiary designated to receive payments
            under Section 7.8(b) or Section 7.8(e), dies prior to the death of
            the Participant, the terms and conditions of such election shall be
            null and void. If the Participant is married, the normal form of
            benefit set forth in Section 7.8(b)(ii) shall be reinstated. Subject
            to the spousal consent requirements of Section 7.2(a), the
            Participant shall have the right to elect another Beneficiary,
            provided such election is completed and filed with the Committee
            prior to


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            the earlier of: (i) the Participant's death, or (ii) the date the
            Participant's benefit payments are scheduled to commence. Such
            election shall become effective on the date the Participant's
            benefit payments are scheduled to commence.

      (f)   If a Participant fails to designate a Beneficiary other than a
            Spouse to receive the Preretirement Death Benefit set forth in
            Section 7.8, or if the Beneficiary and contingent Beneficiary
            designated by a Participant die prior to such Participant's death
            and before the entire vested interest in the Net Value of the
            Participant's Accounts has been distributed, such Participant's
            benefits shall be paid as a lump sum to the executor or
            administrator of his estate.

7.8   Preretirement Death Benefits

      (a)   If a Participant dies prior to the date benefits are to commence and
            the vested interest in the Net Value of the Participant's Accounts
            is equal to or less than three thousand five hundred dollars
            ($3,500) (and effective January 1, 1998, five thousand dollars
            ($5,000)), a lump sum distribution of the vested interest in the Net
            Value of his Accounts shall be made to the Participant's Beneficiary
            within seven (7) days of the Valuation Date coincident with the date
            of receipt by the Trustees of the proper documentation indicating
            the date of the Participant's death.

      (b)   If a Participant dies prior to the date benefits are to commence and
            the vested interest in the Net Value of the Participant's Accounts
            exceeds three thousand five hundred dollars ($3,500) (and effective
            January 1, 1998, five thousand dollars ($5,000)), the Preretirement
            Death Benefit for a Participant shall be as follows:

            (i)   if a Participant had a vested interest in the Net Value of his
                  Accounts and died (A) prior to the date benefit payments are
                  scheduled to commence and (B) with no surviving Spouse, the
                  vested interest in the Net Value of his Accounts shall be made
                  to the Participant's designated Beneficiary by the purchase of
                  a Straight Life Annuity. Payment of benefits shall commence
                  within one (1) year of the Participant's death;

            (ii)  if a Participant had a vested interest in the Net Value of his
                  Accounts and died (A) prior to the date benefits payments are
                  scheduled to commence and (B) with a surviving Spouse, the
                  vested interest in the Net Value of his Accounts shall be made
                  to the surviving Spouse by the purchase of a Straight Life
                  Annuity. Payment of benefits to the Participant's Spouse shall
                  commence as of the later of the date the Participant would
                  have attained his Normal Retirement Date or the date of the
                  Participant's death.

      (c)   Notwithstanding the provisions of subsection (b)(ii), the surviving
            Spouse of a Participant may elect that the Straight Life Annuity be
            purchased with benefits to commence on a date selected by the Spouse
            which occurs on any date commencing


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            with the Participant's date of death and ending on the date the
            Participant would have attained age seventy and one-half (70-1/2).

      (d)   In lieu of the normal form of benefit payment set forth in
            subsection (b)(ii), a Participant may, subject to the spousal
            consent requirements of Section 7.2(a), elect to waive the
            Preretirement Death Benefit. Such waiver shall designate a
            Beneficiary who is other than the Participant's Spouse.

      (e)   Consent by a Spouse to waive the Preretirement Death Benefit is not
            binding on a subsequent Spouse. If a Participant has elected, with
            spousal consent, to waive the Preretirement Death Benefit and is
            subsequently widowed or divorced and thereafter remarried, the
            Preretirement Death Benefit is automatically reinstated upon
            remarriage, subject to any subsequent election by the Participant,
            with the consent of his new Spouse, to waive such coverage.

      (f)   In lieu of the normal form of Preretirement Death Benefit set forth
            in subsection (b), upon the Participant's death the Beneficiary of a
            Participant may, by completing and filing the election form
            prescribed by the Committee, elect to receive the vested interest in
            the Net Value of a Participant's Accounts in one of the following
            optional forms of benefit payment:

            (i)   as a lump sum distribution as of any Valuation Date following
                  the Participant's death; provided, however, that the Valuation
                  Date may not be later than one (1) year following the
                  Participant's death. The vested interest in the Net value of
                  the Participant's Accounts shall be distributed to such person
                  as a lump sum distribution within seven (7) days of the
                  Valuation Date coincident with the date of receipt by the
                  Trustees of the proper documentation indicating the
                  distribution date.

            (ii)  in the form of equal monthly, quarterly or annual installments
                  over a period not to exceed ten (10) years. The vested
                  interest in the Net value of the Participant's Accounts shall
                  be determined as of such Valuation Date or Valuation Dates in
                  each such Plan Year as may be elected by such person and shall
                  be based on the respective values of the deceased
                  Participant's Units in each Investment Account as of such
                  Valuation Date or Valuation Dates. The amount of the
                  installment payment shall be distributed by the redemption of
                  Units from the deceased Participant's Accounts on a pro rata
                  basis among such deceased Participant's Investment Accounts.
                  Any portion of the vested interest in the Net Value of the
                  Accounts of such deceased Participant which shall not have
                  been so paid shall continue to be held for the benefit of the
                  surviving Spouse or other Beneficiary or for the benefit of
                  the beneficiary designated by such person. If the surviving
                  Spouse or other Beneficiary elects to receive his benefit
                  pursuant to this subsection (f)(ii), installment payments
                  shall begin to such


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                  person within one (1) year of the Participant's death and the
                  installment period may not extend beyond the life expectancy
                  of such person.

            (iii) as a lump sum distribution equal to the vested interest in the
                  Net Value of the Participant's Accounts made payable in a
                  Direct Rollover pursuant to Section 7.9. Such lump sum
                  distribution shall be made within seven (7) days of the
                  Valuation Date coincident with the date of receipt by the
                  Trustees of the proper documentation.

            (iv)  in the form of a partial distribution as of some Valuation
                  Date following his Termination of Service. Subject to the
                  required minimum distribution provisions of Sections 7.10(b)
                  and 7.10(c), the partial distribution shall be distributed to
                  such Employee within seven (7) days of the Valuation Date
                  coincident with the date of receipt by the Trustees of the
                  proper documentation indicating the Employee's distribution
                  date; and the balance of the vested interest in the Net Value
                  of his Accounts shall be payable in the form of one of the
                  following:

                  (I)   installments over a period not to exceed ten (10) years,
                        as set forth in subsection (f)(ii);

                  (II)  the purchase of a Straight Life Annuity, as set forth in
                        subsections (b) and (c), if applicable; or

                  (III) a lump sum distribution made payable in a Direct
                        Rollover pursuant to Section 7.9 and as set forth in
                        subsection (iii).

            Notwithstanding the foregoing provisions to the contrary, if the
            surviving Spouse of a deceased Participant elects one of these
            optional forms of benefit payment set forth above, such Spouse may
            elect to have benefits commence on a date selected by such Spouse
            which occurs on any date commencing with the Participant's date of
            death and ending on the date the Participant would have attained age
            seventy and one-half (70-1/2).

7.9   Direct Rollover of Eligible Rollover Distributions

      For purposes of this Section 7.9, the following definitions shall apply:

      (a)   "Direct Rollover" means a payment by the Plan to the Eligible
            Retirement Plan specified by the Distributee.

      (b)   "Distributee" means an Employee or former Employee. In addition, the
            Employee's or former Employee's surviving spouse and the Employee's
            or former Employee's Spouse or former spouse who is the alternate
            payee under a qualified domestic relations order, as defined in
            Section 414(p) of the Code, are Distributees with regard to the
            interest of the Spouse or former spouse.


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      (c)   "Eligible Retirement Plan" means an individual retirement account
            described in Section 408(a) of the Code, an individual retirement
            annuity described in Section 408(b) of the Code, an annuity plan
            described in Section 403(a) of the Code, or a qualified trust
            described in Section 401(a) of the Code, that accepts the
            Distributee's Eligible Rollover Distribution. However, in the case
            of an Eligible Rollover Distribution to the surviving Spouse, an
            Eligible Retirement Plan is an individual retirement account or
            individual retirement annuity.

      (d)   "Eligible Rollover Distribution" means any distribution of all or
            any portion of the balance to the credit of the Distributee, except
            that an Eligible Rollover Distribution does not include: any
            distribution that is one of a series of substantially equal periodic
            payments (not less frequently than annually) made for the life (or
            life expectancy) of the Distributee or the joint lives (or joint
            life expectancies) or the Distributee and the Distributee's
            designated Beneficiary, or for a specified period of ten (10) years
            or more; any distribution to the extent such distribution is
            required under Section 401(a)(9) of the Code; and the portion of any
            distribution that is not includable in gross income (determined
            without regard to the exclusion for net unrealized appreciation with
            respect to employer securities); and effective January 1, 2000, any
            Hardship distribution described in Section 401(k)(2)(B)(i)(IV) of
            the Code.

      Notwithstanding any provision of the Plan to the contrary that would
      otherwise limit a Distributee's election under this Section, a Distributee
      may elect, at the time and in the manner prescribed by the Plan
      Administrator, to have any portion of an Eligible Rollover Distribution
      paid directly to an Eligible Retirement Plan specified by the Distributee
      in a Direct Rollover.

7.10  Minimum Distribution Requirements

      (a)   General Rules

            (i)   Effective Date. The provisions of this Section 7.10 will apply
                  for purposes of determining required minimum distributions for
                  calendar years beginning with the 2003 calendar year.

            (ii)  Precedence. The requirements of this Section 7.10 will take
                  precedence over any inconsistent provisions of the Plan.

