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                                                                    Exhibit 10.4
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                    HORIZON FEDERAL SAVINGS BANK 401(K) PLAN




















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                                        Horizon Federal Savings Bank 401(k) Plan

                             ADOPTION AGREEMENT #001
                     STANDARDIZED 401(k) PROFIT SHARING PLAN

      The undersigned, Horizon Federal Savings Bank ("Employer"), by executing
this Adoption Agreement, elects to establish a retirement plan and trust
("Plan") under the Qualified Plan Consultants, LLC Defined Contribution
Prototype Plan Document (basic plan document # 01). The Employer, subject to
the Employer's Adoption Agreement elections, adopts fully the Prototype Plan and
Trust provisions. This Adoption Agreement, the basic plan document and any
attached appendices or addenda, constitute the Employer's entire plan and trust
document. All section references within this Adoption Agreement are Adoption
Agreement section references unless the Adoption Agreement or the context
indicate otherwise. All article references are basic plan document and Adoption
Agreement references as applicable. Numbers in parenthesis which follow headings
are references to basic plan document sections. The Employer makes the following
elections granted under the corresponding provisions of the basic plan document.

                                    ARTICLE I
                                   DEFINITIONS

1. PLAN (1.21). The name of the Plan as adopted by the Employer is Horizon
Federal Savings Bank 401(k) Plan.

2. TRUSTEE (1.33). The Trustee executing this Adoption Agreement is: (Choose one
of (a), (b) or (c))

|X|   (a) A discretionary Trustee. See Plan Section 10.03[A].

|_|   (b) A nondiscretionary Trustee. See Plan Section 10.03[B].

|_|   (c) A Trustee under a separate trust agreement. See Plan Section 10.03[G].

3. EMPLOYEE (1.11). The following Employees are not eligible to participate in
the Plan: (Choose (a) or one or both of (b) or (c) as applicable)

|X|   (a) No exclusions.

|_|   (b) Collective bargaining Employees.

|_|   (c) Nonresident aliens.

4. COMPENSATION (1.07). The Employer makes the following election(s) regarding
the definition of Compensation for purposes of the contribution allocation
formula under Article III: (Choose one of (a), (b) or (c))

|X|   (a) W-2 wages increased by Elective Contributions.

|_|   (b) Code ss.3401(a) federal income tax withholding wages increased by
      Elective Contributions.

|_|   (c) 415 compensation.

[Note: Each of the Compensation definitions in (a), (b) and (c) includes
Elective Contributions. See Plan Section 1.07(D). To exclude Elective
Contributions, the Employer must elect (g).]

            Compensation taken into account. For the Plan Year in which an
Employee first becomes a Participant, the Plan Administrator will determine the
allocation of Employer contributions (excluding deferral contributions) by
taking into account: (Choose one of (d) or (e))

|X|   (d) Plan Year. The Employee's Compensation for the entire Plan Year.

|_|   (e) Compensation while a Participant. The Employee's Compensation only for
      the portion of the Plan Year in which the Employee actually is a
      Participant.

Modifications to Compensation definition. The Employer elects to modify the
Compensation definition elected in (a), (b) or (c) as follows. (Choose one or
more of (f), (g) or (h) as applicable)

|_|   (f) Fringe benefits. The Plan excludes all reimbursements or other expense
      allowances, fringe benefits (cash and noncash), moving expenses, deferred
      compensation and welfare benefits.

|_|   (g) Elective Contributions. The Plan excludes a Participant's Elective
      Contributions. See Plan Section 1.07(D).

|_|   (h) Exclusion. The Plan excludes Compensation of each Highly Compensated
      Employee in excess of: _____________.

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                                        Horizon Federal Savings Bank 401(k) Plan

5. PLAN YEAR/LIMITATION YEAR (1.24). Plan Year and Limitation Year mean the
12-consecutive month period (except for a short Plan Year) ending every: (Choose
(a) or (b). Choose (c) if applicable)

|X|   (a) December 31.

|_|   (b) Other: _____________.

|_|   (c) Short Plan Year: commencing on: _________ and ending on: __________.

6. EFFECTIVE DATE (1.10). The Employer's adoption of the Plan is a: (Choose one
of (a) or (b))

|X|   (a) New Plan. The Effective Date of the Plan is: April 1, 2004.

|_|   (b) Restated Plan. The restated Effective Date is:___________.

         This Plan is an amendment and restatement of an existing retirement
         plan(s) originally established effective as of:___________.

7. HOUR OF SERVICE/ELAPSED TIME METHOD (1.15). The crediting method for Hours of
Service is: (Choose one or more of (a) through (d) as applicable)

|X|   (a) Actual Method. See Plan Section 1.15(B).

|_|   (b) Equivalency Method. The Equivalency Method is:_______________. [Note:
      Insert "daily," "weekly," "semi-monthly payroll periods" or "monthly."]
      See Plan Section 1.15(C).

|_|   (c) Combination Method. In lieu of the Equivalency Method specified in
      (b), the Actual Method applies for purposes of:_____________.

|_|   (d) Elapsed Time Method. In lieu of crediting Hours of Service, the
      Elapsed Time Method applies for purposes of crediting Service for: (Choose
      one or more of (1), (2) or (3) as applicable)

      |_|   (1) Eligibility under Article II.

      |_|   (2) Vesting under Article V.

      |_|   (3) Contribution allocations under Article III.

8. PREDECESSOR EMPLOYER SERVICE (1.30). In addition to the predecessor service
the Plan must credit by reason of Section 1.30 of the Plan, the Plan credits as
Service under this Plan, service with the following predecessor employer(s):
N/A.

[Note: If the Plan does not credit any additional predecessor service under this
Section 1.30, insert "N/A" in the blank line. The Employer also may elect to
credit predecessor service with specified Participating Employers only. See the
Participation Agreement.] Service with the designated predecessor employer(s)
applies: (Choose one or more of (a) through (d) as applicable)

|_|   (a) Eligibility. For eligibility under Article II. See Plan Section 1.30
      for time of Plan entry.

|_|   (b) Vesting. For vesting under Article V.

|_|   (c) Contribution allocation. For contribution allocations under Article
      III.

|_|   (d) Exceptions. Except for the following Service:__________.

