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                                                                    *  4/13/95 *

                            LITTLE FALLS SAVINGS BANK

                   DIRECTORS CONSULTATION AND RETIREMENT PLAN


         WHEREAS,  Little Falls Savings Bank  ("Savings  Bank") wishes to reward
the years of extensive  service  provided by the current members of the Board of
Directors and to continue to attract and to retain the best talent  available to
serve on its Board of Directors, and

         WHEREAS,  it is  deemed  advisable  and in the  best  interests  of the
Savings  Bank to offer  such  members  of the  Boards  of  Directors  additional
financial  incentives  in the form of deferred  compensation  to encourage  such
participation  and service to the Savings  Bank,  as  directors,  and  following
retirement as a director to encourage such  individuals to continue to serve the
Savings Bank as a consulting director for a period of time thereafter,

         NOW  THEREFORE,  BE IT  RESOLVED  that the Little  Falls  Savings  Bank
Directors Consultation and Retirement Plan ("Plan"),  attached hereto and made a
part of these minutes, be adopted and implemented effective May 9, 1995.


                                    ARTICLE I

                                   DEFINITIONS

         The following  words and phrases as used herein shall,  for the purpose
of this Plan and any subsequent  amendment thereof,  have the following meanings
unless a different meaning is plainly required by the content:

         1.1 "Savings Bank" means Little Falls Savings Bank,  Little Falls,  New
Jersey, or any successor thereto.

         1.2  "Board"  means the Board of  Directors  of the  Savings  Bank,  as
constituted from time to time and successors thereto.

         1.3  "Change  in  Control"  means the power to  control  proxies by any
person,  other than the Board of  Directors  of the Savings  Bank to direct more
than 25% of the  outstanding  votes of the  Savings  Bank,  the  control  of the
election of a majority  of the Savings  Bank's  directors  or the  exercise of a
controlling influence over the management or policies of the Savings Bank by any
person or by persons  acting as a group  within the meaning of Section  13(d) of
the Securities Exchange Act of 1934, as amended,  ("Exchange Act"). In the event
the Savings  Bank  converts in the future from  mutual-to-stock  form,  the term
"control"  shall refer to the ownership,  holding or power to vote more than 25%
of the Savings Bank's (or any parent holding company's) outstanding voting stock
by any person,  the control of the election of a majority of the Savings  Bank's
(or any parent holding company's) directors, or the exercise of


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a controlling  influence  over the management or policies of the Savings Bank by
any person or by persons  acting as a group within the meaning of Section  13(d)
of the  Exchange  Act.  The term  "person"  means an  individual  other than the
Employee,  or a corporation,  partnership,  trust,  association,  joint venture,
pool, syndicate, sole proprietorship,  unincorporated  organization or any other
form of entity not  specifically  listed  herein.  Change of Control  shall also
mean:  (i) the  execution  of an  agreement  for the sale of all,  or a material
portion,  of the assets of the Savings Bank;  (ii) the execution of an agreement
for a  merger  or  recapitalization  of  the  Savings  Bank  or  any  merger  or
recapitalization  whereby the Savings Bank is not the surviving entity;  (iii) a
change of control of the Savings Bank, as otherwise defined or determined by the
New Jersey Department of Banking, or regulations  promulgated by it; or (iv) the
acquisition,  directly or indirectly,  of the beneficial  ownership  (within the
meaning of that term as it is used in Section  13(d) of the Exchange Act and the
rules and regulations  promulgated  thereunder) of twenty-five  percent (25%) or
more of the  outstanding  voting  securities  of the Savings Bank by any person,
trust,  entity or group.  This  limitation  shall not apply to the  purchase  of
shares by  underwriters in connection with a public offering of the Savings Bank
stock (or a parent holding  company's stock), or the purchase of shares of up to
25% of any class of securities of the Savings Bank by a  tax-qualified  employee
stock benefit plan. The term "person"  refers to an individual or a corporation,
partnership,   trust,   association,   joint  venture,  pool,  syndicate,   sole
proprietorship,  unincorporated  organization  or any other  form of entity  not
specifically listed herein. The decision of the Committee as to whether a change
in control has occurred  shall be  conclusive  and binding.  A change in control
shall  not  be  deemed  to  have  occurred  as a  result  of a  holding  company
reorganization of the Savings Bank and simultaneous  acquisition of 100% of such
stock by a parent savings and loan holding company or bank holding company.

         1.4  "Committee"  means  the  Executive  Committee  of the Board of the
Savings Bank.

         1.5  "Director" means a member of the Board of the Savings Bank.