            (iii) Requirements of Treasury Regulations Incorporated. All
                  distributions required under this Section 7.10 will be
                  determined and made in accordance with the Treasury
                  regulations under Section 401(a)(9) of the Code.

            (iv)  TEFRA Section 242(b)(2) Elections. Notwithstanding the other
                  provisions of this Section 7.10, distributions may be made
                  under a designation made before January 1, 1984, in accordance
                  with Section 242(b)(2) of the Tax Equity and Fiscal
                  Responsibility Act (TEFRA), and the provisions of the Plan, if
                  applicable, that relate to Section 242(b)(2) of TEFRA.


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      (b)   Time and Manner of Distribution

            (i)   Required Beginning Date. The Participant's entire interest
                  will be distributed, or begin to be distributed, to the
                  Participant no later than the Participant's Required Beginning
                  Date.

            (ii)  Death of Participant Before Distributions Begin. If the
                  Participant dies before distributions begin, the Participant's
                  entire interest will be distributed, or begin to be
                  distributed, no later than as follows:

                  (A)   If the Participant's surviving Spouse is the
                        Participant's sole Designated Beneficiary, distributions
                        to the surviving Spouse will begin by December 31 of the
                        calendar year immediately following the calendar year in
                        which the Participant died, or by December 31 of the
                        calendar year in which the Participant would have
                        attained age 70 1/2, if later.

                  (B)   If the Participant's surviving Spouse is not the
                        Participant's sole Designated Beneficiary, distributions
                        to the Designated Beneficiary will begin by December 31
                        of the calendar year immediately following the calendar
                        year in which the Participant died.

                  (C)   If there is no Designated Beneficiary as of September 30
                        of the year following the year of the Participant's
                        death, the Participant's entire interest will be
                        distributed by December 31 of the calendar year
                        containing the fifth (5th) anniversary of the
                        Participant's death.

                  (D)   If the Participant's surviving Spouse is the
                        Participant's sole Designated Beneficiary and the
                        surviving Spouse dies after the Participant but before
                        distributions to the surviving Spouse begin, this
                        Section 7.10(b)(ii), other than Section 7.10(b)(ii)(A),
                        will apply as if the surviving Spouse were the
                        Participant.

                  For purposes of this Section 7.10(b)(ii) and Section 7.10(d),
                  unless Section 7.10(b)(ii)(D) applies, distributions are
                  considered to begin on the Participant's Required Beginning
                  Date. If Section 7.10.(b)(ii)(D) applies, distributions are
                  considered to begin on the date distributions are required to
                  begin to the surviving Spouse under Section 7.10(b)(ii)(A). If
                  distributions under an annuity purchased from an insurance
                  company, if applicable, irrevocably commence to the
                  Participant before the Participant's Required Beginning Date
                  (or to the Participant's surviving Spouse before the date
                  distributions are required to begin to the surviving Spouse
                  under Section 7.10(b)(ii)(A), the date distributions are
                  considered to begin is the date distributions actually
                  commence.

            (iii) Election to Apply 5-Year Rule to Distributions to Designated
                  Beneficiaries. If the Participant dies before distributions
                  begin and there is a Designated Beneficiary, distribution to
                  the Designated Beneficiary is not required to begin by the
                  date specified in Section 7.10(b)(ii), but the Participant's
                  entire interest will be distributed to the Designated
                  Beneficiary by December 31 of the calendar year containing the
                  fifth anniversary of the Participant's death. If the
                  Participant's surviving Spouse is the Participant's sole


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                  Designated Beneficiary and the surviving Spouse dies after the
                  Participant but before distributions to either the Participant
                  or the surviving Spouse begin, this election will apply as if
                  the surviving Spouse were the Participant.

            (iv)  Election to Allow Participants or Beneficiaries to Elect
                  5-Year Rule. Participants or Beneficiaries may elect on an
                  individual basis whether the 5-year rule or the Life
                  Expectancy rule in Sections 7.10(b)(ii) and 7.10(d)(ii)
                  applies to distributions after the death of a Participant who
                  has a Designated Beneficiary. The election must be made no
                  later than the earlier of September 30 of the calendar year in
                  which distribution would be required to begin under Section
                  7.10(b)(ii), or by September 30 of the calendar year which
                  contains the fifth anniversary of the Participant's (or, if
                  applicable, surviving Spouse's) death. If neither the
                  Participant nor Beneficiary makes an election under this
                  subsection, distributions will be made in accordance with
                  Sections 7.10(b)(ii) and 7.10(d)(ii) and, if applicable, the
                  elections in Section 7.10(b)(iii) above.

            (v)   Election to Allow Designated Beneficiary Receiving
                  Distributions Under 5-Year Rule to Elect Life Expectancy
                  Distributions. A Designated Beneficiary who is receiving
                  payments under the 5-year rule may make a new election to
                  receive payments under the Life Expectancy rule until December
                  31, 2003, provided that all amounts that would have been
                  required to be distributed under the Life Expectancy rule for
                  all Distribution Calendar Years before 2004 are distributed by
                  the earlier of December 31, 2003 or the end of the 5-year
                  period.

            (vi)  Forms of Distribution. Unless the Participant's interest is
                  distributed in the form of an annuity purchased from an
                  insurance company or in a single sum on or before the Required
                  Beginning Date, as of the first Distribution Calendar Year
                  distributions will be made in accordance with Sections 7.10(c)
                  and (d). If the Participant's interest is distributed in the
                  form of an annuity purchased from an insurance company,
                  distributions thereunder will be made in accordance with the
                  requirements of Section 401(a)(9) of the Code and the Treasury
                  regulations.

      (c)   Required Minimum Distributions During Participant's Lifetime

            (i)   Amount of Required Minimum Distribution For Each Distribution
                  Calendar Year. During the Participant's lifetime, the minimum
                  amount that will be distributed for each Distribution Calendar
                  Year is the lesser of:

                  (A)   the quotient obtained by dividing the Participant's
                        Accounts by the distribution period in the Uniform
                        Lifetime Table set forth in Section 1.401(a)(9)-9 of the
                        Treasury regulations, using the Participant's age as of
                        the Participant's birthday in the Distribution Calendar
                        Year; or

                  (B)   if the Participant's sole Designated Beneficiary for the
                        Distribution Calendar Year is the Participant's Spouse,
                        the quotient obtained by dividing the Participant's
                        Accounts by the number in the Joint and Last Survivor
                        Table set forth in Section


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                        1.401(a)(9)-9 of the Treasury regulations, using the
                        Participant's and Spouse's attained ages as of the
                        Participant's and Spouse's birthdays in the Distribution
                        Calendar Year.

            (ii)  Lifetime Required Minimum Distributions Continue Through Year
                  of Participant's Death. Required minimum distributions will be
                  determined under this Section 7.10(c) beginning with the first
                  Distribution Calendar Year and up to and including the
                  Distribution Calendar Year that includes the Participant's
                  date of death.

      (d)   Required Minimum Distributions After Participant's Death

            (i)   Death On or After Date Distributions Begin

                  (A)   Participant Survived by Designated Beneficiary. If the
                        Participant dies on or after the date distributions
                        begin and there is a Designated Beneficiary, the minimum
                        amount that will be distributed for each Distribution
                        Calendar Year after the year of the Participant's death
                        is the quotient obtained by dividing the Participant's
                        Accounts by the longer of the remaining Life Expectancy
                        of the Participant or the remaining Life Expectancy of
                        the Participant's Designated Beneficiary, determined as
                        follows:

                        (I)   The Participant's remaining Life Expectancy is
                              calculated using the age of the Participant in the
                              year of death, reduced by one for each subsequent
                              year.

                        (II)  If the Participant's surviving Spouse is the
                              Participant's sole Designated Beneficiary, the
                              remaining Life Expectancy of the surviving Spouse
                              is calculated for each Distribution Calendar Year
                              after the year of the Participant's death using
                              the surviving Spouse's age as of the Spouse's
                              birthday in that year. For Distribution Calendar
                              Years after the year of the surviving Spouse's
                              death, the remaining Life Expectancy of the
                              surviving Spouse is calculated using the age of
                              the surviving Spouse as of the Spouse's birthday
                              in the calendar year of the Spouse's death,
                              reduced by one for each subsequent calendar year.

                        (III) If the Participant's surviving Spouse is not the
                              Participant's sole Designated Beneficiary, the
                              Designated Beneficiary's remaining Life Expectancy
                              is calculated using the age of the Beneficiary in
                              the year following the year of the Participant's
                              death, reduced by one for each subsequent year.

                  (B)   No Designated Beneficiary. If the Participant dies on or
                        after the date distributions begin and there is no
                        Designated Beneficiary as of September 30 of the year
                        after the year of the Participant's death, the minimum
                        amount that will be distributed for each Distribution
                        Calendar Year after the year of the Participant's death
                        is the quotient obtained by dividing the Participant's
                        Accounts by the Participant's remaining Life Expectancy
                        calculated using the age of the Participant in the year
                        of death, reduced by one for each subsequent year.


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            (ii)  Death Before Date Distributions Begin

                  (A)   Participant Survived by Designated Beneficiary. If the
                        Participant dies before the date distributions begin and
                        there is a Designated Beneficiary, the minimum amount
                        that will be distributed for each Distribution Calendar
                        Year after the year of the Participant's death is the
                        quotient obtained by dividing the Participant's Accounts
                        by the remaining Life Expectancy of the Participant's
                        Designated Beneficiary, determined as provided in
                        Section 7.10(d)(i).

                  (B)   No Designated Beneficiary. If the Participant dies
                        before the date distributions begin and there is no
                        Designated Beneficiary as of September 30 of the year
                        following the year of the Participant's death,
                        distribution of the Participant's entire interest will
                        be completed by December 31 of the calendar year
                        containing the fifth anniversary of the Participant's
                        death.