                                   ARTICLE II
                            ELIGIBILITY REQUIREMENTS

9.    ELIGIBILITY (2.01).

Eligibility conditions. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (Choose one or more of (a) through
(e) as applicable) [Note: If the Employer does not elect (c), the Employer's
elections under (a) and (b) apply to all types of contributions. The Employer as
to deferral contributions may not elect (b)(2) and may not elect more than 12
months in (b)(4) and (b)(5).]

|X|   (a) Age. Attainment of age 18 (not to exceed age 21).

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|X|   (b) Service. Service requirement. (Choose one of (1) through (5))

      |X|   (1) One Year of Service.

      |_|   (2) Two Years of Service, without an intervening Break in Service.
            See Plan Section 2.03(A).

      |_|   (3) One Hour of Service (immediate completion of Service
            requirement). The Employee satisfies the Service requirement on
            his/her Employment Commencement Date.

      |_|   (4) __________ months (not exceeding 24).

      |_|   (5) An Employee must complete ______ Hours of Service within the
            ______ time period following an Employee's Employment Commencement
            Date. If an Employee does not complete the stated Hours of Service
            during the specified time period (if any), the Employee is subject
            to the One Year of Service requirement. [Note: The number of hours
            may not exceed 1,000 and the time period may not exceed 24 months.
            If the Plan does not require the Employee to satisfy the Hours of
            Service requirement within a specified time period, insert "N/A" in
            the second blank line.]

|_|   (c) Alternative 401(k)/401(m) eligibility conditions. In lieu of the
      elections in (a) and (b), the Employer elects the following eligibility
      conditions for the following types of contributions: (Choose (1) or (2) or
      both if the Employer wishes to impose less restrictive eligibility
      conditions for deferral/Employee contributions or for matching
      contributions)

            (1)   |_| Deferral/Employee contributions: (Choose one of a. through
                      d. Choose e. if applicable)

            a.    |_| One Year of Service

            b.    |_| One Hour of Service (immediate completion of Service
                      requirement)

            c.    |_| _____ months (not exceeding 12)

            d.    |_| An Employee must complete _____ Hours of Service within
                      the _________ time period following an Employee's
                      Employment Commencement Date. If an Employee does not
                      complete the stated Hours of Service during the specified
                      time period (if any), the Employee is subject to the One
                      Year of Service requirement. [Note: The number of hours
                      may not exceed 1,000 and the time period may not exceed 12
                      months. If the Plan does not require the Employee to
                      satisfy the Hours of Service requirement within a
                      specified time period, insert "N/A" in the second blank
                      line.]

            e.    |_| Age ______ (not to exceed age 21)

            (2)   |_| Matching contributions: (Choose one of f. through i.
                      Choose j. if applicable)

            f.    |_| One Year of Service

            g.    |_| One Hour of Service (immediate completion of Service
                      requirement)

            h.    |_| ______ months (not exceeding 24)

            i.    |_| An Employee must complete ________ Hours of Service within
                      the ________ time period following an Employee's
                      Employment Commencement Date. If an Employee does not
                      complete the stated Hours of Service during the specified
                      time period (if any), the Employee is subject to the One
                      Year of Service requirement. [Note: The number of hours
                      may not exceed 1,000 and the time period may not exceed 24
                      months. If the Plan does not require the Employee to
                      satisfy the Hours of Service requirement within a
                      specified time period, insert "N/A" in the second blank
                      line.]

            j.    |_| Age _____ (not to exceed age 21)

      |_|   (d) Service requirements: _________.

            [Note: Any Service requirement the Employer elects in (d) must be
            available under other Adoption Agreement elections or a combination
            thereof.]

      |X|   (e) Dual eligibility. The eligibility conditions of this Section
            2.01 apply solely to an Employee employed by the Employer after
            April 1, 2004. If the Employee was employed by the Employer by the
            specified date, the Employee will become a Participant on the latest
            of: (i) the Effective Date; (ii) the restated Effective Date; (iii)
            the Employee's Employment Commencement Date; or (iv) on the date the
            Employee attains age 18 (not exceeding age 21).

Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose one of
(f) through (j). Choose (k) if applicable) [Note: If the Employer does not elect
(k), the elections under (f) through (j) apply to all types of contributions.
The Employer must elect at least one Entry Date per Plan Year.]

|_|   (f) Semi-annual Entry Dates. The first day of the Plan Year and the first
      day of the seventh month of the Plan Year.

|_|   (g) The first day of the Plan Year.

|_|   (h) Employment Commencement Date (immediate eligibility).

|X|   (i) The first day of each: Plan Year quarter (e.g., "Plan Year quarter").


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|_|   (j) The following Plan Entry Dates: __________.

|_|   (k) Alternative 401(k)/401(m) Plan Entry Date(s). For the alternative
      401(k)/401(m) eligibility conditions under (c), Plan Entry Date means:
      (Choose (1) or (2) or both as applicable)

      (1) |_|                              (2) |_| Matching contributions
      Deferral/Employee contributions              (Choose one of e. through h.)
      (Choose one of a. through d.)

      a. |_| Semi-annual Entry Dates        e. |_| Semi-annual Entry Dates
      b. |_| The first day of the           f. |_| The first day of the
             Plan Year                             Plan Year
      c. |_| Employment Commencement Date   g. |_| Employment Commencement Date
             (immediate eligibility)               (immediate eligibility)
      d. |_| The first day of each:         h. |_| The first day of each:

Time of participation. An Employee will become a Participant, unless excluded
under Section 1.11, on the Plan Entry Date (if employed on that date): (Choose
one of (l), (m) or (n). Choose (o) if applicable): [Note: If the Employer does
not elect (o), the election under (l), (m) or (n) applies to all types of
contributions.]

|X|   (l) Immediately following or coincident with

|_|   (m) Immediately preceding or coincident with

|_|   (n) Nearest

|_|   (o) Alternative 401(k)/401(m) election(s): (Choose (1) or (2) or both as
      applicable)

      (1) |_| Deferral contributions       (2) |_| Matching contributions
                                                   (Choose one of b., c. or d.)

          a. |_| Immediately following         b. |_| Immediately following
                 or coincident with                  or coincident with
                                               c. |_| Immediately preceding
                                                      or coincident with
                                               d. |_| Nearest

the date the Employee completes the eligibility conditions described in this
Section 2.01. [Note: Unless otherwise excluded under Section 1.11, an Employee
must become a Participant by the earlier of: (1) the first day of the Plan Year
beginning after the date the Employee completes the age and service requirements
of Code ss.410(a); or (2) 6 months after the date the Employee completes those
requirements.]

