<PAGE>

                               KAISER FEDERAL BANK

                             EXECUTIVE NONQUALIFIED
                                 RETIREMENT PLAN










                                   Drafted By

                            Marla J. Aspinwall, Esq.
                                 Loeb & Loeb LLP
                      10100 Santa Monica Blvd., Suite 2200
                          Los Angeles, California 90067
                            Telephone: (310) 282-2377
                               Fax: (310) 282-2200
                           E-Mail: maspinwall@loeb.com



<PAGE>

                               KAISER FEDERAL BANK

                     EXECUTIVE NONQUALIFIED RETIREMENT PLAN

     Kaiser Federal Bank, a Federal savings bank (the "Company"), hereby
establishes this Executive Nonqualified Retirement Plan (the "Plan"), effective
November 1, 2001 and restated effective November 1, 2003, for the purpose of
attracting high quality executives and promoting in its key executives increased
efficiency and an interest in the successful operation of the Company. The
benefits provided under the Plan shall be provided in consideration for services
to be performed after the effective date of the Plan, but prior to the
executive's retirement.

                                    ARTICLE 1

                                   DEFINITIONS

     1.1       ACCOUNT shall mean the account or accounts established for a
particular Participant pursuant to Article 3 of the Plan.

     1.2       ADMINISTRATOR shall mean the person or persons appointed by the
Board of Directors of the Company to administer the Plan pursuant to Article 12
of the Plan.

     1.3       BASE COMPENSATION shall mean the Participant's annual base rate
of pay from the Company excluding incentive and discretionary bonuses and other
non-regular forms of compensation, before reductions for contributions to or
deferrals under any pension, deferred compensation or benefit plans sponsored by
the Company.

     1.4       BENEFICIARY shall mean the person(s) or entity designated as such
in accordance with Article 11 of the Plan.

     1.5       BONUS shall mean amounts paid to the Participant by the Company
annually in the form of discretionary or incentive compensation or any other
bonus designated by the Administrator before reductions for contributions to or
deferrals under any pension, deferred compensation or benefit plans sponsored by
the Company.

     1.6       CHANGE OF CONTROL shall mean either: (i) the dissolution or
liquidation of the Company and/or K-Fed Bancorp; (ii) a reorganization, merger
or consolidation of the Company and/or K-Fed Bancorp with one or more
corporations as a result of which the Company or K-Fed Bancorp is not the
surviving corporation; (iii) approval by the stockholders of the Company and/or
K-Fed Bancorp of any sale, lease, exchange or other transfer (in one or a series
of transactions) of all or substantially all of the assets of the Company and/or
K-Fed Bancorp; (iv) approval by the stockholders of the Company and/or K-Fed
Bancorp of any merger or consolidation of the Company and/or K-Fed Bancorp in
which the holders of voting stock of the Company and/or K-Fed Bancorp
immediately before the merger or consolidation will not own fifty percent (50%)
or more of the voting shares of the continuing or surviving corporation
immediately after such merger or consolidation; or (v) a change of fifty percent
(50%) (rounded to the next whole person) in the membership of the Board of
Directors of the Company and/or K-Fed Bancorp within a twelve (12) month period,
unless the election or nomination for election by

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

stockholders of each new director within such period was approved by the vote of
two-thirds (2/3) (rounded to the next whole person) of the directors then still
in office who were in office at the beginning of the twelve (12) month period.

     1.7       COMPANY shall mean Kaiser Federal Bank.

     1.8       COMPANY CONTRIBUTIONS shall mean contributions made by the
Company to the Plan on behalf of the Participant pursuant to Article 2 of the
Plan.

     1.9       COMPANY CONTRIBUTIONS ACCOUNT shall mean the Account established
to hold Company Contributions on behalf of the Participant pursuant to Article 3
of the Plan.

     1.10      CREDITING RATE shall mean the notional gains and losses credited
on the Participant's Account balance which are based on the Participant's choice
among the investment alternatives made available by the Administrator pursuant
to Article 3 of the Plan.