                  (C)   Death of Surviving Spouse Before Distributions to
                        Surviving Spouse Are Required to Begin. If the
                        Participant dies before the date distributions begin,
                        the Participant's surviving Spouse is the Participant's
                        sole Designated Beneficiary, and the surviving Spouse
                        dies before distributions are required to begin to the
                        surviving Spouse under Section 7.10(b)(ii)(A), this
                        Section 7.10(d)(ii) will apply as if the surviving
                        Spouse were the Participant.

      (e)   Definitions

            For purposes of this Section 7.10, the following words and phrases
            shall have the meanings hereafter ascribed to them:

            (i)   Designated Beneficiary. The individual who is designated as
                  the Beneficiary under Section 1.11 of the Plan and is the
                  Designated Beneficiary under Section 401(a)(9) of the Code and
                  Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

            (ii)  Distribution Calendar Year. A calendar year for which a
                  minimum distribution is required. For distributions beginning
                  before the Participant's death, the first Distribution
                  Calendar Year is the calendar year immediately preceding the
                  calendar year which contains the Participant's Required
                  Beginning Date. For distributions beginning after the
                  Participant's death, the first Distribution Calendar Year is
                  the calendar year in which distributions are required to begin
                  under Section 7.10(b)(ii). The required minimum distribution
                  for the Participant's first Distribution Calendar Year will be
                  made on or before the Participant's Required Beginning Date.
                  The required minimum distribution for other Distribution
                  Calendar Years, including the required minimum distribution
                  for the Distribution Calendar Year in which the Participant's
                  Required Beginning Date occurs, will be made on or before
                  December 31 of that Distribution Calendar Year.

            (iii) Life Expectancy. Life Expectancy as calculated by use of the
                  Single Life Table in Section 1.401(a)(9)-9 of the Treasury
                  regulations.


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      (iv)  Participant's Accounts. The Accounts of the last Valuation Date in
            the calendar year immediately preceding the Distribution Calendar
            Year (valuation calendar year) increased by the amount of any
            contributions made and allocated or Forfeitures allocated to the
            Accounts as of dates in the valuation calendar year after the
            Valuation Date and decreased by distributions made in the valuation
            calendar year after the Valuation Date. The Accounts for the
            valuation calendar year includes any amounts rolled over or
            transferred to the Plan either in the valuation calendar year or in
            the Distribution Calendar Year if distributed or transferred in the
            valuation calendar year.

      (v)   Required Beginning Date. The date specified in Section 7.11(b) or
            (c), whichever is applicable.

7.11  Latest Commencement of Benefits

      (a)   Unless the Participant elects otherwise in accordance with the Plan,
            in no event shall the payment of benefits commence later than the
            sixtieth (60th) day after the close of the Plan Year in which the
            latest of the following events occur: (i) the attainment by the
            Participant of age sixty-five (65), (ii) the tenth (10th)
            anniversary of the year in which the Participant commenced
            participation in the Plan or Prior Plan, or (iii) the termination of
            the Participant's employment with the Employer; provided, however,
            that if the amount of the payment required to commence on the date
            determined under this sentence cannot be ascertained by such date, a
            payment retroactive to such date may be made no later than sixty
            (60) days after the earliest date on which the amount of such
            payment can be ascertained under the Plan.

      (b)   Distributions to five-percent owners:

            The vested interest in the Net Value of the Accounts of a
            five-percent owner (as described in Section 416(i) of the Code and
            determined with respect to the Plan Year ending in the calendar year
            in which such individual attains age seventy and one-half (70-1/2))
            must be distributed or commence to be distributed no later than the
            first day of April following the calendar year in which such
            individual attains age seventy and one-half (70-1/2). The vested
            interest in the Net Value of the Accounts of a Participant who is
            not a five-percent owner (as described in Section 416(i) of the
            Code) for the Plan Year ending in the calendar year in which such
            person attains age seventy and one-half (70-1/2) but who becomes a
            five-percent owner (as described in Section 416(i) of the Code) for
            a later Plan Year must be distributed or commence to be distributed
            no later than the first day of April following the last day of the
            calendar year that includes the last day of the first Plan Year for
            which such individual is a five-percent owner (as described in
            Section 416(i) of the Code).

      (c)   Subject to Section 7.1(f), distributions to other than five-percent
            owners:

            The vested interest in the Net Value of the Accounts of a
            Participant who is not a five-percent owner and who attained age
            seventy and one-half (70-1/2) prior to January 1,


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            1988, must be distributed or commence to be distributed no later
            than the first day of April following the calendar year in which
            occurs the later of: (i) his termination of employment or (ii) his
            attainment of age seventy and one-half (70-1/2).

            Except as otherwise provided in the following paragraph, the vested
            interest in the Net Value of the Accounts of any Participant who
            attains age seventy and one-half (70-1/2) after December 31, 1987,
            must be distributed or commence to be distributed no later than the
            first day of April following the calendar year in which such
            individual attains age seventy and one-half (70-1/2).

            Effective January 1, 1997, an Employee otherwise required to receive
            a distribution under the preceding paragraph, may elect to defer
            distribution of the Net Value of his Accounts to the date of his
            termination of employment.

            Notwithstanding the foregoing, the vested interest in the Net Value
            of the Accounts of (I) any Employee who becomes a Participant on or
            after January 1, 1997 or (II) any Employee who attains age seventy
            and one-half (70-1/2) in a calendar year beginning on or after
            January 1, 2003, must be distributed or commence to be distributed
            no later than the first day of April following the calendar year in
            which occurs the later of: (1) his termination of employment or (2)
            his attainment of age seventy and one-half (70-1/2).

7.12  Manner of Payment of Distributions from the Employer Stock Fund

      Distributions from the Employer Stock Fund shall be made to Participants
      and Beneficiaries in cash, unless the Participant or Beneficiary elects
      that such distributions may be made wholly or partially in shares. If the
      Participant or Beneficiary elects that such distributions may be made
      wholly or partially in shares, subject to such terms and conditions as may
      be established from time to time by the Committee, the maximum number of
      shares to be distributed shall be equal to the number of whole shares that
      could be purchased on the date of distribution based on the fair market
      value of shares determined as of the date of payment and on the fair
      market value of the Participant's Units in the Employer Stock Fund on the
      valuation date preceding the distribution. An amount of money equal to any
      remaining amount of the payment that is less than the fair market value of
      a whole share shall be distributed in cash. For purposes of this Section
      7.12, the fair market value of a share shall be determined on a uniform
      and nondiscriminatory basis in such manner as the Separate Agency may, in
      its discretion, prescribe.


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                                 ARTICLE VIII -
                              LOANS TO PARTICIPANTS

8.1   Definitions and Conditions

      (a)   For purposes of this Article VIII, the following terms and phrases
            shall have the meanings hereafter ascribed to them:

            (i)   "Borrower" means a Participant or a "Party in Interest" (as
                  defined under Section 3(14) of ERISA) who maintains an
                  Account, provided such Participant or Party in Interest is not
                  receiving a benefit payment in the form of installment or
                  annuity payments in accordance with the provisions of Article
                  VII, or a preretirement death benefit in accordance with the
                  provisions of Section 7.8.

            (ii)  "Loan Account" means the separate, individual account
                  established on behalf of a Borrower in accordance with the
                  provisions of Section 8.4(d).

      (b)   To the extent permitted under the provisions of this Article VIII
            and subject to the terms and conditions set forth herein and in
            Section 7.2, a Borrower may request a loan from his Accounts. Any
            loans made in accordance with this Article VIII shall not be subject
            to the provisions of Article VI.

8.2   Loan Amount

      Upon a finding by the Committee that all requirements hereunder have been
      met, a Borrower may request a loan from his Accounts, in an amount up to
      the lesser of: (a) fifty percent (50%) of the Net Value as of the close of
      business on the date the loan is processed of the Before-Tax Contribution
      Account, vested Matching Contribution Account, vested Discretionary
      Employer Contribution Account, Rollover Contribution Account and
      Nonelective Employer Contribution Account, or (b) fifty thousand dollars
      ($50,000), reduced by the highest outstanding loan balance during the
      preceding twelve (12) months. The minimum loan permitted shall be one
      thousand dollars ($1,000).

8.3   Term of Loan

      All loans shall be for a fixed term of not more than five (5) years,
      except that a loan which shall be used to acquire any dwelling which
      within a reasonable time is to be used as the principal residence of the
      Borrower, may, in the discretion of the Committee, be made for a term of
      not more than fifteen (15) years. Interest on a loan shall be based on a
      reasonable rate of interest. Such rate shall be the "prime rate" as set
      forth in the first publication of The Wall Street Journal issued during
      the month in which the Borrower requests the loan, increased by one (1)
      percentage point and rounded to the nearest quarter of one percent (1/4 of
      1%). Such rate shall remain in effect until the Loan Account is closed.


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<PAGE>

                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------

8.4   Operational Provisions

      (a)   An application for a loan shall be filed in the form and manner
            prescribed by the Committee and shall be subject to the fees, if
            any, set forth in Section 9.11. If the Committee shall approve such
            application, the Committee shall establish the amount of such loan
            and such loan shall be effected as of the Valuation Date next
            following receipt by the Trustees.

      (b)   The amount of the loan shall be distributed from the Investment
            Accounts in which the Borrower's Accounts are invested, in the
            following order of priority:

            (i)   Before-Tax Contribution Account;

            (ii)  Rollover Contribution Account;

            (iii) vested Matching Contribution Account;

            (iv)  vested Discretionary Employer Contribution Account;

            (v)   vested Nonelective Employer Contribution Account.