10. YEAR OF SERVICE - ELIGIBILITY (2.02). (Choose (a) and (b) as applicable):
[Note: If the Employer does not elect a Year of Service condition or elects the
Elapsed Time Method, the Employer should not complete (a) or (b).]

|X|   (a) Year of Service. An Employee must complete 1,000 Hour(s) of Service
      during an eligibility computation period to receive credit for a Year of
      Service under Article II: [Note: The number may not exceed 1,000. If left
      blank, the requirement is 1,000.]

|X|   (b) Eligibility computation period. After the initial eligibility
      computation period described in Plan Section 2.02, the Plan measures the
      eligibility computation period as: (Choose one of (1) or (2))

      |X|   (1) The Plan Year beginning with the Plan Year which includes the
            first anniversary of the Employee's Employment Commencement Date.

      |_|   (2) The 12-consecutive month period beginning with each anniversary
            of an Employee's Employment Commencement Date.

11. PARTICIPATION - BREAK IN SERVICE (2.03). The one year hold-out rule
described in Plan Section 2.03(B): (Choose one of (a), (b) or (c))

|X|   (a) Not applicable. Does not apply to the Plan.

|_|   (b) Applicable. Applies to the Plan and to all Participants.

|_|   (c) Limited application. Applies to the Plan, but only to a Participant
      who has incurred a Separation from Service.

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                                   ARTICLE III
         EMPLOYER CONTRIBUTIONS, DEFERRAL CONTRIBUTIONS AND FORFEITURES

12.   AMOUNT AND TYPE (3.01). The amount and type(s) of the Employer's
      contribution to the Trust for a Plan Year or other specified period will
      equal: (Choose one or more of (a) through (f) as applicable)

|X|   (a) Deferral contributions (401(k) arrangement). The dollar or percentage
      amount by which each Participant has elected to reduce his/her
      Compensation, as provided in the Participant's salary reduction agreement
      and in accordance with Section 3.02.

|X|   (b) Matching contributions (other than safe harbor matching contributions
      under Section 3.01(d)). The matching contributions made in accordance with
      Section 3.03.

|X|   (c) Nonelective contributions (profit sharing). The following nonelective
      contribution: (Choose (1) or (2) or both as applicable) [Note: The
      Employer may designate as a qualified nonelective contribution, all or any
      portion of its nonelective contribution. See Plan Section 3.04(F).]

      |X|   (1) Discretionary. An amount the Employer in its sole discretion may
            determine.

      |_|   (2) Fixed. The following amount: _______

|_|   (d) 401(k) safe harbor contributions. The following 401(k) safe harbor
      contributions described in Plan Section 14.02 (D): (Choose one of (1), (2)
      or (3). Choose (4) if applicable)

      |_|   (1) Safe harbor nonelective contribution. The safe harbor
            nonelective contribution equals ____% of a Participant's
            Compensation [Note: the amount in the blank must be at least 3%.]

      |_|   (2) Basic safe harbor matching contribution. A matching contribution
            equal to 100% of each Participant's deferral contributions not
            exceeding 3% of the Participant's Compensation, plus 50% of each
            Participant's deferral contributions in excess of 3% but not in
            excess of 5% of the Participant's Compensation. For this purpose,
            "Compensation" means Compensation for:______. [Note: The Employer
            must complete the blank line with the applicable time period for
            computing the Employer's basic safe harbor match, such as "each
            payroll period," "each month," "each Plan Year quarter" or "the Plan
            Year".]

      |_|   (3) Enhanced safe harbor matching contribution. (Choose one of a. or
            b.).

      |_|   a. Uniform percentage. An amount equal to ______% of each
            Participant's deferral contributions not exceeding ______% of the
            Participant's Compensation. For this purpose, "Compensation" means
            Compensation for: ________. [See the Note in (d)(2).]

      |_|   b. Tiered formula. An amount equal to the specified matching
            percentage for the corresponding level of each Participant's
            deferral contribution percentage. For this purpose, "Compensation"
            means Compensation for: ________. [See the Note in (d)(2).]

              Deferral Contribution Percentage        Matching Percentage
              --------------------------------        -------------------

                       ________                            ________
                       ________                            ________
                       ________                            ________

[Note: The matching percentage may not increase as the deferral contribution
percentage increases and the enhanced matching formula otherwise must satisfy
the requirements of Code ss.ss.401(k)(12)(B)(ii) and (iii). If the Employer
wishes to avoid ACP testing on its enhanced safe harbor matching contribution,
the Employer also must limit deferral contributions taken into account (the
"Deferral Contribution Percentage") for the matching contribution to 6% of Plan
Year Compensation.]

      |_|   (4) Another plan. The Employer will satisfy the 401(k) safe harbor
            contribution in the following plan paired with this Plan: . [Note:
            If the Employer elects to make its safe harbor contribution to
            another plan, the plan must be a paired plan.]

|_|   (e) SIMPLE 401(k) Plan. The SIMPLE 401(k) Plan contributions described in
      Plan Section 14.02(E). The Employer operationally will elect for each Plan
      Year to make a SIMPLE matching contribution or a SIMPLE nonelective
      contribution as described in Plan Section 14.02(E)(3). The Employer must
      notify Participants of the Employer's SIMPLE contribution election and of
      the Participants' deferral election rights and limitations, within a
      reasonable period of time before the 60th day prior to the beginning of
      the Plan Year. [Note: If the Employer elects (e), it may not elect
      Sections 3.01(a) through (d) or (f).]

|_|   (f) Frozen Plan. This Plan is a frozen Plan effective: _______. For any
      period following the specified date, the Employer will not contribute to
      the Plan, a Participant may not contribute and an otherwise eligible
      Employee will not become a Participant in the Plan.

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13.   DEFERRAL CONTRIBUTIONS (3.02). The following limitations and terms apply
      to an Employee's deferral contributions. (If the Employer elects Section
      3.01(a), the Employer must elect (a). Choose (b) if applicable)13 p.66

      |X|   (a) Limitation on amount. An Employee's deferral contributions are
            subject to the following limitation(s) in addition to those imposed
            by the Code: (Choose (1), (2) or (3) as applicable)

            |_|   (1) Maximum deferral amount: _______.

            |_|   (2) Minimum deferral amount: _______.

            |X|   (3) No limitations.