     1.11      DEFERRAL CONTRIBUTIONS shall mean elective deferrals made by the
Participant to hold the Plan pursuant to Article 2 of the Plan.

     1.12      DEFERRAL CONTRIBUTIONS ACCOUNT shall mean the Account established
on behalf of the Participant to hold the Participant's Deferral Contributions
pursuant to Article 3 of the Plan.

     1.13      DISABILITY shall mean any cessation of the Participant's
employment with the Company as a result of a physical or mental condition which
prevents the Participant from performing the normal duties of his or her current
employment. If a Participant makes application for disability benefits under the
Social Security Act or under a Company sponsored long term disability plan, as
then in effect, and qualifies for such benefits, he/she shall be presumed to
qualify as totally and permanently disabled under this Plan. The Administrator
may require that the Participant submit proof to the Company of a determination
by the Social Security Administration or insurance carrier of eligibility for
disability benefits.

     1.14      DISTRIBUTION DATE shall mean the date by which a lump sum payment
shall be made or the date by which installment payments shall commence. Unless
otherwise specified, the Distribution Date shall be on or before the last day of
month following the month in which the event triggering the payout occurs or the
last day of the first month of a Plan Year for which a distribution is elected.
In the case of death, the event triggering payout shall be deemed to occur upon
the date the Administrator is provided with the documentation reasonably
necessary to establish the fact of the Participant's death.

     1.15      ELIGIBLE EXECUTIVE shall mean a senior officer or other
management or highly compensated executive of the Company selected by the
Administrator to be eligible to participate in the Plan.

     1.16      ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.

     1.17      FINANCIAL HARDSHIP shall mean the Participant's or his
dependent's (as defined in Section 152(a) of the Internal Revenue Code) sudden
and unexpected illness or accident, the

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

Participant's sudden and unexpected property casualty loss, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, which is not covered by insurance and may
not be relieved by cessation of Plan deferrals or by the liquidation of the
Participant's assets, provided that such liquidation would not cause a severe
Financial Hardship, and which is determined to qualify as a Financial Hardship
by the Administrator. Cash needs arising from foreseeable events such as the
purchase of a residence or education expenses for children shall not, alone, be
considered a Financial Hardship.

     1.18      PARTICIPANT shall mean an Eligible Executive who has elected to
participate and has completed a Participant Election Form pursuant to Article 2
of the Plan. Participation shall commence on the first day of the first Plan
Year following completion of the Participant Election Form.

     1.19      PARTICIPANT ELECTION FORM shall mean the written agreement to
make a deferral submitted by the Participant to the Administrator on a timely
basis pursuant to Article 2 of the Plan. The Participant Election Form may take
the form of an electronic communication followed by appropriate written
confirmation according to specifications established by the Administrator.

     1.20      PLAN YEAR shall mean the calendar year.

     1.21      QUALIFIED PLAN shall mean the Kaiser Federal Retirement Savings
Plan as amended from time to time.

     1.22      RETIREMENT shall mean Termination of Employment on or after the
Retirement Eligibility Date.

     1.23      RETIREMENT ELIGIBILITY DATE shall mean the date on which the
Participant attains age sixty (60).

     1.24      SCHEDULED WITHDRAWAL shall mean the distribution elected by the
Participant pursuant to Article 7 of the Plan.

     1.25      SCHEDULED WITHDRAWAL ACCOUNT shall mean the Account established
pursuant to Article 3 to hold amounts subject to a Scheduled Withdrawal election
pursuant to Article 7 of the Plan.

     1.26      TERMINATION OF EMPLOYMENT shall mean the date of the cessation of
the Participant's employment with the Company for any reason whatsoever, whether
voluntary or involuntary, including as a result of the Participant's Retirement
or death, or to the extent provided in Article 6 of the Plan, Disability.

     1.27      UNSCHEDULED WITHDRAWAL shall mean a distribution elected by the
Participant pursuant to Article 8 of the Plan.

     1.28      VALUATION DATE shall mean the date through which earnings are
credited and shall be the last day of the month coinciding with or immediately
preceding the month in which the payout or other event triggering the Valuation
occurs.