            Distributions from each of the foregoing Accounts shall be made in
            the following order of priority:

                  (A)   by the redemption of Units from each of the Borrower's
                        Accounts in the Trust Fund in the order set forth above,
                        on a pro rata basis from the Investment Accounts
                        thereunder, as were selected by the Participant pursuant
                        to Article VI; and

                  (B)   by the redemption of Units invested in the Employer
                        Stock Fund from each of the Borrower's Accounts invested
                        under the Separate Agreement, in the order set forth
                        above, if selected by the Borrower pursuant to Article
                        VI.

      (c)   The proceeds of a loan shall be distributed to the Borrower as soon
            as practicable after the Valuation Date as of which the loan is
            processed; provided, however, that the Borrower shall have satisfied
            such reasonable conditions as the Committee shall deem necessary,
            including, without limitation: (i) the delivery of an executed
            promissory note for the amount of the loan, including interest,
            payable to the order of the Trustees; (ii) an assignment to the Plan
            of such Borrower's interest in his Accounts to the extent of such
            loan; and (iii) if the Borrower is actively employed by the
            Employer, an authorization to the Employer to make payroll
            deductions in order to repay his loan to the Plan. The
            aforementioned promissory note shall be duly acknowledged and
            executed by the Borrower and shall be held by the Trustees, or the
            Committee as agent for the Trustees, as an asset of the Borrower's
            Loan Account pursuant to subsection (d).


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<PAGE>

                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------

      (d)   A Loan Account shall be established for each Borrower with an
            outstanding loan pursuant to this Article VIII. Each Loan Account
            shall be comprised of a Borrower's (i) executed promissory note and
            (ii) installment payments of principal and interest made pursuant to
            Section 8.5(a). Upon full payment and satisfaction of the
            outstanding Loan Account balance, a Borrower's promissory note shall
            be marked paid in full, returned to the Borrower, and his Loan
            Account thereupon closed.

      (e)   As of each Valuation Date coincident with or next succeeding each
            payment of principal and interest on a loan, the then current
            balance of each Borrower's Loan Account shall be debited by the
            amount of such payment and such amount shall be transferred for
            investment in accordance with Section 8.5(c) to the appropriate
            Borrower's Account. If the Committee established a lien against the
            Borrower's Accounts pursuant to Section 8.6(c), and foreclosure of
            such lien is deferred until the Borrower's Termination of Service
            pursuant to Section 8.6(c)(i), for each month that foreclosure of
            the lien is deferred, the then current balance of the Borrower's
            Loan Account shall be charged with interest on the unpaid principal
            and interest thereon.

      (f)   Only one (1) loan shall be outstanding to any Borrower under this
            Article VIII at any time.

      (g)   Any loans under this Article VIII shall be subject to the
            restrictions of Section 6.5.

8.5   Repayments

      (a)   If the Borrower is on the payroll of the Employer and unless
            otherwise agreed to by the Committee, repayments of loan principal,
            or the unpaid balance thereof, and interest thereon shall be made
            through payroll deductions. The first repayment shall be deducted as
            of the first payroll date occurring no later than three (3) weeks
            after the Committee submits the loan form for processing.

            If the Borrower is not on the payroll of the Employer and unless
            otherwise agreed to by the Committee, repayments of loan principal,
            or the unpaid balance thereof, and interest thereon, shall be made
            in cash or cash equivalencies to the Employer in equal monthly
            installments for payment to his Loan Account.

      (b)   Any amount repaid to the Plan by a Borrower with respect to a loan,
            including interest thereon, shall be invested as if such amount were
            a contribution to be invested in accordance with Section 6.1.

      (c)   With respect to each Borrower's Loan Account, any repayment of
            principal and interest made by a Borrower shall be credited, as of
            the Valuation Date coincident with or next succeeding such payment,
            to the Borrower's Accounts in the order of priority established
            under Section 8.4(b). No Account having a lesser degree of priority
            shall be credited until the Account having the immediately preceding
            degree of priority has


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                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------


            been restored by an amount equal to that which had been borrowed
            from such Account.

      (d)   A Borrower may prepay his entire loan, plus all interest accrued and
            unpaid thereon, as of any Valuation Date. A Borrower will not be
            permitted to make partial prepayments to his or her Loan Account.

      (e)   In the event the Plan is terminated, the entire unpaid principal
            amount of the loan hereunder, together with any accrued and unpaid
            interest thereon, shall become immediately due and payable.

8.6   Default

      (a)   If a Borrower fails to make any payment on any loan when due under
            this Article VIII, the entire unpaid principal amount of such loan,
            together with any accrued and unpaid interest thereon, shall be
            deemed in default and become due and payable ninety (90) days after
            the initial date of payment delinquency.

      (b)   If a Borrower fails to make any payment on a loan and is deemed to
            be in default pursuant to subsection (a), the Committee shall
            establish a lien against the Borrower's Accounts in an amount equal
            to any unpaid principal and interest. The lien shall be foreclosed
            by applying the value of the Borrower's Loan Account (determined as
            of the next Valuation Date immediately following foreclosure) in
            satisfaction of said unpaid principal and interest as follows:

            (i)   if the Borrower is in the employment of the Employer, upon the
                  Borrower's Termination of Service; or

            (ii)  if the Borrower is not in the employment of the Employer,
                  immediately upon default.

            Thereupon, the vested interest in the balance of the Borrower's
            Accounts shall be distributed in accordance with the applicable
            provisions of the Plan.

      (c)   The Committee may, in accordance with uniform rules established by
            it, restrict the right of any Borrower who has defaulted on a loan
            from the Plan to: (i) make withdrawals and/or loans from his
            Matching Contribution Account, Before-Tax Contribution Account,
            Discretionary Employer Contribution Account, Nonelective Employer
            Contribution Account and/or Rollover Contribution Account for a
            period not exceeding twelve (12) months or (ii) if the Borrower is
            an Eligible Employee, authorize Before-Tax Contributions to be made
            on his behalf or make any other contributions to the Plan for a
            period not exceeding twelve (12) months.


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                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------

8.7   Coordination of Outstanding Account and Payment of Benefits

      (a)   If the Borrower has an outstanding Loan Account and is either (i)
            scheduled to receive or elects to receive a lump sum distribution in
            accordance with the provisions of Article VII, or (ii) scheduled to
            receive the last installment payment under a previous election made
            in accordance with the provisions of Article VII to receive payments
            in a form other than the normal form of benefit payments, then, at
            the time of the distribution or payment under clause (i) or (ii)
            above, the entire unpaid principal amount of the loan together with
            any accrued and unpaid interest thereon, shall become immediately
            due and payable. No Plan distribution, except as permitted under
            Section 7.3 or Section 7.4, shall be made to any Borrower unless and
            until such Borrower's Loan Account, including accrued interest
            thereunder, has been liquidated and closed. If a Borrower fails to
            pay the outstanding balance of his Loan Account hereunder, such loan
            shall be satisfied as if a default had occurred pursuant to Section
            8.6.

      (b)   Any reference in the Plan to the Net Value of Units in a Borrower's
            Accounts available for distribution to any Borrower, shall mean the
            value after the satisfaction of the entire unpaid principal loan
            amount and any accrued, unpaid interest thereon, as provided in this
            Article VIII.


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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

                                  ARTICLE IX -
                                 ADMINISTRATION

9.1   General Administration of the Plan

      The operation and administration of the Plan shall be subject to the
      management and control of the Named Fiduciaries and Plan Administrator
      designated by the Sponsoring Employer. The designation of such Named
      Fiduciaries and Plan Administrator, the terms of their appointment, and
      their duties and responsibilities allocated among them shall be as set
      forth in this Article IX. Any actions taken hereunder shall be conclusive
      and binding on Participants, Retired Participants, Employees,
      Beneficiaries and other persons, and shall not be overturned unless found
      to be arbitrary and capricious by a court of competent jurisdiction.

9.2   Designation of Named Fiduciaries

      The management and control of the operation and administration of the Plan
      shall be allocated in the following manner:

      (a)   The Sponsoring Employer shall designate the Trustees as a Named
            Fiduciary to perform those functions set forth in the Plan or the
            Agreement which are applicable to a Plan of Partial Participation.

      (b)   The Sponsoring Employer shall designate the Separate Agency to
            perform those functions relating to the Separate Agency in the Plan
            or the Separate Agreement.

      (c)   The Sponsoring Employer shall designate one or more individuals to
            serve as member(s) of an employee benefits Committee to perform
            those functions set forth in the Agreement, Separate Agreement or
            the Plan that are assigned to such Committee.

      (d)   A Trust Participant (as defined under the Agreement) may delegate to
            a person or persons the duties and responsibilities for voting Units
            set forth under the Agreement and Separate Agreement.

      (e)   The Sponsoring Employer shall designate the Separate Agency as a
            Named Fiduciary to perform those functions set forth in the Separate
            Agreement or the Plan that are assigned to the Separate Agency,
            including the voting and tender of shares of the Employer Stock.

9.3   Responsibilities of Fiduciaries

      The Named Fiduciaries and Plan Administrator shall have only those powers,
      duties, responsibilities and obligations that are specifically allocated
      to them under the Plan, the Agreement or the Separate Agreement.


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                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

      To the extent permitted by ERISA, each Named Fiduciary and Plan
      Administrator may rely upon any direction, information or action of
      another Named Fiduciary, Plan Administrator or the Sponsoring Employer as
      being proper under the Plan, the Agreement or the Separate Agreement and
      is not required to inquire into the propriety of any such direction,
      information or action and no Named Fiduciary or Plan Administrator shall
      be responsible for any act or failure to act of another Named Fiduciary,
      Plan Administrator or the Sponsoring Employer.

      No Named Fiduciary, Plan Administrator or the Employer guarantees the
      Trust Fund or Separate Assets in any manner against investment loss or
      depreciation in asset value.

      The allocation of responsibility between the Trustees and the Sponsoring
      Employer or between the Separate Agency and the Sponsoring Employer may be
      changed by written agreement. Such reallocation shall be evidenced by
      Employer Resolutions and shall not be deemed an amendment to the Plan.