      For the Plan Year in which an Employee first becomes a Participant, the
      Plan Administrator will apply any percentage limitation the Employer
      elects in (1) or (2) to the Employee's Compensation: (Choose one of (4) or
      (5) unless the Employer elects (3))

            |_|   (4) Only for the portion of the Plan Year in which the
                  Employee actually is a Participant.

            |_|   (5) For the entire Plan Year.

      |_|   (b) Negative deferral election. The Employer will withhold _____%
            from the Participant's Compensation unless the Participant elects a
            lesser percentage (including zero) under his/her salary reduction
            agreement. See Plan Section 14.02(C). The negative election will
            apply to: (Choose one of (1) or (2))

            |_|   (1) All participants who have not deferred at least the
                  automatic deferral amount as of: ________.

            |_|   (2) Each Employee whose Plan Entry Date is on or following the
                  negative election effective date.

      Modification/revocation of salary reduction agreement. A Participant
      prospectively may modify or revoke a salary reduction agreement, or may
      file a new salary reduction agreement following a prior revocation, at
      least once per Plan Year or during any election period specified by the
      basic plan document or required by the Internal Revenue Service. The Plan
      Administrator also may provide for more frequent elections in the Plan's
      salary reduction agreement form.

14.   MATCHING CONTRIBUTIONS (INCLUDING ADDITIONAL SAFE HARBOR MATCH UNDER PLAN
      SECTION 14.02(D)(3)) (3.03). The Employer matching contribution is (If the
      Employer elects Section 3.01(b), the Employer must elect one or more of
      (a), (b) or (c) as applicable):

      |_|   (a) Fixed formula. An amount equal to _______% of each Participant's
            deferral contributions.

      |X|   (b) Discretionary formula. An amount (or additional amount) equal to
            a matching percentage the Employer from time to time may deem
            advisable of the Participant's deferral contributions. The Employer,
            in its sole discretion, may designate as a qualified matching
            contribution, all or any portion of its discretionary matching
            contribution. The portion of the Employer's discretionary matching
            contribution for a Plan Year not designated as a qualified matching
            contribution is a regular matching contribution.

      |_|   (c) Multiple level formula. An amount equal to the following
            percentages for each level of the Participant's deferral
            contributions. [Note: The matching percentage only will apply to
            deferral contributions in excess of the previous level and not in
            excess of the stated deferral contribution percentage. The matching
            percentage may not increase as the deferral contributions percentage
            increases.]

              Deferral Contributions                Matching Percentage
              ----------------------                -------------------

                     ________                            ________
                     ________                            ________
                     ________                            ________

      Time period for matching contributions. The Employer will determine its
      matching contribution based on deferral contributions made during each:
      (Choose one of (d) through (g))

      |_|   (d) Plan Year.

      |_|   (e) Plan Year quarter.

      |_|   (f) Payroll period.

      |X|   (g) Alternative time period: monthly. [Note: Any alternative time
            period the Employer elects in (g) must be the same for all
            Participants and may not exceed the Plan Year.]

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      Deferral contributions taken into account. In determining a Participant's
      deferral contributions taken into account for the above-specified time
      period under the matching contribution formula, the following limitations
      apply: (Choose one of (h), (i) or (j))

      |_|   (h) All deferral contributions. The Plan Administrator will take
            into account all deferral contributions.

      |_|   (i) Specific limitation. The Plan Administrator will disregard
            deferral contributions exceeding % of the Participant's
            Compensation. [Note: To avoid the ACP test in a safe harbor 401(k)
            plan, the Employer must limit deferrals and Employee contributions
            which are subject to match to 6% of Plan Year Compensation.]

      |X|   (j) Discretionary. The Plan Administrator will take into account the
            deferral contributions as a percentage of the Participant's
            Compensation as the Employer determines.

      Other matching contribution requirements. The matching contribution
      formula is subject to the following additional requirements: (Choose (k)
      or (l) or both as applicable)

      |_|   (k) Matching contribution limits. A Participant's matching
            contributions may not exceed: (Choose one of (1) or (2))

            |_|   (1) __________. [Note: The Employer may elect (1) to place an
                  overall dollar or percentage limit on matching contributions.]

            |_|   (2) 4% of a Participant's Compensation for the Plan Year under
                  the discretionary matching contribution formula. [Note: The
                  Employer must elect (2) if it elects a discretionary matching
                  formula with the safe harbor 401(k) contribution formula and
                  wishes to avoid the ACP test.]

      |_|   (l) Qualified matching contributions. The Plan Administrator will
            allocate as qualified matching contributions, the matching
            contributions specified in Adoption Agreement Section: ______. The
            Plan Administrator will allocate all other matching contributions as
            regular matching contributions. [Note: If the Employer elects two
            matching formulas, the Employer may use (l) to designate one of the
            formulas as a qualified matching contribution.]

      15. CONTRIBUTION ALLOCATION (3.04).
          -------------------------------

      Employer nonelective contributions (3.04(A)). The Plan Administrator will
      allocate the Employer's nonelective contribution under the following
      contribution allocation formula: (Choose one of (a), (b) or (c). Choose
      (d) if applicable)

      |X|   (a) Nonintegrated (pro rata) allocation formula.

      |_|   (b) Permitted disparity. The following permitted disparity formula
            and definitions apply to the Plan: (Choose one of (1) or (2). Also
            choose (3))

            |_|   (1) Two-tiered allocation formula.

            |_|   (2) Four-tiered allocation formula.

            |_|   (3) For purposes of Section 3.04(b), "Excess Compensation"
                  means Compensation in excess of: (Choose one of a. or b.)

                  |_|   a. ______% of the taxable wage base in effect on the
                        first day of the Plan Year, rounded to the next highest
                        $ _____(not exceeding the taxable wage base).

                  |_|   b. The following integration level: _____.
                        [Note: The integration level cannot exceed the taxable
                        wage base in effect for the Plan Year for which this
                        Adoption Agreement first is effective.]

      |_|   (c) Uniform points allocation formula. Under the uniform points
            allocation formula, a Participant receives: (Choose (1) or both (1)
            and (2) as applicable)

            |_|   (1) _______ point(s) for each Year of Service. Year of Service
                  means: ______.

            |_|   (2) One point for each $______ [not to exceed $200] increment
                  of Plan Year Compensation.

      |_|   (d) Incorporation of contribution formula. The Plan Administrator
            will allocate the Employer's nonelective contribution under
            Section(s) 3.01(c)(2), (d)(1) or (e) in accordance with the
            contribution formula adopted by the Employer under that Section.

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      Qualified nonelective contributions. (3.04(F)). The Plan Administrator
      will allocate the Employer's qualified nonelective contributions to:
      (Choose one of (e) or (f))

            |X|   (e) Nonhighly compensated Employees only.

            |_|   (f) All Participants.