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

     1.29      WITHDRAWAL PENALTY shall mean the ten percent (10%) penalty
deducted from an Account which is forfeited to the Company as a result of an
Unscheduled Withdrawal pursuant to Article 8 of the Plan.

     1.30      YEARS OF SERVICE shall mean "years of vesting service" as such
term is defined in the Qualified Plan.

                                    ARTICLE 2

                                  PARTICIPATION

     2.1       ELECTIVE DEFERRAL. Each year, a Participant may elect to defer a
whole percentage of Base Compensation and/or Bonus earned during the Plan Year
up to a maximum percentage established by the Administrator for such Plan Year.
The Administrator may further limit the maximum or the minimum amount of
deferrals by any Participant or group of Participants in its sole discretion.

     2.2       PARTICIPANT ELECTION FORM. In order to make a deferral, an
Eligible Executive must submit a Participant Election Form to the Administrator
during the enrollment period established by the Administrator prior to the
beginning of the period during which the Base Compensation or Bonus is earned,
except that with respect to the first Plan Year, the Participant shall submit a
Participant Election Form within thirty (30) days of adoption of the Plan by the
Board of Directors of the Company. The Administrator may establish a special
enrollment period for Eligible Executives hired or promoted to eligibility
during a Plan Year to allow deferrals of Base Compensation or Bonus earned
during the balance of such Plan Year after such enrollment period. The
Participant shall be required to submit a new Participant Election Form on a
timely basis in order to change the Participant's deferral election for a
subsequent Plan Year. If no Participant Election Form is filed during the
prescribed enrollment period, the Participant's election for the prior Plan Year
shall continue in force for the next Plan Year.

     2.3       DISCRETIONARY COMPANY MATCHING CONTRIBUTIONS. On or before the
first day of each Plan Year, the Company, in its sole discretion, may choose to
match Participant deferrals for such Plan Year under terms and conditions
specified by the Administrator. If the Company elects to match Participant
deferrals for a particular Plan Year, such matching contributions may be
credited to the Participant's Company Contribution Account at any time on or
before the last day of January following such Plan Year, in the complete and
sole discretion of the Administrator.

                                    ARTICLE 3

                                    ACCOUNTS

     3.1       PARTICIPANT ACCOUNTS. Solely for recordkeeping purposes, one or
more Accounts shall be maintained for each Participant: a Deferral Account, a
Company Contributions Account and one or more Scheduled Withdrawal Accounts. The
Participant's elective deferrals under Section 2.1 shall be credited to the
Deferral Account or a Scheduled Withdrawal Account as directed by the
Participant at the time such amounts would otherwise have been paid to the

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

Participant. The Company Contribution Account shall be credited with Company
Contributions as directed by the Administrator pursuant to Section 2.3. Accounts
shall be deemed to be credited with notional gains or losses as provided in
Section 3.2 from the date the deferral is credited to the Account through the
Valuation Date.

     3.2       CREDITING RATE. The Crediting Rate on amounts in a Participant's
Account shall be based on the Participant's choice among the investment
alternatives made available from time to time by the Administrator. The
Administrator shall establish a procedure by which a Participant may elect to
have the Crediting Rate based on one or more investment alternatives. Such
procedure shall allow Participants to change investment elections at least
quarterly and to elect to have Accounts automatically rebalanced according to
investment elections at least quarterly. The Participant's Account balance shall
reflect the investments selected by the Participant. If an investment selected
by a Participant sustains a loss, the Participant's Account shall be reduced to
reflect such loss. The Participant's choice among investments shall be solely
for purposes of calculation of the Crediting Rate. If the Participant fails to
elect an investment alternative, the Crediting Rate shall be based on the
investment alternative selected for this purpose by the Administrator. The
Company shall have no obligation to set aside or invest funds as directed by the
Participant and, if the Company elects to invest funds as directed by the
Participant, the Participant shall have no more right to such investments than
any other unsecured general creditor. During payout, the Participant's Account
shall continue to be credited at the Crediting Rate selected by the Participant
from among the investment alternatives or rates made available by the
Administrator for such purpose. Installment payments shall be recalculated
annually by dividing the account balance by the number of payments remaining
without regard to anticipated earnings or in any other reasonable manner as may
be determined from time to time by the Administrator.