      To the extent permitted by ERISA, the Trustees shall have no liability or
      responsibility with respect to the administration of any Separate Assets
      held outside the Trust except as specifically set forth in the Agreement.
      The authority and responsibility of the Trustees extend only to those Plan
      assets held in accordance with the Agreement.

9.4   Plan Administrator

      The Sponsoring Employer shall designate the Trustees as the Trustee
      Administrator to perform those functions applicable to Plans of Partial
      Participation as set forth in the Agreement. The Sponsoring Employer shall
      also designate one or more persons to act as Plan Administrator and to
      perform those functions set forth in the Agreement, the Plan or the
      Separate Agreement that are assigned to the Plan Administrator.

      The duties and responsibilities of a plan administrator under ERISA shall
      be allocated between the Plan Administrator and the Trustee Administrator
      as set forth herein or in the Agreement. Such allocation may be changed
      only by written agreement between the parties and shall not be deemed an
      amendment to the Plan.

      The Plan Administrator shall be solely responsible for monitoring and
      notifying the Trustees of an Employee's age for all purposes under the
      Plan.

      The Plan Administrator is designated as the Plan's agent for the service
      of legal process.

9.5   Committee

      The members of the Committee designated by the Sponsoring Employer under
      Section 9.2(b) shall serve for such term(s) as the Sponsoring Employer
      shall determine and until their successors are designated and qualified.
      The term of any member of the Committee may be renewed from time to time
      without limitation as to the number of renewals. Any member of the
      Committee may (a) resign upon at least sixty (60) days written notice to
      the Sponsoring Employer or (b) be removed from office but only for his
      failure or inability, in the opinion of the Sponsoring


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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

      Employer, to carry out his responsibilities in an effective manner.
      Termination of employment with the Employer shall be deemed to give rise
      to such failure or inability.

      The powers and duties allocated to the Committee shall be vested jointly
      and severally in its members. Notwithstanding specific instructions to the
      contrary, any instrument or document signed on behalf of the Committee by
      any member of the Committee may be accepted and relied upon by the
      Trustees and Separate Agency as the act of the Committee. The Trustees and
      Separate Agency shall not be required to inquire into the propriety of any
      such action taken by the Committee nor shall they be held liable for any
      actions taken by them in reliance thereon.

      The Sponsoring Employer may, pursuant to Employer Resolutions and upon
      notice to the Trustees, change the number of individuals comprising the
      Committee, their terms of office or other conditions of their incumbency
      provided that there shall be at all times at least one individual member
      of the Committee. Any such change shall not be deemed an amendment to the
      Plan.

9.6   Powers and Duties of the Committee

      The Committee shall have authority to perform all acts it may deem
      necessary or appropriate in order to exercise the duties and powers
      imposed or granted by ERISA, the Plan, the Agreement, the Separate
      Agreement or any Employer Resolutions. Such duties and powers shall
      include, but not be limited to, the following:

      (a)   Power to Construe - Except as otherwise provided in the Agreement,
            or the Separate Agreement, the Committee shall have the power to
            construe the provisions of the Plan and to determine any questions
            of fact which may arise thereunder.

      (b)   Power to Make Rules and Regulations - The Committee shall have the
            power to make such reasonable rules and regulations as it may deem
            necessary or appropriate to perform its duties and exercise its
            powers. Such rules and regulations shall include, but not be limited
            to, those governing (i) the manner in which the Committee shall act
            and manage its own affairs, (ii) the procedures to be followed in
            order for Employees or Beneficiaries to claim benefits, and (iii)
            the procedures to be followed by Participants, Beneficiaries or
            other persons entitled to benefits with respect to notifications,
            elections, designations or other actions required by the Plan or
            ERISA. All such rules and regulations shall be applied in a uniform
            and nondiscriminatory manner.

      (c)   Powers and Duties with Respect to Information - The Committee shall
            have the power and responsibility:

            (i)   to obtain such information as shall be necessary for the
                  proper discharge of its duties;


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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

            (ii)  to furnish to the Employer, upon request, such reports as are
                  reasonable and appropriate;

            (iii) to receive, review and retain periodic reports of the
                  financial condition of the Plan Funds; and

            (iv)  to receive, collect and transmit to the Trustees all
                  information required by the Trustees in the administration of
                  the Accounts of the Employee as contemplated in Section 9.7.

      (d)   Power of Delegation - The Committee shall have the power to delegate
            fiduciary responsibilities (other than trustee responsibilities
            defined under Section 405(c)(3) of ERISA) to one or more persons who
            are not members of the Committee. Unless otherwise expressly
            indicated by the Sponsoring Employer, the Committee must reserve the
            right to terminate such delegation upon reasonable notice.

      (e)   Power of Allocation - Subject to the written approval of the
            Sponsoring Employer, the Committee shall have the power to allocate
            among its members specified fiduciary responsibilities (other than
            trustee responsibilities defined under Section 405(c)(3) of ERISA).
            Any such allocation shall be in writing and shall specify the
            persons to whom such allocation is made and the terms and conditions
            thereof.

      (f)   Duty to Report - Any member of the Committee to whom specified
            fiduciary responsibilities have been allocated under subsection (e)
            shall report to the Committee at least annually. The Committee shall
            report to the Sponsoring Employer at least annually regarding the
            performance of its responsibilities as well as the performance of
            any persons to whom any powers and responsibilities have been
            further delegated.

      (g)   Power to Employ Advisors and Retain Services - The Committee may
            employ such legal counsel, enrolled actuaries, accountants, pension
            specialists, clerical help and other persons as it may deem
            necessary or desirable in order to fulfill its responsibilities
            under the Plan.

9.7   Certification of Information

      The Committee shall certify to the Trustees on such periodic or other
      basis as may be agreed upon, but in no event later than ten (10) days
      before any Valuation Date as of which the Trustees must effect any action
      with respect to any Accounts held under the provisions of the Plan,
      relevant facts regarding the establishment of the Accounts of an Employee,
      periodic contributions with respect to such Accounts, investment elections
      and modifications thereof and withdrawals and distributions therefrom. The
      Trustees shall be fully protected in maintaining individual Account
      records and in administering the Accounts of the Employee on the basis of
      such certifications and shall have no duty of inquiry or otherwise with
      respect to any transactions


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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

      or communications between the Committee and Employees relating to the
      information contained in such certifications.

9.8   Authorization of Benefit Payments

      The Committee shall forward to the Trustees and, if applicable, any
      Separate Agency, any application for payment of benefits within a
      reasonable time after it has approved such application. The Trustees and
      Separate Agency may rely on any such information set forth in the approved
      application for the payment of benefits to the Participant, Beneficiary or
      any other person entitled to benefits.

9.9   Payment of Benefits to Legal Custodian

      Whenever, in the Committee's opinion, a person entitled to receive any
      benefit payment is a minor or deemed to be physically, mentally or legally
      incompetent to receive such benefit, the Committee may direct the Trustees
      and Separate Agency to make payment for his benefit to such individual or
      institution having legal custody of such person or to his legal
      representative. Any benefit payment made in accordance with the provisions
      of this Section 9.9 shall operate as a valid and complete discharge of any
      liability for payment of such benefit under the provisions of the Plan.

9.10  Service in More Than One Fiduciary Capacity

      Any person or group of persons may serve in more than one fiduciary
      capacity with respect to the Plan, regardless of whether any such person
      is an officer, employee, agent or other representative of a party in
      interest.

9.11  Payment of Expenses

      The Employer will pay the ordinary administrative expenses of the Plan and
      compensation of the Trustees to the extent required, except that any
      expenses directly related to the Trust Fund, such as transfer taxes,
      brokers' commissions, registration charges, or administrative expenses of
      the Trustees (including expenses of counsel retained by it in accordance
      with the Agreement), shall be paid from the Trust Fund or from such
      Investment Account to which such expenses directly relate.

      The Employer may, if determined by the Committee, charge Employees all or
      part of the reasonable expenses associated with withdrawals and other
      distributions or Account transfers. The Employer will charge Employees
      loan origination fees and all annual maintenance fees associated with
      loans.

      Brokerage commissions incurred in connection with the Employer Stock Fund
      shall be paid by the Employer.


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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

9.12  Administration of Separate Assets

      The Committee and the Separate Agency shall be solely responsible for the
      administration of the Separate Assets, including the administration,
      collection and enforcement of any loans held therein. All contributions to
      and withdrawals or disbursements from the Separate Assets shall be made
      directly to or by the Separate Agency.

      The Trustees may, as agreed upon with the Committee, provide such combined
      or coordinated Plan records and reports, which include the Separate
      Assets. The Trustees shall be fully protected in relying upon any
      information provided to them by the Committee or Separate Agency with
      respect to such Separate Assets. The inclusion of any information
      pertaining to Separate Assets in such combined or coordinated Plan records
      and reports shall not increase the responsibility or liability of the
      Trustees with respect to the Separate Assets. If Plan Funds may be
      transferred between the Separate Assets and the other Investment Accounts,
      the manner in which such transfers may be made must be agreed to in a
      written instrument entered into among the Committee, the Trustees and the
      Separate Agency.


--------------------------------------------------------------------------------
787                                  76              Carver Federal Savings Bank
<PAGE>

                                                                     Article X -
                                                        Benefit Claims Procedure
--------------------------------------------------------------------------------

                                   ARTICLE X -
                            BENEFIT CLAIMS PROCEDURE

10.1  Definition

      For purposes of this Article X, "Claimant" shall mean any Participant,
      Beneficiary or any other person entitled to benefits under the Plan or his
      duly authorized representative.