      16. FORFEITURE ALLOCATION (3.05). The Plan Administrator will allocate a
      Participant forfeiture: (Choose one or more of (a), (b) or (c) as
      applicable) [Note: Even if the Employer elects immediate vesting, the
      Employer should complete Section 3.05. See Plan Section 9.11.]

      |_|   (a) Matching contribution forfeitures. To the extent attributable to
            matching contributions: (Choose one of (1) through (4))

            |_|   (1) As a discretionary matching contribution.

            |_|   (2) To reduce matching contributions.

            |_|   (3) As a discretionary nonelective contribution.

            |_|   (4) To reduce nonelective contributions.

      |_|   (b) Nonelective contribution forfeitures. To the extent attributable
            to Employer nonelective contributions: (Choose one of (1) through
            (4))

            |_|   (1) As a discretionary nonelective contribution.

            |_|   (2) To reduce nonelective contributions.

            |_|   (3) As a discretionary matching contribution.

            |_|   (4) To reduce matching contributions.

      |X|   (c) Reduce administrative expenses. First to reduce the Plan's
            ordinary and necessary administrative expenses for the Plan Year and
            then allocate any remaining forfeitures in the manner described in
            Sections 3.05(a) or (b) as applicable.

      Timing of forfeiture allocation. The Plan Administrator will allocate
      forfeitures under Section 3.05 in the Plan Year: (Choose one of (d) or
      (e))

      |X|   (d) In which the forfeiture occurs.

      |_|   (e) Immediately following the Plan Year in which the forfeiture
            occurs.

17. ALLOCATION CONDITIONS (3.06).
    ----------------------------

      Allocation conditions. The Plan does not apply any allocation conditions
      to deferral contributions, 401(k) safe harbor contributions (under Section
      3.01(d)) or to SIMPLE 401(k) contributions (under Section 3.01(e)). To
      receive an allocation of matching contributions, nonelective
      contributions, qualified nonelective contributions or Participant
      forfeitures, a Participant must satisfy the following allocation
      condition(s): (Choose one or more of (a) through (d) as applicable)

      |X|   (a) No allocation conditions.

      |_|   (b) Termination of Service/501 Hours of Service coverage rule. The
            Participant either must be employed by the Employer on the last day
            of the Plan Year or must complete at least 501 Hours of Service
            during the Plan Year. If the Plan uses the Elapsed Time Method of
            crediting Service, the Participant must complete at least 91
            consecutive calendar days of employment with the Employer during the
            Plan Year.

      |_|   (c) Death, Disability or Normal Retirement Age. Any condition
            specified in Section 3.06(b) applies if the Participant incurs a
            Separation from Service during the Plan Year on account of:
            ______(e.g., death, Disability or Normal Retirement Age).

      |_|   (d) Limited allocation conditions. The Plan does not impose an
            allocation condition for the following types of contributions:
            _______.

            [Note: Any election to limit the Plan's allocation contributions to
            certain contributions must be the same for all Participants, be
            definitely determinable and not discriminate in favor of Highly
            Compensated Employees.]

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                                        Horizon Federal Savings Bank 401(k) Plan

                                   ARTICLE IV
                            PARTICIPANT CONTRIBUTIONS

      18. EMPLOYEE (AFTER TAX) CONTRIBUTIONS (4.02). The following elections
      apply to Employee contributions: (Choose one of (a) or (b). Choose (c) if
      applicable)

      |X|   (a) Not permitted. The Plan does not permit Employee contributions.

      |_|   (b) Permitted. The Plan permits Employee contributions subject to
            the following limitations:______. [Note: Any designated
            limitation(s) must be the same for all Participants, be definitely
            determinable and not discriminate in favor of Highly Compensated
            Employees.]

      |_|   (c) Matching contribution. For each Plan Year, the Employer's
            matching contribution made with respect to Employee contributions
            is:________.

                                    ARTICLE V
                              VESTING REQUIREMENTS

      19.   NORMAL/EARLY RETIREMENT AGE (5.01). A Participant attains Normal
            Retirement Age (or Early Retirement Age, if applicable) under the
            Plan on the following date: (Choose one of (a) or (b). Choose (c) if
            applicable)

      |X|   (a) Specific age. The date the Participant attains age 65 . [Note:
            The age may not exceed age 65.]

      |_|   (b) Age/participation. The later of the date the Participant attains
            years of age or the anniversary of the first day of the Plan Year in
            which the Participant commenced participation in the Plan. [Note:
            The age may not exceed age 65 and the anniversary may not exceed the
            5th.]

      |_|   (c) Early Retirement Age. Early Retirement Age is the later of: (i)
            the date a Participant attains age ____ or (ii) the date a
            Participant reaches his/her ____ anniversary of the first day of the
            Plan Year in which the Participant commenced participation in the
            Plan.

      20. PARTICIPANT'S DEATH OR DISABILITY (5.02). The 100% vesting rule under
      Section 5.02 of the Plan does not apply to: (Choose (a) or (b) or both as
      applicable)

      |_|   (a) Death.

      |_|   (b) Disability.

      21. VESTING SCHEDULE (5.03). A Participant has a 100% Vested interest at
      all times in his/her deferral contributions, qualified nonelective
      contributions, qualified matching contributions, 401(k) safe harbor
      contributions and SIMPLE 401(k) contributions. The following vesting
      schedule applies to Employer regular matching contributions and to
      Employer nonelective contributions: (Choose (a) or choose one or more of
      (b) through (f) as applicable)

      |_|   (a) Immediate vesting. 100% Vested at all times. [Note: The Employer
            must elect (a) if the Service condition under Section 2.01 exceeds
            One Year of Service or more than twelve months.]

      |X|   (b) Top-heavy vesting schedules. (The Employer must choose one of
            (b)(1), (2) or (3) if it does not elect (a).)

            |_|   (1) 6-year graded as specified in the Plan.

            |_|   (2) 3-year cliff as specified in the Plan.

            |X|   (3) Modified top-heavy schedule

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                                        Horizon Federal Savings Bank 401(k) Plan

                                  Years of                     Vested
                                   Service                   Percentage
                                   -------                   ----------

                       Less than 1 ...................            0%
                                                                  -

                          1 ..........................           20%
                                                                 --

                          2 ..........................           40%
                                                                 --

                          3 ..........................           60%
                                                                 --

                          4 ..........................           80%
                                                                 --