     3.3       VESTING OF ACCOUNTS. The balances of the Participant's Deferral
Contributions Account and Scheduled Withdrawal Account shall be fully vested at
all times. The balance of the Participant's Company Contributions Account shall
be vested based on the Participant's Year of Service according to the following
schedule:


                       Completed Years         Percentage of
                          of Service          Crediting Rating
                    ---------------------  ----------------------

                    Less than 2                      0%

                    2 but less than 3               20%

                    3 but less than 4               40%

                    4 but less than 5               60%

                    5 but less than 6               80%

                    6 or more                      100%


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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

     Notwithstanding the foregoing, the Participant's Company Contributions
Account shall be fully vested in the event of a Termination of Employment as a
result of the Participant's Retirement, Disability or death. In the event of the
Participant's Termination of Employment prior to completion of six (6) Years of
Service, the Participant shall forfeit to the Company the unvested balance of
the Participant's Company Contributions Account.

     3.4       STATEMENT OF ACCOUNTS. The Administrator shall provide each
Participant with statements at least annually setting forth the Participant's
Account balance as of the end of each year.

                                    ARTICLE 4

                                    BENEFITS

     4.1       RETIREMENT BENEFITS. In the event of the Participant's
Retirement, the Participant shall be entitled to receive an amount equal to the
total balance of the Participant's Account credited with notional earnings as
provided in Article 3 through the Valuation Date. The benefits shall be paid in
annual payments over five (5) years unless the Participant makes a timely
election to have the benefit paid in a single lump sum or in annual installments
over a specified period of not more than ten (10) years. Payments shall begin on
the Distribution Date following Retirement. An election to change the form of
benefit payout may be made at any time prior to Retirement by submitting to the
Administrator the form provided for such purpose, but elections shall not be
effective unless made no less than thirteen (13) calendar months prior to
Retirement.

     4.2       TERMINATION BENEFIT. Upon Termination of Employment other than by
reason of Retirement, Disability, or death, the Participant shall be entitled to
receive an amount equal to the total balance of the Participant's Account
credited with notional earnings as provided in Article 3 through the Valuation
Date. The benefits shall be paid in a single lump sum unless the Participant
makes a timely election to have the benefits paid in annual installments over a
specified period of not more than five (5) years. Payments shall begin on the
Distribution Date following Termination of Employment. An election to change the
form of benefit payout may be made at any time prior to Termination of
Employment by submitting to the Administrator the form provided for such
purpose, but elections shall not be effective unless made no less than thirteen
(13) calendar months prior to termination of employment.

     4.3       SMALL BENEFIT EXCEPTION. Notwithstanding the foregoing, in the
event the sum of all benefits payable to the Participant is less than or equal
to five thousand dollars ($5,000), the Company may, in its sole discretion,
elect to pay such benefits in a single lump sum payable on the last day of the
month in which such benefits first become payable.

                                    ARTICLE 5

                                 DEATH BENEFITS

     5.1       SURVIVOR BENEFIT BEFORE BENEFITS COMMENCE. If the Participant
dies prior to commencement of benefits under Article 4, the Company shall pay to
the Participant's Beneficiary a death benefit equal to the total balance on
death of the Participant's Account

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

credited with notional earnings as provided in Article 3 through the Valuation
Date. The death benefit shall be paid in a single lump sum on the Distribution
Date following the date the Participant's death is established by reasonable
documentation.

     5.2       SURVIVOR BENEFIT AFTER BENEFITS COMMENCE. If the Participant dies
after benefits have commenced under Article 4, the Company shall pay to the
Participant's Beneficiary an amount equal to the remaining benefits payable to
the Participant under the Plan over the same period such benefits would have
been paid to the Participant.