10.2  Claims

      A Claimant may file a written claim for a Plan benefit with the Plan
      Administrator on the appropriate form to be supplied by the Plan
      Administrator. The Plan Administrator shall, in its sole and absolute
      discretion, review the Claimant's application for benefits and determine
      the disposition of such claim.

10.3  Disposition of Claim

      The Plan Administrator shall notify the Claimant as to the disposition of
      the claim for benefits under this Plan within ninety (90) days after the
      appropriate form has been filed unless special circumstances require an
      extension of time for processing. If such an extension of time is
      required, the Plan Administrator shall furnish written notice of the
      extension to the Claimant prior to the termination of the initial ninety
      (90) day period. The extension notice shall indicate the special
      circumstances requiring the extension of time and the date the Plan
      Administrator expects to render a decision. In no event shall such
      extension exceed a period of one hundred-eighty (180) days from the
      receipt of the claim.

10.4  Denial of Claim

      If a claim for benefits under this Plan is denied in whole or in part by
      the Plan Administrator, a notice written in a manner calculated to be
      understood by the Claimant shall be provided by the Plan Administrator to
      the Claimant and such notice shall include the following:

      (a)   a statement that the claim for the benefits under this Plan has been
            denied;

      (b)   the specific reasons for the denial of the claim for benefits,
            citing the specific provisions of the Plan which set forth the
            reason or reasons for the denial;

      (c)   a description of any additional material or information necessary
            for the Claimant to perfect the claim for benefits under this Plan
            and an explanation of why such material or information is necessary;
            and

      (d)   appropriate information as to the steps to be taken if the Claimant
            wishes to appeal such decision.


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<PAGE>

                                                                     Article X -
                                                        Benefit Claims Procedure
--------------------------------------------------------------------------------

10.5  Inaction by Plan Administrator

      A claim for benefits shall be deemed to be denied if the Plan
      Administrator shall not take any action on such claim within ninety (90)
      days after receipt of the application for benefits by the Claimant or, if
      later, within the extended processing period established by the Plan
      Administrator by written notice to the Claimant, in accordance with
      Section 10.3.

10.6  Right to Full and Fair Review

      A Claimant who is denied, in whole or in part, a claim for benefits under
      the Plan may file an appeal of such denial. Such appeal must be made in
      writing by the Claimant or his duly authorized representative and must be
      filed with the Committee within sixty (60) days after receipt of the
      notification under Section 10.4 or the date his claim is deemed to be
      denied under Section 10.5. The Claimant or his representative may review
      pertinent documents and submit issues and comments in writing.

10.7  Time of Review

      The Committee, independent of the Plan Administrator, shall conduct a full
      and fair review of the denial of claim for benefits under this Plan to a
      Claimant within sixty (60) days after receipt of the written request for
      review described in Section 10.6; provided, however, that an extension,
      not to exceed sixty (60) days, may apply in special circumstances. Written
      notice shall be furnished to the Claimant prior to the commencement of the
      extension period.

10.8  Final Decision

      The Claimant shall be notified in writing of the final decision of such
      full and fair review by such Committee. Such decision shall be written in
      a manner calculated to be understood by the Claimant, shall state the
      specific reasons for the decision and shall include specific references to
      the pertinent Plan provisions upon which the decision is based. In no
      event shall the decision be furnished to the Claimant later than sixty
      (60) days after the receipt of a request for review, unless special
      circumstances require an extension of time for processing, in which case a
      decision shall be rendered within one hundred-twenty (120) days after
      receipt of such request for review.


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787                                  78              Carver Federal Savings Bank
<PAGE>

                                                                    Article XI -
                                          Amendment, Termination, and Withdrawal
--------------------------------------------------------------------------------

                                  ARTICLE XI -
                     AMENDMENT, TERMINATION, AND WITHDRAWAL

11.1  Amendment and Termination

      The Employer expects to continue the Plan indefinitely, but specifically
      reserves the right, in its sole and absolute discretion, at any time, by
      appropriate action of the Board, to terminate its Plan or to amend
      (subject to the approval of the Trustees), in whole or in part, any or all
      of the provisions of the Plan. Subject to the provisions of Section 13.7,
      no such amendment or termination shall permit any part of the Plan Funds
      to be used for or diverted to purposes other than for exclusive benefit of
      Participants, Beneficiaries or other persons entitled to benefits, and no
      such amendment or termination shall reduce the interest of any
      Participant, Beneficiary or other person who may be entitled to benefits,
      without his consent. In the event of a partial termination of the Plan, or
      upon complete discontinuance of contributions under the Plan, the Accounts
      of each affected Participant shall become fully vested and shall be
      distributable in accordance with the provisions of Article VII. In the
      event of a complete termination of the Plan, the Accounts of each affected
      Participant shall become fully vested and shall be distributable as a lump
      sum distribution within seven (7) days of the Valuation Date coincident
      with the date of receipt by the Trustees of the proper documentation
      indicating the Participant's distribution date.

      If any amendment changes the vesting schedule, any Participant who has a
      Period of Service of three (3) or more years may, by filing a written
      request with the Employer, elect to have his vested percentage computed
      under the vesting schedule in effect prior to the amendment.

      The period during which the Participant may elect to have his vested
      percentage computed under the prior vesting schedule shall commence with
      the date the amendment is adopted and shall end on the latest of:

      (a)   sixty (60) days after the amendment is adopted;

      (b)   sixty (60) days after the amendment becomes effective; or

      (c)   sixty (60) days after the Participant is issued written notice of
            the amendment from the Employer.

11.2  Withdrawal from the Trust Fund

      An Employer may withdraw its Plan from the Trust Fund in accordance with
      and subject to the provisions of the Agreement.


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                                                                   Article XII -
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                                  ARTICLE XII -
                            TOP-HEAVY PLAN PROVISIONS

12.1  Introduction

      Any other provisions of the Plan to the contrary notwithstanding, the
      provisions contained in this Article XII shall be effective with respect
      to any Plan Year in which this Plan is a Top-Heavy Plan, as hereinafter
      defined.

12.2  Definitions

      For purposes of this Article XII, the following words and phrases shall
      have the meanings stated herein unless a different meaning is plainly
      required by the context.

      (a)   "Account," for the purpose of determining the Top-Heavy Ratio, means
            the sum of (i) a Participant's Accounts as of the most recent
            Valuation Date and (ii) an adjustment for contributions due as of
            the Determination Date.

      (b)   "Determination Date" means, with respect to any Plan Year, the last
            day of the preceding Plan Year. With respect to the first Plan Year,
            "Determination Date" means the last day of such Plan Year.

      (c)   "Five-Percent Owner" means, if the Employer is a corporation, any
            Employee who owns (or is considered as owning within the meaning of
            Section 318 of the Code modified by Section 416(i)(1)(B)(iii) of the
            Code) more than five percent (5%) of the value of the outstanding
            stock of, or more than five percent (5%) of the total combined
            voting power of all the stock of, the Employer. If the Employer is
            not a corporation, a Five-Percent Owner means any Employee who owns
            more than five percent (5%) of the capital or profits interest in
            the Employer.

      (d)   "Key Employee" means any Employee or former Employee (or, where
            applicable, such person's Beneficiary) in the Plan who, at any time
            during the Plan Year containing the Determination Date or any of the
            preceding four (4) Plan Years, is: (i) an Officer having Top-Heavy
            Earnings from the Employer of greater than fifty percent (50%) of
            the dollar limitation in effect under Section 415(b)(1)(A) of the
            Code; (ii) one of the ten (10) Employees having Top-Heavy Earnings
            from the Employer of more than the dollar limitation in effect under
            Section 415(c)(1)(A) of the Code and owning (or considered as owning
            within the meaning of Section 318 of the Code modified by Section
            416(i)(1)(B)(iii) of the Code) both more than a one-half of one
            percent (1/2%) interest in value and the largest interests in the
            value of the Employer; (iii) a Five-Percent Owner of the Employer;
            or (iv) a One-Percent Owner of the Employer having Top-Heavy
            Earnings from the Employer greater than one hundred fifty thousand
            dollars ($150,000). For purposes of computing the Top-Heavy Earnings
            in subsections (d)(i), (d)(ii) and


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                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
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            (d)(iv), the aggregation rules of Sections 414(b), (c), (m) and (o)
            of the Code shall apply.

      (e)   "Non-Key Employee" means an Employee or former Employee (or, where
            applicable, such person's Beneficiary) who is not a Key Employee.

      (f)   "Officer" means an Employee who is an administrative executive in
            the regular and continued service of his Employer; any Employee who
            has the title but not the authority of an officer shall not be
            considered an Officer for purposes of this Article XII. Similarly,
            an Employee who does not have the title of an officer but has the
            authority of an officer shall be considered an Officer. For purposes
            of this Article XII, the maximum number of Officers that must be
            taken into consideration shall be determined as follows: (i) three
            (3), if the number of Employees is less than thirty (30); (ii) ten
            percent (10%) of the number of Employees, if the number of Employees
            is between thirty (30) and five hundred (500); or (iii) fifty (50),
            if the number of Employees is greater than five hundred (500). In
            determining such limit, the term "Employer" shall be determined in
            accordance with Sections 414(b), (c), (m) and (o) of the Code and
            "Employee" shall include Leased Employees and exclude employees
            described in Section 414(q)(5) of the Code.

      (g)   "One-Percent Owner" means, if the Employer is a corporation, any
            Employee who owns (or is considered as owning within the meaning of
            Section 318 of the Code modified by Section 416(i)(1)(B)(iii) of the
            Code) more than one percent (1%) of the value of the outstanding
            stock of, or more than one percent (1%) of the total combined voting
            power of all the stock of, the Employer. If the Employer is not a
            corporation, a One-Percent Owner means any Employee who owns more
            than one percent (1%) of the capital or profits interest in the
            Employer.