                          5 ..........................          100%
                                                                ---

      |X|   (c) Non-top-heavy vesting schedules. [Note: The Employer may elect
            one of (c)(1), (2) or (3) in addition to (b).]

            |_|   (1) 7-year graded as specified in the Plan.

            |_|   (2) 5-year cliff as specified in the Plan.

            |X|   (3) Modified non-top-heavy schedule


                                  Years of                     Vested
                                  Service                    Percentage
                                  -------                    ----------

                       Less than 1 ...................             0%
                                                                   -

                          1 ..........................            20%
                                                                  --

                          2 ..........................            40%
                                                                  --

                          3 ..........................            60%
                                                                  --

                          4 ..........................            80%
                                                                  --

                          5 ..........................           100%
                                                                 ---

                          7 or more ..................           100%
                                                                 ---

      If the Employer does not elect (c), the vesting schedule elected in (b)
      applies to all Plan Years. [Note: The modified top-heavy schedule of
      (b)(3) must satisfy Code ss.416. If the Employer elects (c)(3), the
      modified non-top-heavy schedule must satisfy Code ss.411(a)(2).]

      |_|   (d) Separate vesting election for regular matching contributions. In
            lieu of the election under (a), (b) or (c), the following vesting
            schedule applies to a Participant's regular matching contributions:
            (Choose one of (1) or (2))

            |_|   (1) 100% Vested at all times.

            |_|   (2) Regular matching vesting schedule: ______.

            [Note: The vesting schedule completed under (d)(2) must comply with
            Code ss.411(a)(4).]

      |_|   (e) Application of top-heavy schedule. The non-top-heavy schedule
            elected under (c) applies in all Plan Years in which the Plan is not
            a top-heavy plan. [Note: If the Employer does not elect (e), the
            top-heavy vesting schedule will apply for the first Plan Year in
            which the Plan is top-heavy and then in all subsequent Plan Years.]

      |_|   (f) Special vesting provisions:______. [Note: Any special vesting
            provision must satisfy Code ss.411(a). Any special vesting provision
            must be definitely determinable, not discriminate in favor of Highly
            Compensated Employees and not violate Code ss.401(a)(4).]

      22. YEAR OF SERVICE - VESTING (5.06). (Choose (a) and (b)): [Note: If the
      Employer elects the Elapsed Time Method or elects immediate vesting, the
      Employer should not complete (a) or (b).]

      |X|   (a) Year of Service. An Employee must complete at least 1,000 Hours
            of Service during a vesting computation period to receive credit for
            a Year of Service under Article V. [Note: The number may not exceed
            1,000. If left blank, the requirement is 1,000.]

      |X|   (b) Vesting computation period. The Plan measures a Year of Service
            on the basis of the following 12-consecutive month period: (Choose
            one of (1) or (2))

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                                        Horizon Federal Savings Bank 401(k) Plan

            |_|   (1) Plan Year.

            |X|   (2) Employment year (anniversary of Employment Commencement
                  Date).

      23. EXCLUDED YEARS OF SERVICE - VESTING (5.08). The Plan excludes the
      following Years of Service for purposes of vesting: (Choose (a) or choose
      one or more of (b) through (f) as applicable)

      |X|   (a) None. None other than as specified in Plan Section 5.08(a).

      |_|   (b) Age 18. Any Year of Service before the Year of Service during
            which the Participant attained the age of 18.

      |_|   (c) Prior to Plan establishment. Any Year of Service during the
            period the Employer did not maintain this Plan or a predecessor
            plan.

      |_|   (d) Parity Break in Service. Any Year of Service excluded under the
            rule of parity. See Plan Section 5.10.

      |_|   (e) Prior Plan terms. Any Year of Service disregarded under the
            terms of the Plan as in effect prior to this restated Plan.

      |_|   (f) Additional exclusions. Any Year of Service before:_____.

            [Note: Any exclusion specified under (f) must comply with Code
            ss.411(a)(4). Any exclusion must be definitely determinable, not
            discriminate in favor of Highly Compensated Employees and not
            violate Code ss.401(a)(4). If the Employer elects immediate vesting,
            the Employer should not complete Section 5.08.]

                                   ARTICLE VI
                         DISTRIBUTION OF ACCOUNT BALANCE

      24. TIME OF PAYMENT OF ACCOUNT BALANCE (6.01). The following time of
      distribution elections apply to the Plan:

      Separation from Service/Vested Account Balance not exceeding $5,000.
      Subject to the limitations of Plan Section 6.01(A)(1), the Trustee will
      distribute in a lump sum (regardless of the Employer's election under
      Section 6.04) a separated Participant's Vested Account Balance not
      exceeding $5,000: (Choose one of (a) through (d))

      |X|   (a) Immediate. As soon as administratively practicable following the
            Participant's Separation from Service.

      |_|   (b) Designated Plan Year. As soon as administratively practicable in
            the _______ Plan Year beginning after the Participant's Separation
            from Service.

      |_|   (c) Designated Plan Year quarter. As soon as administratively
            practicable in the _______ Plan Year quarter beginning after the
            Participant's Separation from Service.

      |_|   (d) Designated distribution. As soon as administratively practicable
            in the: ______ following the Participant's Separation from Service.
            [Note: The designated distribution time must be the same for all
            Participants, be definitely determinable, not discriminate in favor
            of Highly Compensated Employees and not violate Code ss.401(a)(4).]

      Separation from Service/Vested Account Balance exceeding $5,000. A
      separated Participant whose Vested Account Balance exceeds $5,000 may
      elect to commence distribution of his/her Vested Account Balance no
      earlier than: (Choose one of (e) through (i). Choose (j) if applicable)

      |X|   (e) Immediate. As soon as administratively practicable following the
            Participant's Separation from Service.

      |_|   (f) Designated Plan Year. As soon as administratively practicable in
            the ______ Plan Year beginning after the Participant's Separation
            from Service.

      |_|   (g) Designated Plan Year quarter. As soon as administratively
            practicable in the ______ Plan Year quarter following the Plan Year
            quarter in which the Participant elects to receive a distribution.

      |_|   (h) Normal Retirement Age. As soon as administratively practicable
            after the close of the Plan Year in which the Participant attains
            Normal Retirement Age and within the time required under Plan
            Section 6.01(A)(2).

      |_|   (i) Designated distribution. As soon as administratively practicable
            in the: ______ following the Participant's Separation from Service.
            [Note: The designated distribution time must be the same for all
            Participants, be definitely determinable, not discriminate in favor
            of Highly Compensated Employees and not violate Code ss.401(a)(4).]

      |_|   (j) Limitation on Participant's right to delay distribution. A
            Participant may not elect to delay commencement of distribution of
            his/her Vested Account Balance beyond the later of attainment of age
            62 or Normal Retirement Age.