     5.3       SMALL BENEFIT EXCEPTION. Notwithstanding the foregoing, in the
event the sum of all benefits payable to a Beneficiary is less than or equal to
five thousand dollars ($5,000), the Company may, in its sole discretion, elect
to pay such benefits in a single lump sum payable on the last day of the month
in which such benefits first become payable.

                                    ARTICLE 6

                                   DISABILITY

     6.1       DISABILITY. In the event of Disability, deferred elections shall
cease. In the event of Termination of Employment by reason of Disability, the
Participant shall be entitled to receive the benefits provided under Article 4.1
of the Plan as if the Participant had qualified for Retirement.

                                    ARTICLE 7

                              SCHEDULED WITHDRAWAL

     7.1       ELECTION. The Participant may make an irrevocable election on the
Participant Election Form at the time of making a deferral to take a Scheduled
Withdrawal from the Scheduled Withdrawal Account established for such purpose,
including any earnings credited thereon. The Participant may elect to receive
the Scheduled Withdrawal in any Plan Year on or after the third Plan Year
following the enrollment period in which such Scheduled Withdrawal is elected
and may elect to have the Scheduled Withdrawal distributed in annual
installments over a period of up to six (6) years. The Participant may
irrevocably elect to make additional deferrals into an existing Scheduled
Withdrawal Account in subsequent Plan Years but may not change the Scheduled
Withdrawal date for an Account containing previously deferred amounts. The
Participant may establish separate Scheduled Withdrawal Accounts with different
payout dates, for example, for college education expenses of separate
dependents.

     7.2       TIMING OF SCHEDULED WITHDRAWAL. The Scheduled Withdrawal shall be
paid by the Company to the Participant commencing on the Distribution Date of
the Plan Year elected and continuing over the period elected by the Participant.
Notwithstanding the foregoing, in the event of Termination of Employment prior
to the date elected for the Scheduled Withdrawal, the Scheduled Withdrawal shall
be paid in the form provided in Articles 4 or 5 of the Plan applicable to such
Termination of Employment.

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

                                    ARTICLE 8

                             UNSCHEDULED WITHDRAWAL

     8.1       ELECTION. A Participant (or, after the Participant's death, a
Beneficiary) may take an Unscheduled Withdrawal from an Account at any time. The
Unscheduled Withdrawal shall be paid no later than the last day of the month
following the month in which the Unscheduled Withdrawal is requested. After an
Unscheduled Withdrawal, a Participant's deferrals shall cease and the
Participant shall not be allowed to make a new deferral election until the
enrollment period following one full calendar year from the date of the
Unscheduled Withdrawal. Only one Unscheduled Withdrawal shall be permitted in
each Plan Year.

     8.2       WITHDRAWAL PENALTY. There shall be a Withdrawal Penalty deducted
from the Account prior to an Unscheduled Withdrawal from such Account equal to
ten percent (10%) of the Unscheduled Withdrawal.

                                    ARTICLE 9

                         FINANCIAL HARDSHIP DISTRIBUTION

     9.1       FINANCIAL HARDSHIP DISTRIBUTION. Upon a finding that the
Participant (or, after the Participant's death, a Beneficiary) has suffered a
Financial Hardship, the Administrator may in its sole discretion, accelerate
distributions of benefits or approve reduction or cessation of current deferrals
under the Plan in the amount reasonably necessary to alleviate such Financial
Hardship. After a distribution based on Financial Hardship from either this Plan
or the Qualified Plan, a Participant's deferrals under this Plan shall cease and
the Participant shall not be allowed to make a new deferral election until the
enrollment period following one full calendar year from the date of such
Financial Hardship distribution.