         1.6  "Disability"  (total and permanent  disability)  means a mental or
physical  disability  which  prevents the Director  from  performing  the normal
duties of his or her position with the Savings Bank.  Such  disability must have
prevented  the  Director  from  performing  his or her  duties  for at least six
months,  and a physician  satisfactory to both the Director and the Savings Bank
must  certify that the Director is disabled  from  performing  his or her normal
duties with the Savings Bank.

         1.7  "Effective Date" means May 9, 1995.

         1.8  "Participant"  means a  Director  serving  as such on or after the
Effective Date. Such  participation  shall continue as long as such  Participant
fulfills all requirements for participation subject to the right of termination,
amendment and modification of the Plan hereinafter set forth.

         1.9 "Plan" means the Little Falls Savings Bank  Directors  Consultation
and Retirement Plan herein set forth, as amended from time to time.

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         1.10  "Retirement  Date" means the date of  termination of service as a
Director  following  the  participant's  completion of not less than 20 years of
Board  service  and  attainment  of not  less  than age 60  while  serving  as a
Director.

         1.11 "Service"  means all years of service as a member of the Board and
all predecessor entities.

                                   ARTICLE II

                                    BENEFITS

         2.1  Retirement.  Upon a  Participant's  retirement  from  service as a
Director of the Savings Bank on or after the  Retirement  Date, the Savings Bank
shall pay to the  participant  a monthly  pension in an amount  approved  by the
Board and set forth herein at Article II, Section 2.4, on the first business day
of each calendar  month  commencing on or after the Retirement  Date.  Except as
provided  at Article  II,  Sections  2.2 and 2.3  herein,  upon a  Participant's
termination  from  service  as a  Director  of the  Savings  Bank  prior  to the
Retirement  Date,  the Savings Bank shall have no financial  obligations  to the
Participant under the Plan.

         2.2 Change in  Control.  All  benefits  payable,  or that would  become
payable if a Director  were to retire  prior to such  Change in  Control,  shall
remain payable  thereafter.  Upon  termination of service  following a Change in
Control,  all benefits  shall be deemed  payable in accordance  with Article II,
Section 2.4;  provided that if  Participant  has not yet attained the Retirement
Date  as of  such  date  of  termination  of  service,  such  Participant  shall
nevertheless  be deemed to have served until the Retirement  Date as of the date
of such  termination  following a Change of Control,  and in order to  calculate
benefits payable hereunder. Notwithstanding anything herein to the contrary, for
purposes of  calculation  of benefits in accordance  with this  Section,  in the
event that a Participant  shall not otherwise have commenced receipt of benefits
as of the  date  of a  Change  of  Control,  it  shall  be  presumed  that  such
Participant  shall have  completed 20 years of service and attained age 60 as of
such date of a Change of Control and benefits shall be immediately payable as of
such date of a Change of Control.

         2.3 Total and Permanent  Disability.  In the event of the Disability of
the  Participant,  the Participant  will be entitled to a monthly pension in the
amount  specified at Article II,  Section  2.4,  payable on the first day of the
month following  certification  of such Disability  without regard to the actual
age of such  Participant and presuming that the Participant  shall have attained
the age of not  less  than  60 as of the  date  of  such  Disability;  provided,
however,  that such  Participant  shall have completed not less than 20 years of
service as of the date of certification of such Disability.

         2.4 Level of Benefit  Payments.  Participants that retire as a Director
of the Savings Bank in accordance with Sections 2.1, 2.2 or 2.3 herein, shall be
eligible to receive retirement benefits as follows:


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         A  Participant  who upon  retirement  on or after the  Retirement  Date
enters into an agreement  to be a consulting  director of the Savings Bank (in a
form  similar  to that  contained  at  Schedule  A  hereto)  shall  be paid  the
retirement  benefit equal to the product of 50% times the regular  monthly Board
fees in effect  as of the date of  retirement  from the  Board as a monthly  sum
until the month following the date of death of such Participant.

                                   ARTICLE III

                                    INSURANCE

         3.1 Ownership of Insurance.  The Savings Bank, in its sole  discretion,
may  elect to  purchase  one or more  life  insurance  policies  on the lives of
Participants in order to provide funds to the Savings Bank to pay part or all of
the benefits  accrued under this Plan.  All rights and incidents of ownership in
any life insurance  policy that the Savings Bank may purchase  insuring the life
of the Participant  (including any right to proceeds payable  thereunder)  shall
belong  exclusively to the Savings Bank or its designated Trust, and neither the
Participant,  nor any  beneficiary or other person claiming under or through him
or her shall have any  rights,  title or  interest  in or to any such  insurance
policy.  The  Participant  shall  not  have  any  power  to  transfer,   assign,
hypothecate  or  otherwise  encumber  in  advance  any of the  benefits  payable
thereunder,  nor shall any benefits be subject to seizure for the benefit of any
debts or  judgments,  or be  transferable  by  operation  of law in the event of
bankruptcy,  insolvency  or  otherwise.  Any  life  insurance  policy  purchased
pursuant hereto and any proceeds payable  thereunder shall remain subject to the
claims of the Savings Bank's general creditors.