      (h)   A "Permissive Aggregation Group" consists of one or more plans of
            the Employer that are part of a Required Aggregation Group, plus one
            or more plans that are not part of a Required Aggregation Group but
            that satisfy the requirements of Sections 401(a)(4) and 410 of the
            Code when considered together with the Required Aggregation Group.
            If two (2) or more defined benefit plans are included in the
            aggregation group, the same actuarial assumptions must be used with
            respect to all such plans in determining the Present Value of
            Accrued Benefits.

      (i)   "Present Value of Accrued Benefits" shall be determined in
            accordance with the actuarial assumptions set forth in the defined
            benefit plan and the assumed benefit commencement date shall be
            determined taking into account any nonproportional subsidy. The
            accrued benefit of any Employee shall be determined under the method
            used for accrual purposes for all plans of the Employer, or if no
            such method is described, as if such benefit accrued not more
            rapidly than the slowest accrual rate permitted under Section
            411(b)(1)(C) of the Code.


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                                                                   Article XII -
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      (j)   "Related Rollover Contributions" means rollover contributions
            received by the Plan that are not initiated by the Employee nor made
            from another plan maintained by the Employer.

      (k)   A "Required Aggregation Group" consists of each plan of the Employer
            (whether or not terminated) in which a Key Employee participates or
            participated at any time during the Plan Year containing the
            Determination Date or any of the four (4) preceding Plan Years and
            each other plan of the Employer (whether or not terminated) which
            enables any plan in which a Key Employee participates or
            participated to meet the requirements of Section 401(a)(4) or 410 of
            the Code. If two (2) or more defined benefit plans are included in
            the aggregation group, the same actuarial assumptions must be used
            with respect to all such plans in determining the Present Value of
            Accrued Benefits.

      (l)   A "Super Top-Heavy Plan" means a Plan in which, for any Plan Year:

            (i)   the Top-Heavy Ratio (as defined under subsection (o)) for the
                  Plan exceeds ninety percent (90%) and the Plan is not part of
                  any Required Aggregation Group (as defined under subsection
                  (k)) or Permissive Aggregation Group (as defined under
                  subsection (h)); or

            (ii)  the Plan is a part of a Required Aggregation Group (but is not
                  part of a Permissive Aggregation Group) and the Top-Heavy
                  Ratio for the group of plans exceeds ninety percent (90%); or

            (iii) the Plan is a part of a Required Aggregation Group and part of
                  a Permissive Aggregation Group and the Top-Heavy Ratio for the
                  Permissive Aggregation Group exceeds ninety percent (90%).

      (m)   "Top-Heavy Earnings" means, for any year, compensation as defined
            under Section 414(q)(4) of the Code, up to a maximum of one hundred
            sixty thousand dollars ($160,000) for the 1997, 1998 and 1999 Plan
            Years and one hundred seventy thousand dollars ($170,000) for the
            2000 and 2001 Plan Years, adjusted in multiples of ten thousand
            dollars ($10,000) for increases in the cost-of-living, as prescribed
            by the Secretary of the Treasury under Section 401(a)(17)(B) of the
            Code.

      (n)   A "Top-Heavy Plan" means a Plan in which, for any Plan Year:

            (i)   the Top-Heavy Ratio (as defined under subsection (o)) for the
                  Plan exceeds sixty percent (60%) and the Plan is not part of
                  any Required Aggregation Group (as defined under subsection
                  (k)) or Permissive Aggregation Group (as defined under
                  subsection (h)); or

            (ii)  the Plan is a part of a Required Aggregation Group but is not
                  part of a Permissive Aggregation Group and the Top-Heavy Ratio
                  for the group of plans exceeds sixty percent (60%); or


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                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
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            (iii) the Plan is a part of a Required Aggregation Group and part of
                  a Permissive Aggregation Group and the Top-Heavy Ratio for the
                  Permissive Aggregation Group exceeds sixty percent (60%).

      (o)   "Top-Heavy Ratio" means:

            (i)   if the Employer maintains one or more qualified defined
                  contribution plans and the Employer has not maintained any
                  qualified defined benefit plans which during the five (5) year
                  period ending on the Determination Date have or have had
                  accrued benefits, the Top-Heavy Ratio for the Plan alone or
                  for the Required Aggregation Group or Permissive Aggregation
                  Group, as appropriate, is a fraction, the numerator of which
                  is the sum of the Account balances under the aggregated
                  defined contribution plan or plans for all Key Employees as of
                  the Determination Date, including any part of any Account
                  balance distributed in the five (5) year period ending on the
                  Determination Date but excluding distributions attributable to
                  Related Rollover Contributions, if any, and the denominator of
                  which is the sum of all Account balances under the aggregated
                  qualified defined contribution plan or plans for all
                  Participants as of the Determination Date, including any part
                  of any Account balance distributed in the five (5) year period
                  ending on the Determination Date but excluding distributions
                  attributable to Related Rollover Contributions, if any,
                  determined in accordance with Section 416 of the Code and the
                  regulations thereunder.

            (ii)  if the Employer maintains one or more qualified defined
                  contribution plans and the Employer maintains or has
                  maintained one or more qualified defined benefit plans which
                  during the five (5) year period ending on the Determination
                  Date have or have had any accrued benefits, the Top-Heavy
                  Ratio for any Required Aggregation Group or Permissive
                  Aggregation Group, as appropriate, is a fraction, the
                  numerator of which is the sum of the Account balances under
                  the aggregated qualified defined contribution plan or plans
                  for all Key Employees, determined in accordance with (i)
                  above, and the sum of the Present Value of Accrued Benefits
                  under the aggregated qualified defined benefit plan or plans
                  for all Key Employees as of the Determination Date, and the
                  denominator of which is the sum of the Account balances under
                  the aggregated qualified defined contribution plan or plans
                  determined in accordance with (i) above, for all Participants
                  and the sum of the Present Value of Accrued Benefits under the
                  aggregated qualified defined benefit plan or plans for all
                  Participants as of the Determination Date, all determined in
                  accordance with Section 416 of the Code and the regulations
                  thereunder. The accrued benefits under a qualified defined
                  benefit plan in both the numerator and denominator of the
                  Top-Heavy Ratio are adjusted for any distribution of an
                  accrued benefit made in the five (5) year period ending on the
                  Determination Date.


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                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
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            (iii) For purposes of (i) and (ii) above, the value of Account
                  balances and the Present Value of Accrued Benefits will be
                  determined as of the most recent Valuation Date that falls
                  within the twelve (12) month period ending on the
                  Determination Date, except as provided in Section 416 of the
                  Code and the regulations thereunder for the first and second
                  Plan Years of a qualified defined benefit plan. The Account
                  balances and Present Value of Accrued Benefits of a
                  Participant (A) who is a Non-Key Employee but who was a Key
                  Employee in a prior year, or (B) who has not been credited
                  with at least an Hour of Service with any employer maintaining
                  the Plan at any time during the five (5) year period ending on
                  the Determination Date will be disregarded. The calculation of
                  the Top-Heavy Ratio, and the extent to which distributions,
                  rollovers, and transfers are taken into account will be made
                  in accordance with Section 416 of the Code and the regulations
                  thereunder. When aggregating plans, the value of Account

                  balances and the Present Value of Accrued Benefits will be
                  calculated with reference to the Determination Date that falls
                  within the same calendar year.

      (p)   "Valuation Date", for the purpose of computing the Top-Heavy Ratio
            (as defined under subsection (o)) under subsections (1) and (n)
            means the last date of the Plan Year.

      For purposes of subsections (h), (j) and (k), the rules of Sections
      414(b), (c), (m) and (o) of the Code shall be applied in determining the
      meaning of the term "Employer."

12.3  Minimum Contributions

      If the Plan becomes a Top-Heavy Plan, then any provision of Article III to
      the contrary notwithstanding, the following provisions shall apply:

      (a)   Subject to subsection (b), the Employer shall contribute on behalf
            of each Participant who is employed by the Employer on the last day
            of the Plan Year and who is a Non-Key Employee an amount with
            respect to each Top-Heavy year which, when added to the amount of
            Special Contributions, Nonelective Employer Contributions,
            Discretionary Employer Contributions and Forfeitures made on behalf
            of such Participant, shall not be less than the lesser of: (i) three
            percent (3%) of such Participant's Section 415 Compensation (as
            defined under Section 3.12(a)(vii) of the Plan and modified by
            Section 401(a)(17) of the Code), or (ii) if the Employer has no
            defined benefit plan which is designated to satisfy Section 416 of
            the Code, the largest of the total of each Key Employee's Matching
            Contributions, Before-Tax Contributions, Special Contributions,
            Nonelective Employer Contributions, Discretionary Employer
            Contributions and Forfeitures, as a percentage of the Key Employees'
            Top-Heavy Earnings; provided, however, that in no event shall any
            contributions be made under this Section 12.3 in an amount which
            will cause the percentage of contributions made by the Employer on
            behalf of any Participant who is a Non-Key Employee to exceed the
            percentage at which contributions are made by the Employer on behalf
            of the Key


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                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
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            Employee for whom the percentage of the total of Matching
            Contributions, Before-Tax Contributions, Special Contributions,
            Discretionary Employer Contributions, Nonelective Employer
            Contributions and Forfeitures, is highest in such Top-Heavy year.
            Any such contribution shall be allocated to the Matching
            Contribution Account of each such Participant and, for purposes of
            vesting and withdrawals only, shall be deemed to be a Matching
            Contribution. Any such contribution shall not be deemed to be a
            Matching Contribution for any other purpose.

      (b)   Notwithstanding the foregoing, this Section 12.3 shall not apply to
            any Participant to the extent that such Participant is covered under
            any other plan or plans of the Employer (determined in accordance
            with Sections 414(b), (c), (m) and (o) of the Code) and such other
            plan provides that the minimum allocation or benefit requirement
            will be met by such other plan should this Plan become Top-Heavy. If
            such other plan does not provide for a minimum allocation or benefit
            requirement, a minimum of five percent (5%) of a Participant's
            Section 415 Compensation, as defined in Section 12.3(a) above, shall
            be provided under this Plan.