                                   ARTICLE 10

                        AMENDMENT AND TERMINATION OF PLAN

     10.1      AMENDMENT OR TERMINATION OF PLAN. The Company may, at any time,
direct the Administrator to amend or terminate the Plan, except that no such
amendment or termination may reduce a Participant's Account balance. If the
Company terminates the Plan, the date of such termination shall be treated as a
Termination of Employment for the purpose of calculating Plan benefits and the
Company shall pay to the Participant a termination benefit equal to the vested
balance on Termination of Employment of all of the Participant's Accounts
credited with notional earnings as provided in Article 3 through the Valuation
Date in the form of a single lump sum payable on the last day of the month
following the month in which termination of the Plan occurs.

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

                                   ARTICLE 11

                                  BENEFICIARIES

     11.1      BENEFICIARY DESIGNATION. The Participant shall have the right, at
any time, to designate any person or persons as Beneficiary (both primary and
contingent) to whom payment under the Plan shall be made in the event of the
Participant's death. The Beneficiary designation shall be effective when it is
submitted in writing to and acknowledged by the Administrator during the
Participant's lifetime on a form prescribed by the Administrator.

     11.2      REVISION OF DESIGNATION. The submission of a new Beneficiary
designation shall cancel all prior Beneficiary designations.

     11.3      SUCCESSOR BENEFICIARY. If the primary Beneficiary dies prior to
complete distribution of the benefits provided in Article 5, the remaining
Account balance shall be paid to the contingent Beneficiary elected by the
Participant in the form of a lump sum payable no later than the last day of the
month following the month in which the primary Beneficiary's death is
established.

     11.4      ABSENCE OF VALID DESIGNATION. If a Participant fails to designate
a Beneficiary as provided above, or if every person designated as Beneficiary
predeceases the Participant or dies prior to complete distribution of the
Participant's benefits, then the Administrator shall direct the distribution of
such benefits to the Participant's estate.

                                   ARTICLE 12

                        ADMINISTRATION/CLAIMS PROCEDURES

     12.1      ADMINISTRATION. The Plan shall be administered by the
Administrator, which shall have the exclusive right and full discretion (i) to
interpret the Plan, (ii) to decide any and all matters arising hereunder
(including the right to remedy possible ambiguities, inconsistencies, or
admissions), (iii) to make, amend and rescind such rules as it deems necessary
for the proper administration of the Plan and (iv) to make all other
determinations necessary or advisable for the administration of the Plan,
including determinations regarding eligibility for benefits payable under the
Plan. All interpretations of the Administrator with respect to any matter
hereunder shall be final, conclusive and binding on all persons affected
thereby. No member of the Administrator shall be liable for any determination,
decision, or action made in good faith with respect to the Plan. The Company
will indemnify and hold harmless the members of the Administrator from and
against any and all liabilities, costs, and expenses incurred by such persons as
a result of any act, or omission, in connection with the performance of such
persons' duties, responsibilities, and obligations under the Plan, other than
such liabilities, costs, and expenses as may result from the bad faith, willful
misconduct, or criminal acts of such persons.

     12.2      CLAIMS PROCEDURE. Any Participant, former Participant or
Beneficiary may file a written claim with the Administrator setting forth the
nature of the benefit claimed, the amount thereof, and the basis for claiming
entitlement to such benefit. The Administrator shall determine the validity of
the claim and communicate a decision to the claimant promptly and, in

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

any event, not later than ninety (90) days after the date of the claim. The
claim may be deemed by the claimant to have been denied for purposes of further
review described below in the event a decision is not furnished to the claimant
within such ninety (90) day period. If additional information is necessary to
make a determination on a claim, the claimant shall be advised of the need for
such additional information within forty-five (45) days after the date of the
claim. The claimant shall have up to one hundred and eighty (180) days to
supplement the claim information, and the claimant shall be advised of the
decision on the claim within forty-five (45) days after the earlier of the date
the supplemental information is supplied or the end of the one hundred and
eighty (180) day period. Every claim for benefits which is denied shall be
denied by written notice setting forth in a manner calculated to be understood
by the claimant (i) the specific reason or reasons for the denial, (ii) specific
reference to any provisions of the Plan (including any internal rules,
guidelines, protocols, criteria, etc.) on which the denial is based, (iii)
description of any additional material or information that is necessary to
process the claim, and (iv) an explanation of the procedure for further
reviewing the denial of the claim.