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                                        Horizon Federal Savings Bank 401(k) Plan

            [Note: If the Employer does not elect (j), the Plan permits a
            Participant who has Separated from Service to delay distribution
            until his/her required beginning date. See Plan Section 6.01(A)(2).]

      Participant elections prior to Separation from Service. A Participant,
      prior to Separation from Service may elect any of the following
      distribution options in accordance with Plan Section 6.01(C): (Choose (k)
      or one or more of (l) through (o) as applicable) [Note: If the Employer
      elects any in-service distribution option, a Participant may elect to
      receive one in-service distribution per Plan Year unless the Plan's
      in-service distribution form provides for more frequent in-service
      distributions.]

      |_|   (k) None. A Participant does not have any distribution option prior
            to Separation from Service, except as may be provided under Plan
            Section 6.01(C).

      |X|   (l) Deferral contributions. Distribution of all or any portion (as
            permitted by the Plan) of a Participant's Account Balance
            attributable to deferral contributions if: (Choose one or more of
            (1), (2) or (3) as applicable)

            |X|   (1) Hardship (safe harbor hardship). The Participant has
                  incurred a hardship in accordance with Plan Sections 6.09 and
                  14.11(A).

            |_|   (2) Age. The Participant has attained age _____ (Must be at
                  least age 59 1/2).

            |_|   (3) Disability. The Participant has incurred a Disability.

      |_|   (m) Qualified nonelective contributions/qualified matching
            contributions/safe harbor contributions. Distribution of all or any
            portion of a Participant's Account Balance attributable to qualified
            nonelective contributions, to qualified matching contributions, or
            to 401(k) safe harbor contributions if: (Choose (1) or (2) or both
            as applicable)

            |_|   (1) Age. The Participant has attained age _____ (Must be at
                  least age 59 1/2).

            |_|   (2) Disability. The Participant has incurred a Disability.

      |_|   (n) Nonelective contributions/regular matching contributions/SIMPLE
            401(k) contributions. Distribution of all or any portion of a
            Participant's Vested Account Balance attributable to nonelective
            contributions, regular matching contributions or SIMPLE 401(k)
            contributions if: (Choose one or more of (1) through (5) as
            applicable)

            |_|   (1) Age/Service conditions. (Choose one or more of a. through
                  d. as applicable)

            |_|   a. Age. The Participant has attained age ______.

            |_|   b. Two-year allocations. The Plan Administrator has allocated
                  the contributions to be distributed for a period of not less
                  than ________ Plan Years before the distribution date. [Note:
                  The minimum number of years is 2.]

            |_|   c. Five years of participation. The Participant has
                  participated in the Plan for at least ________ Plan Years.
                  [Note: The minimum number of years is 5.]

            |_|   d. Vested. The Participant is ________% Vested in his/her
                  Account Balance. See Plan Section 5.03(A).

            [Note: If an Employer makes more than one election under Section
            6.01(n)(1), a Participant must satisfy all conditions before the
            Participant is eligible for the distribution.]

            |_|   (2) Hardship. The Participant has incurred a hardship in
                  accordance with Plan Section 6.09.

            |_|   (3) Hardship (safe harbor hardship). The Participant has
                  incurred a hardship in accordance with Plan Sections 6.09 and
                  14.11(A).

            |_|   (4) Disability. The Participant has incurred a Disability.

            |_|   (5) Designated condition. The Participant has satisfied the
                  following condition(s):____. [Note: Any designated
                  condition(s) must be the same for all Participants, be
                  definitely determinable and not discriminate in favor of
                  Highly Compensated Employees.]

      |X|   (o) Participant contributions. Distribution of all or any portion of
            a Participant's Account Balance attributable to the following
            Participant contributions described in Plan Section 4.01: (Choose
            one of (1), (2) or (3))

            |_|   (1) All Participant contributions.

            |_|   (2) Employee contributions only.

            |X|   (3) Rollover contributions only.

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                                        Horizon Federal Savings Bank 401(k) Plan

Participant loan default/offset. See Section 6.08 of the Plan.

      25. DISTRIBUTION METHOD (6.03). A separated Participant whose Vested
      Account Balance exceeds $5,000 may elect distribution under one of the
      following method(s) of distribution described in Plan Section 6.03:
      (Choose one or more of (a) through (d) as applicable)

      |X|   (a) Lump sum.

      |_|   (b) Installments.

      |_|   (c) Installments for required minimum distributions only.

      |_|   (d) Annuity distribution option(s):_______.

            [Note: Any optional method of distribution may not be subject to
            Employer, Plan Administrator or Trustee discretion.]

      26. JOINT AND SURVIVOR ANNUITY REQUIREMENTS (6.04). The joint and survivor
      annuity distribution requirements of Plan Section 6.04: (Choose one of (a)
      or (b))

      |X|   (a) Profit sharing plan exception. Do not apply to a Participant,
            unless the Participant is a Participant described in Section 6.04(H)
            of the Plan.

      |_|   (b) Applicable. Apply to all Participants.

                                   ARTICLE IX
       PLAN ADMINISTRATOR - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS

      27. ALLOCATION OF NET INCOME, GAIN OR LOSS (9.08). For each type of
      contribution provided under the Plan, the Plan allocates net income, gain
      or loss using the following method: (Choose one or more of (a) through (e)
      as applicable)

      |X|   (a) Deferral contributions/Employee contributions. (Choose one or
            more of (1) through (5) as applicable)

            |X|   (1) Daily valuation method. Allocate on each business day of
                  the Plan Year during which Plan assets for which there is an
                  established market are valued and the Trustee is conducting
                  business.

            |_|   (2) Balance forward method. Allocate using the balance forward
                  method.

            |_|   (3) Weighted average method. Allocate using the weighted
                  average method, based on the following weighting
                  period:________. See Plan Section 14.12.

            |_|   (4) Balance forward method with adjustment. Allocate pursuant
                  to the balance forward method, except treat as part of the
                  relevant Account at the beginning of the valuation period
                  _______% of the contributions made during the following
                  valuation period: ______.

            |_|   (5) Individual account method. Allocate using the individual
                  account method. See Plan Section 9.08.