         3.2  Physical  Examination.  As a condition  of  becoming or  remaining
covered under this Plan,  each  Participant,  as may be requested by the Savings
Bank from time to time shall take a physical examination by a physician approved
by an insurance  carrier.  The cost of the examination shall not be borne by the
Participant.  The report of such examination shall be transmitted  directly from
the  physician  to the  insurance  carrier  designated  by the  Savings  Bank to
establish certain costs associated with obtaining  insurance coverages as may be
deemed  necessary under this Plan. Such  examination  shall remain  confidential
among the Participant,  the physician and the insurance carrier and shall not be
made available to the Savings Bank in any form or manner.

         3.3 Death of  Participant.  On death of the  Participant,  the proceeds
derived from such insurance policy, if any, shall be paid to the Savings Bank or
its designated Trust.

                                   ARTICLE IV

                                      TRUST

         4.1 Trust. Except as may be specifically provided, nothing contained in
this Plan and no action  taken  pursuant  to the  provisions  of this Plan shall
create  or  be  construed  to  create  a  trust  of  any  kind,  or a  fiduciary
relationship between the Savings Bank and the Participant or

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any other person.  Any funds which may be invested  under the provisions of this
Plan shall  continue for all  purposes to be a part of the general  funds of the
Savings  Bank.  No person  other  than the  Savings  Bank shall by virtue of the
provisions of this Plan have any interest in such funds.  The Savings Bank shall
not be under  any  obligation  to use such  funds  solely  to  provide  benefits
hereunder,  and no  representations  have been made to a  Participant  that such
funds can or will be used only to provide benefits hereunder. To the extent that
any person acquires a right to receive  payments from the Savings Bank under the
Plan,  such rights shall be no greater than the right of any  unsecured  general
creditor of the Savings Bank.

         In order to facilitate the  accumulation of funds necessary to meet the
costs of the Savings  Bank under this Plan  (including  the  provision  of funds
necessary to pay premiums with respect to any life insurance  policies  purchase
pursuant  to Article  III above and to pay  benefits to the extent that the cash
value and/or  proceeds of any such policies are not adequate to make payments to
a Participant  or his or her  beneficiary as and when the same are due under the
Plan), the Savings Bank may enter into a Trust  Agreement.  The Savings Bank, in
its  discretion,  may  elect to  place  any life  insurance  policies  purchased
pursuant to Article III above into the Trust.  In  addition,  such sums shall be
placed  in said  Trust  as may from  time to time be  approved  by the  Board of
Directors,  in its sole discretion.  To the extent that the assets of said Trust
and/or the proceeds of any life insurance policy  purchased  pursuant to Article
III are not  sufficient to pay benefits  accrued under this Plan,  such payments
shall be made from the general assets of the Savings Bank.

                                    ARTICLE V

                                     VESTING

         5.1 Vesting.  All benefits  under this Plan are deemed  non-vested  and
forfeitable  prior to the Retirement Date.  Notwithstanding  the foregoing,  all
benefits payable hereunder shall deemed 100%  non-forfeitable by the Participant
upon the Retirement  Date,  upon  termination  of service  following a Change in
Control of the Savings Bank, or upon the Disability of the Participant following
not less  than 20 years of prior  Board  service.  No  benefits  shall be deemed
payable hereunder for any time period prior to the time that such benefits shall
be deemed 100% non-forfeitable. Notwithstanding anything herein to the contrary,
in no event shall benefits payable hereunder be deemed vested and payable within
3 years of the  Effective  Date of the Plan  except  as  follows:  one-third  of
benefits  payable  hereunder shall be deemed vested following one year after the
Effective Date of the Plan and one-third annually thereafter,  except however in
the event that a Participant shall have attained age 60 and shall have completed
not less than 30 years of service, benefits shall be deemed 100% non-forfeitable
and payable as of the date of retirement on or after the Effective Date.