     12.3      REVIEW PROCEDURES. Within sixty (60) days after the receipt of a
denial on a claim, a claimant or his/her authorized representative may file a
written request for review of such denial. Such review shall be undertaken by
the Administrator and shall be a full and fair review. The claimant shall have
the right to review all pertinent documents. The Administrator shall issue a
decision not later than sixty (60) days after receipt of a request for review
from a claimant unless special circumstances, such as the need to hold a
hearing, require a longer period of time, in which case a decision shall be
rendered as soon as possible but not later than one hundred and twenty (120)
days after receipt of the claimant's request for review. The decision on review
shall be in writing and shall include specific reasons for the decision written
in a manner calculated to be understood by the claimant with specific reference
to any provisions of the Plan on which the decision is based and shall include
an explanation the claimants right to submit the claim for binding arbitration
pursuant to Section 14.13.

                                   ARTICLE 13

                         CONDITIONS RELATED TO BENEFITS

     13.1      NONASSIGNABILITY. The benefits provided under the Plan may not be
alienated, assigned, transferred, pledged or hypothecated by any person, at any
time, or to any person whatsoever. Those benefits shall be exempt from the
claims of creditors or other claimants of the Participant or Beneficiary and
from all orders, decrees, levies, garnishment or executions to the fullest
extent allowed by law.

     13.2      NO RIGHT TO COMPANY ASSETS. The benefits paid under the Plan
shall be paid from the general funds of the Company, and the Participant and any
Beneficiary shall be no more than unsecured general creditors of the Company
with no special or prior right to any assets of the Company for payment of any
obligations hereunder.

     13.3      PROTECTIVE PROVISIONS. The Participant shall cooperate with the
Company by furnishing any and all information requested by the Administrator, in
order to facilitate the payment of benefits hereunder, taking such physical
examinations as the Administrator may deem necessary and taking such other
actions as may be requested by the Administrator. If the

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KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

Participant refuses to so cooperate, the Company shall have no further
obligation to the Participant under the Plan. In the event of the Participant's
suicide during the first two (2) years in the Plan, or if the Participant makes
any material misstatement of information or non-disclosure of medical history,
then no benefits shall be payable to the Participant under the Plan, except that
benefits may be payable in a reduced amount in the sole discretion of the
Administrator.

     13.4      WITHHOLDING. The Participant shall make appropriate arrangements
with the Company for satisfaction of any federal, state or local income tax
withholding requirements and Social Security or other employee tax requirements
applicable to the payment of benefits under the Plan. If no other arrangements
are made, the Company may provide, at its discretion, for such withholding and
tax payments as may be required, including, without limitation, by the reduction
of other amounts payable to the Participant.

     13.5      ASSUMPTIONS AND METHODOLOGY. The Administrator shall establish
the actuarial assumptions and method of calculation used in determining the
present or future value of benefits, earnings, payments, fees, expenses or any
other amounts required to be calculated under the terms of the Plan. The
Administrator shall also establish reasonable procedures regarding the form and
timing of installment payments.

     13.6      TRUST. The Company shall be responsible for the payment of all
benefits under the Plan. At its discretion, the Company may establish one or
more grantor trusts for the purpose of providing for payment of benefits under
the Plan. Such trust or trusts may be irrevocable, but the assets thereof shall
be subject to the claims of the Company's creditors. Benefits paid to the
Participant from any such trust or trusts shall be considered paid by the
Company for purposes of meeting the obligations of the Company under the Plan.
Notwithstanding the foregoing, upon a Change of Control of the Company, the
Company shall make a contribution to an irrevocable "rabbi" trust to provide for
payment of benefit previously accrued under the Plan equal to the following:

               (a)  one hundred and ten percent (110%) of the present value of
all vested and unvested accrued benefits payable to Participants or
beneficiaries under the Plan on a pre-tax basis; plus

               (b)  the present value of all reasonably anticipated fees and
expenses (including reasonably anticipated legal expenses) of the Trust for the
duration of the Trust, which shall be presumed to be at least two percent (2%)
of the amount in paragraph (a) unless the Trustee determines that a greater
number is appropriate; less

               (c)  the current fair market value of all the assets held in the
Trust immediately before such contribution.