      (c)   For purposes of this Article XII, the following shall be considered
            as a contribution made by the Employer:

            (i)   Qualified Nonelective Contributions;

            (ii)  Matching Contributions made by the Employer on behalf of Key
                  Employees; and

            (iii) Before-Tax Contributions made by the Employer on behalf of Key
                  Employees;

            (iv)  Discretionary Employer Contributions made by the Employer on
                  behalf of Key Employees and Non-Key Employees; and

            (v)   Nonelective Employer Contributions made by the Employer on
                  behalf of Key Employees and Non-Key Employees.

      (d)   Subject to the provisions of subsection (b), all Non-Key Employee
            Participants who are employed by the Employer on the last day of the
            Plan Year shall receive the defined contribution minimum provided
            under subsection (a). A Non-Key Employee may not fail to accrue a
            defined contribution minimum merely because such Employee was
            excluded from participation or failed to accrue a benefit because
            (i) his Compensation is less than a stated amount, or (ii) he failed
            to make Before-Tax Contributions.

12.4  Impact on Section 415 Maximum Benefits

      For any Plan Year commencing prior to January 1, 2000, in which the Plan
      is a Super Top-Heavy Plan, Sections 3.12(a)(iv) and (v) shall be read by
      substituting the number l.0 for the number 1.25 wherever it appears
      therein.


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                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
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      For any Plan Year in which the Plan is a Top-Heavy Plan but not a Super
      Top-Heavy Plan, the Plan shall be treated as a Super Top-Heavy Plan under
      this Section 12.4, unless each Non-Key Employee who is entitled to a
      minimum contribution or benefit receives an additional minimum
      contribution or benefit. If the Non-Key Employee is entitled to a minimum
      contribution under Section 12.3(a), the Plan shall not be treated as a
      Super Top-Heavy Plan under this Section 12.4 if the minimum contribution
      satisfies Section 12.3(a) when four percent (4%) is substituted for three
      percent (3%) in Section 12.3(a)(i). If the Non-Key Employee is entitled to
      a minimum contribution under Section 12.3(b), the Plan shall not be
      treated as a Super Top-Heavy Plan under this Section 12.4, if the minimum
      contribution satisfies Section 12.3(b) when seven and one-half percent
      (7-1/2%) is substituted for five percent (5%).

12.5  Vesting

      If the Plan becomes a Top-Heavy Plan, then, notwithstanding Section
      4.1(c), the Vested Percentage of a Participant who has at least one (1)
      Hour of Service with the Employer after the Plan becomes Top-Heavy shall
      not be less than the following Vested Percentage of his accrued benefit,
      determined in accordance with the following table:

           Period of Service                              Vested Percentage
           -----------------                              -----------------
           Less than 2 years                                      0%
           2 years but less than 3 years                         20%
           3 years but less than 4 years                         40%
           4 years but less than 5 years                         60%
           5 years but less than 6 years                         80%
           6 years or more                                      100%

      Notwithstanding the foregoing provision, each Participant with at least a
      Period of Service of three (3) years with the Employer shall at all times
      have his vested percentage computed under the greater of the provisions of
      this Section 12.5 or the provisions of Section 4.1(c).

      For those Plan Years in which the Plan ceases to be a Top-Heavy Plan, the
      vesting schedule shall be determined in accordance with the provisions of
      Section 4.1(c), except that the vested percentage of a Participant's
      accrued benefit before the Plan ceased to be a Top-Heavy Plan shall not be
      reduced.


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                                                                  Article XIII -
                                                        Miscellaneous Provisions
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                                 ARTICLE XIII -
                            MISCELLANEOUS PROVISIONS

13.1  No Right to Continued Employment

      Neither the establishment of the Plan, nor any provisions of the Plan or
      of the Agreement establishing the Trust, or of any Separate Agreement nor
      any action of any Named Fiduciary, Plan Administrator or the Employer,
      shall be held or construed to confer upon any Employee any right to a
      continuation of his employment by the Employer. The Employer reserves the
      right to dismiss any Employee or otherwise deal with any Employee to the
      same extent and in the same manner that it would if the Plan had not been
      adopted.

13.2  Merger, Consolidation, or Transfer

      The Plan shall not be merged or consolidated with, nor transfer its assets
      or liabilities to, any other plan unless each Employee, Participant,
      Beneficiary and other person entitled to benefits under the Plan, would
      (if such other plan then terminated) receive a benefit immediately after
      the merger, consolidation or transfer which is equal to or greater than
      the benefit he would have been entitled to receive if the Plan had
      terminated immediately before the merger, consolidation or transfer.

13.3  Nonalienation of Benefits

      Except, effective August 5, 1997, to the extent of any offset of a
      Participant's benefits as a result of any judgment, order, decree or
      settlement agreement provided in Section 401(a)(13)(C) of the Code,
      benefits payable under the Plan shall not be subject in any manner to
      anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
      charge, garnishment, execution, or levy of any kind, either voluntary or
      involuntary and any attempt to so anticipate, alienate, sell, transfer,
      assign, pledge, encumber, charge, garnish, execute, levy or otherwise
      affect any right to benefits payable hereunder, shall be void.
      Notwithstanding the foregoing, the Plan shall permit the payment of
      benefits in accordance with a qualified domestic relations order as
      defined under Section 414(p) of the Code.

13.4  Missing Payee

      Any other provision in the Plan or Agreement to the contrary
      notwithstanding, if the Trustees and, if appropriate, any Separate Agency
      are unable to make payment to any Employee, Participant, Beneficiary or
      other person to whom a payment is due ("Payee") under the Plan because the
      identity or whereabouts of such Payee cannot be ascertained after
      reasonable efforts have been made to identify or locate such person
      (including mailing a certified notice of the payment due to the last known
      address of such Payee as shown on the records of the Employer), such
      payment and all subsequent payments otherwise due to such Payee shall be
      forfeited twenty-four (24) months after the date such payment first became
      due. However, such


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                                                                  Article XIII -
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--------------------------------------------------------------------------------

      payment and any subsequent payments shall be reinstated retroactively,
      without interest, no later than sixty (60) days after the date on which
      the Payee is identified and located.

13.5  Affiliated Employers

      All employees of all Affiliated Employers shall, for purposes of the
      limitations in Article XII and for measuring Hours of Service and Periods
      of Service, be treated as employed by a single employer. No employee of an
      Affiliated Employer shall become a Participant of this Plan unless
      employed by the Employer or an Affiliated Employer which has adopted the
      Plan.

13.6  Successor Employer

      In the event of the dissolution, merger, consolidation or reorganization
      of the Employer, the successor organization may, upon satisfying the
      provisions of the Agreement and the Plan, adopt and continue this Plan.
      Upon adoption, the successor organization shall be deemed the Employer
      with all its powers, duties and responsibilities and shall assume all Plan
      liabilities.

13.7  Return of Employer Contributions

      Any other provision of the Plan, Separate Agreement or Agreement to the
      contrary notwithstanding, upon the Employer's request and with the consent
      of the Trustees and, if appropriate, any Separate Agency, a contribution
      to the Plan by the Employer which was (a) made by mistake of fact, or (b)
      conditioned upon initial qualification of the Plan with the Internal
      Revenue Service, or (c) conditioned upon the deductibility by the Employer
      of such contributions under Section 404 of the Code, shall be returned to
      the Employer within one (1) year after: (i) the payment of a contribution
      made by mistake of fact, or (ii) the denial of such qualification or (iii)
      the disallowance of the deduction (to the extent disallowed), as the case
      may be.

      Any such return shall not exceed the lesser of (A) the amount of such
      contributions (or, if applicable, the amount of such contribution with
      respect to which a deduction is denied or disallowed) or (B) the amount of
      such contributions net of a proportionate share of losses incurred by the
      Plan during the period commencing on the Valuation Date as of which such
      contributions are made and ending on the Valuation Date as of which such
      contributions are returned. All such refunds shall be limited in amount,
      circumstances and timing to the provisions of Section 403(c) of ERISA.

13.8  Adoption of Plan by Affiliated Employer

      An Affiliated Employer of the Sponsoring Employer may adopt the Plan and
      Agreement upon satisfying the requirements set forth in the Agreement.
      Upon such adoption, such Affiliated Employer shall become a Participating
      Affiliate in the Plan, which Plan shall be deemed a "single plan" within
      the meaning of Income Tax Regulations Section 1.414(1)-1(b)(1).


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                                                                  Article XIII -
                                                        Miscellaneous Provisions
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      For purposes of Article IX, Employer shall mean only the Sponsoring
      Employer and each Participating Affiliate shall be deemed to accept and
      designate the Named Fiduciaries, Committee, Plan Administrator, Trustee
      Administrator and voter of Units designated by the Sponsoring Employer to
      act on its behalf in accordance with the provisions of the Plan and
      Agreement.

      The Sponsoring Employer shall solely exercise for and on behalf of such
      Participating Affiliate the powers reserved to the Employer under Articles
      IX and XI. However, such Participating Affiliate may at anytime terminate
      its future participation in the Plan for the purposes and in the manner
      set forth in the Agreement.

13.9  Construction of Language

      Wherever 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 shall be deemed equally to refer to
      the female gender. Any reference to a section number shall refer to a
      section of this Plan, unless otherwise indicated.

13.10 Headings

      The headings of articles and sections are included solely for convenience
      of reference, and if there be any conflict between such headings and the
      text of the Plan, the text shall control.

13.11 Governing Law

      The Plan shall be governed by and construed and enforced in accordance
      with the laws of the State of New York, except to the extent that such
      laws are preempted by the Federal laws of the United States of America.


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