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                                   ARTICLE VI

                                   TERMINATION

         6.1  Termination.   All  rights  of  the  Participant  hereunder  shall
terminate  immediately upon the Participant  ceasing to be in the active service
of the Savings Bank prior to the time that benefits payable under the Plan shall
be deemed to be 100%  non-forfeitable.  A leave of absence approved by the Board
shall  not  constitute  a  cessation  of  service  within  the  meaning  of this
paragraph, within the sole discretion of the Committee.

                                   ARTICLE VII

                      FORFEITURE OR SUSPENSION OF BENEFITS

         7.1  Forfeiture or Suspension  of Benefits.  Notwithstanding  any other
provision of this Plan to the contrary, benefits shall be forfeited or suspended
during  any  period  of  paid  service  with  the  Savings  Bank  following  the
commencement of benefit payments, within the sole discretion of the Committee.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

         8.1 Other  Benefits.  Nothing in this Plan shall diminish or impair the
Participant's eligibility,  participation or benefit entitlement under any other
benefit,  insurance or compensation plan or agreement of the Savings Bank now or
hereinafter in effect.

         8.2 No Effect on Employment.  This Plan shall not be deemed to give any
Participant  or other  person in the employ or service of the  Savings  Bank any
right to be retained in the  employment  or service of the Savings  Bank,  or to
interfere  with the right of the Savings Bank to terminate  any  Participant  or
such  other  person  at any time and to treat him or her  without  regard to the
effect which such treatment  might have upon him or her as a Participant in this
Plan.

         8.3 Legally Binding. The rights,  privileges,  benefits and obligations
under this Plan are  intended to be legal  obligations  of the Savings  Bank and
binding upon the Savings Bank, its successors and assigns.

         8.4  Modification.  The  Savings  Bank,  by  action  of  the  Board  of
Directors,  reserves the exclusive  right to amend,  modify,  or terminate  this
Plan. Any such  termination,  modification  or amendment  shall not terminate or
diminish any rights or benefits  accrued by any Participant  prior thereto.  The
Savings Bank shall give thirty (30) days'  notice in writing to any  Participant
prior to the effective date of any such  amendment,  modification or termination
of this

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Plan.  Notwithstanding  the foregoing,  in no event shall such benefits  payable
under the Plan be reduced below those provided for in Section 2.4 herein.

         8.5 Arbitration. Any controversy or claim arising out of or relating to
any contract or the breach thereof shall be settled by arbitration in accordance
with the Commercial  Arbitration Rules of the American Arbitration  Association,
with  such  arbitration  hearing  to be  held  at the  offices  of the  American
Arbitration  Association ("AAA") nearest to the home office of the Savings Bank,
unless otherwise mutually agreed to by the Participant and the Savings Bank, and
judgment  upon the award  rendered  by the  arbitrator(s)  may be entered in any
court having jurisdiction thereof.

         8.6  Limitation.  No rights of any  Participant  are  assignable by any
Participant,  in whole or in part,  either by voluntary or involuntary act or by
operation  of  law.  Rights  of  Participants   hereunder  are  not  subject  to
anticipation,  alienation, sale, transfer,  assignment,  pledge,  hypothecation,
encumbrance or garnishment by creditors of the Participant.  Such rights are not
subject  to the  debts,  contracts,  liabilities,  engagements,  or torts of any
Participant.  No  Participant  shall have any right under this Plan or any Trust
referred  to in Article  IV or against  any  assets  held or  acquired  pursuant
thereto  other than the rights of a general,  unsecured  creditor of the Savings
Bank pursuant to the  unsecured  promise of the Savings Bank to pay the benefits
accrued  hereunder in accordance  with the terms of this Plan.  The Savings Bank
has no obligation under this Plan to fund or otherwise secure its obligations to
render payments  hereunder to Participants.  No Participant shall have any voice
in the use, disposition, or investment of any asset acquired or set aside by the
Savings Bank to provide benefits under this Plan.

         8.7 ERISA and IRC  Disclaimer.  It is intended that the Plan be neither
an "employee  welfare  benefit plan" nor an "employee  pension benefit plan" for
purposes of the Employee  Retirement  Income  Security  Act of 1974,  as amended
("ERISA").  Further, it is intended that the Plan will not cause the interest of
a  Participant  under  the Plan to be  includable  in the  gross  income of such
Participant prior to the actual receipt of a payment under the Plan for purposes
of the Internal Revenue Code of 1986, as amended ("IRC").  No  representation is
made to any Participant to the effect that any insurance  policies  purchased by
the Savings Bank or assets of any Trust  established  pursuant to this Plan will
be used  solely  to  provide  benefits  under  this  Plan  or in any  way  shall
constitute  security for the payment of such  benefits.  Benefits  payable under
this Plan are not in any way limited to or governed by the  proceeds of any such
insurance  policies or the assets of any such Trust.  No Participant in the Plan
has any preferred  claim against the proceeds of any such insurance  policies or
the assets of any such Trust.