                                       11
<PAGE>

KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

                                   ARTICLE 14

                                  MISCELLANEOUS

     14.1      SUCCESSORS OF THE COMPANY. The rights and obligations of the
Company under the Plan shall inure to the benefit of, and shall be binding upon,
the successors and assigns of the Company.

     14.2      EMPLOYMENT NOT GUARANTEED. Nothing contained in the Plan nor any
action taken hereunder shall be construed as a contract of employment or as
giving any Participant any right to continued employment with the Company.

     14.3      GENDER, SINGULAR AND PLURAL. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, as the
identity of the person or persons may require. As the context may require, the
singular may be read as the plural and the plural as the singular.

     14.4      CAPTIONS. The captions of the articles, paragraphs and sections
of the Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.

     14.5      VALIDITY. In the event any provision of the Plan is held invalid,
void or unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of the Plan.

     14.6      WAIVER OF BREACH. The waiver by the Company of any breach of any
provision of the Plan shall not operate or be construed as a waiver of any
subsequent breach by that Participant or any other Participant.

     14.7      NOTICE. Any notice or filing required or permitted to be given to
the Company or the Participant under this Agreement shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail, in the case
of the Company, to the principal office of the Company, directed to the
attention of the Administrator, and in the case of the Participant, to the last
known address of the Participant indicated on the employment records of the
Company. Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification. Notices to the Company may be permitted by
electronic communication according to specifications established by the
Administrator.

     14.8      ERRORS IN BENEFIT STATEMENT OR DISTRIBUTIONS. In the event an
error is made in a benefit statement, such error shall be corrected on the next
benefit statement following the date such error is discovered. In the event of
an error in a distribution, the Participant's Account shall, immediately upon
the discovery of such error, be adjusted to reflect such under or over payment
and, if possible, the next distribution shall be adjusted upward or downward to
correct such prior error. If the remaining balance of a Participant's Account is
insufficient to cover an erroneous overpayment, the Company may, at its
discretion, offset other amounts payable to the Participant from the Company
(including but not limited to salary, bonuses, expense

                                       12
<PAGE>

KAISER FEDERAL BANK EXECUTIVE NONQUALIFIED RETIREMENT PLAN

reimbursements, severance benefits or other employee compensation benefit
arrangements, as allowed by law) to recoup the amount of such overpayment(s).

     14.9      ERISA PLAN. The Plan is intended to be an unfunded plan
maintained primarily to provide deferred compensation benefits for a select
group of "management or highly compensated employees" within the meaning of
Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3
and 4 of Title I of ERISA.

     14.10     APPLICABLE LAW. In the event any provision of, or legal issue
relating to, this Plan is not fully preempted by ERISA, such issue or provision
shall be governed by the laws of the State of California, without regard to
conflict of law provisions.

     14.11     ARBITRATION. Any claim, dispute or other matter in question of
any kind relating to this Plan which is not resolved by the claims procedures
under Article 12 shall be settled by arbitration in accordance with the
applicable Employment Dispute Resolution Rules of the American Arbitration
Association. Notice of demand for arbitration shall be made in writing to the
opposing party and to the American Arbitration Association within a reasonable
time after the claim, dispute or other matter in question has arisen. In no
event shall a demand for arbitration be made after the date when the applicable
statute of limitations would bar the institution of a legal or equitable
proceeding based on such claim, dispute or other matter in question. The
decision of the arbitrators shall be final and may be enforced in any court of
competent jurisdiction.

     IN WITNESS WHEREOF, the Company has caused this Plan to be executed this
______________ day of ___________, __________.


                                            Kaiser Federal Bank,
                                            a Federal savings bank



                                            By__________________________________

                                            Title_______________________________

                                       13