         8.8 Conduct of Participants.  Notwithstanding anything contained herein
to the contrary,  no payment of any then unpaid  benefits  shall be made and all
rights under the Plan payable to a Participant,  or any other person, to receive
payments  thereof  shall be  forfeited  if the  Participant  shall engage in any
activity  or  conduct  which in the  opinion  the Board of the  Savings  Bank is
inimical to the best interests of the Savings Bank.


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         8.9  Incompetency.  If the  Savings  Bank shall find that any person to
whom any payment is payable  under the Plan is deemed  unable to care for his or
her personal  affairs because of illness or accident,  any payment due (unless a
prior  claim  therefor  shall  have  been  made  by a duly  appointed  guardian,
committee or other legal  representative)  may be paid to the spouse, a child, a
parent,  or a brother or sister,  or to any person deemed by the Savings Bank to
have incurred  expense for such person  otherwise  entitled to payment,  in such
manner and  proportions as the Board may determine in its sole  discretion.  Any
such payments shall  constitute a complete  discharge of the  liabilities of the
Savings Bank under the Plan.

         8.10 Construction. The Savings Bank shall have full power and authority
to  interpret,  construe  and  administer  this  Plan  and  the  Savings  Bank's
interpretations  and  construction  thereof,  and actions  thereunder,  shall be
binding and conclusive on all persons for all purposes. Directors of the Savings
Bank  shall not be liable to any  person  for any  action  taken or  omitted  in
connection  with the  interpretation  and  administration  of this  Plan  unless
attributable to his own willful, gross misconduct or lack of good faith.

         8.11 Plan  Administration.  The Board of  Directors of the Savings Bank
shall  administer  the Plan;  provided,  however,  that the Board may appoint an
administrative  committee  ("Committee") to provide  administrative  services or
perform  duties  required  by this  Plan.  The  Committee  shall  have  only the
authority granted to it by the Board.

         8.12 Governing Law. This Plan shall be construed in accordance with and
governed  by the laws of the  State of New  Jersey,  except to the  extent  that
Federal law shall be deemed to apply.  No  payments  of  benefits  shall be made
hereunder if the Board of the Savings Bank, or counsel retained  thereby,  shall
determine that such payments shall be in violation of applicable regulations, or
likely result in imposition of regulatory  action,  by the New Jersey Department
of Banking,  Federal Deposit Insurance  Corporation or other appropriate banking
regulatory agencies.

         8.13  Successors  and  Assigns.  The  Plan  shall be  binding  upon any
successor or successors of the Savings Bank,  and unless  clearly  inapplicable,
reference herein to the Savings Bank shall be deemed to include any successor or
successors of the Savings Bank.

         8.14 Sole Agreement.  The Plan expresses,  embodies, and supersedes all
previous agreements,  understandings,  and commitments, whether written or oral,
between the Savings Bank and any Participants hereto with respect to the subject
matter hereof.

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                                   SCHEDULE A

                            Little Falls Savings Bank

                            Little Falls, New Jersey

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

                   DIRECTORS CONSULTATION AND RETIREMENT PLAN

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



         WHEREAS,  the Board of Directors of Little Falls Savings  Bank,  Little
Falls,  New  Jersey  ("Savings  Bank")  has  previously  adopted  the  Directors
Consultation and Retirement Plan ("Plan"); and

         WHEREAS,  upon  retirement  as a  Director,  I am  eligible to elect to
participant in such Plan;

         My signature  below hereby  evidences my request to the Savings Bank of
my election to participate in the Plan, as follows:

         1.       This election to participate in the Plan is being delivered to
                  the Savings Bank effective ________________;

         2.       I  hereby  resign  as a  director  of the  Savings  Bank as of
                  _____________; ("Retirement Date").

         3.       Upon  retirement  from the Board as of the Retirement  Date, I
                  shall be  appointed  as a  Consulting  Director to the Savings
                  Bank and shall  advise the  Savings  Bank from time to time on
                  business and community relations matters as may be requested;

         4.       As a Consulting  Director, I will not have any specific duties
                  or responsibilities,  except as may be specifically  requested
                  from time to time by the Board;

         5.       Compensation as a Consulting Director shall be as specified at
                  Section II of the Plan as a consulting retainer and retirement
                  benefit.

         6.       I understand that the above listed items  constitutes the only
                  benefits that shall be delivered to me as a participant in the
                  Plan.