      |X|   (b) Matching contributions. (Choose one or more of (1) through (5)
            as applicable)

            |X|   (1) Daily valuation method. Allocate on each business day of
                  the Plan Year during which Plan assets for which there is an
                  established market are valued and the Trustee is conducting
                  business.

            |_|   (2) Balance forward method. Allocate using the balance forward
                  method.

            |_|   (3) Weighted average method. Allocate using the weighted
                  average method, based on the following weighting period:_____.
                  See Plan Section 14.12.

            |_|   (4) Balance forward method with adjustment. Allocate pursuant
                  to the balance forward method, except treat as part of the
                  relevant Account at the beginning of the valuation period
                  ______% of the contributions made during the following
                  valuation period:________.

            |_|   (5) Individual account method. Allocate using the individual
                  account method. See Plan Section 9.08.

      |X|   (c) Employer nonelective contributions. (Choose one or more of (1)
            through (5) as applicable)

            |X|   (1) Daily valuation method. Allocate on each business day of
                  the Plan Year during which Plan assets for which there is an
                  established market are valued and the Trustee is conducting
                  business.

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                                        Horizon Federal Savings Bank 401(k) Plan

            |_|   (2) Balance forward method. Allocate using the balance forward
                  method.

            |_|   (3) Weighted average method. Allocate using the weighted
                  average method, based on the following weighting period:
                  ______. See Plan Section 14.12.

            |_|   (4) Balance forward method with adjustment. Allocate pursuant
                  to the balance forward method, except treat as part of the
                  relevant Account at the beginning of the valuation period
                  ______% of the contributions made during the following
                  valuation period:______.

            |_|   (5) Individual account method. Allocate using the individual
                  account method. See Plan Section 9.08.

      |_|   (d) Specified method. Allocate pursuant to the following
            method:______.

            [Note: The specified method must be a definite predetermined formula
            which is not based on Compensation, which satisfies the
            nondiscrimination requirements of Treas. Reg. ss.1.401(a)(4) and
            which is applied uniformly to all Participants.]

      |_|   (e) Interest rate factor. In accordance with Plan Section 9.08(E),
            the Plan includes interest at the following rate on distributions
            made more than 90 days after the most recent valuation date:______.

                                    ARTICLE X
                    TRUSTEE AND CUSTODIAN, POWERS AND DUTIES

      28. INVESTMENT POWERS (10.03). The following additional investment options
      or limitations apply under Plan Section 10.03: N/A. [Note: Enter "N/A" if
      not applicable.]

      29. VALUATION OF TRUST (10.15). In addition to the last day of the Plan
      Year, the Trustee must value the Trust Fund on the following valuation
      date(s): (Choose one of (a) through (d))

      |X|   (a) Daily valuation dates. Each business day of the Plan Year on
            which Plan assets for which there is an established market are
            valued and the Trustee is conducting business.

      |_|   (b) Last day of a specified period. The last day of each _______ of
            the Plan Year.

      |_|   (c) Specified dates: _______.

      |_|   (d) No additional valuation dates.

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                                        Horizon Federal Savings Bank 401(k) Plan

                                 Execution Page

      The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Prototype Plan and Trust. The Employer hereby agrees to the provisions of this
Plan and Trust, and in witness of its agreement, the Employer by its duly
authorized officers, has executed this Adoption Agreement, and the Trustee (and
Custodian, if applicable) has signified its acceptance, on: ____________________
______________________________________.


                               Name of Employer:   Horizon Federal Savings Bank
                                                 -------------------------------
                               Employer's EIN:   42-0451797
                                               ---------------------------------
                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]

                               Name(s) of Trustee:

                                          Robert D. DeCook, President
                                          --------------------------------------

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

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

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

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

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

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


                               Trust EIN (Optional):

                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]
                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]
                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]

                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]
                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]
                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]
                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]
                               Signed:
                                       -----------------------------------------

                                          --------------------------------------
                                                                    [Name/Title]

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                                        Horizon Federal Savings Bank 401(k) Plan

                               Name of Custodian (Optional):

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

                               Signed:
                                       -----------------------------------------


                                          --------------------------------------
                                                                    [Name/Title]

30. Plan Number. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500 Series) is: 002.

Use of Adoption Agreement. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
Employer only may use this Adoption Agreement in conjunction with the basic plan
document referenced by its document number on Adoption Agreement page one.

Execution for Page Substitution Amendment Only. If this paragraph is completed,
this Execution Page documents an amendment to Adoption Agreement Section(s)
________ effective ______________________________, by substitute Adoption
Agreement page number(s) _______.

Prototype Plan Sponsor. The Prototype Plan Sponsor identified on the first page
of the basic plan document will notify all adopting employers of any amendment
of this Prototype Plan or of any abandonment or discontinuance by the Prototype
Plan Sponsor of its maintenance of this Prototype Plan. For inquiries regarding
the adoption of the Prototype Plan, the Prototype Plan Sponsor's intended
meaning of any Plan provisions or the effect of the opinion letter issued to the
Prototype Plan Sponsor, please contact the Prototype Plan Sponsor at the
following address and telephone number: 3900 Westown Parkway, Ste. D, West Des
Moines, IA 50266, (515) 222-0980.

Reliance on Sponsor Opinion Letter. The Prototype Plan Sponsor has obtained from
the IRS an opinion letter specifying the form of this Adoption Agreement and the
basic plan document satisfy, as of the date of the opinion letter, Code ss.401.
An adopting Employer may rely on the Prototype Plan Sponsor's IRS opinion
letter, except to the extent provided in Rev. Proc. 2000-20, 2000-6 I.R.B. 553
and Announcement 2001-77, 2001-30 I.R.B. An Employer who has ever maintained or
who later adopts any plan (including a welfare benefit fund, as defined in Code
ss.419(e), which provides post-retirement medical benefits allocated to separate
accounts for key employees, as defined in Code ss.419A(d)(3), or an individual
medical account, as defined in Code ss.415(l)(2)) in addition to this Plan may
not rely on the opinion letter with respect to the requirements of Code
ss.ss.415 and 416. If an Employer who adopts or maintains multiple plans wishes
to obtain reliance with respect to the requirements of Code ss.ss.415 and 416,
the Employer must apply for a determination letter to Employee Plans
Determinations of the Internal Revenue Service. An Employer may not rely on the
opinion letter in certain other circumstances, which are specified in the
opinion letter issued with respect to the plan or in Revenue Procedure 2000-20
and Announcement 2001-77.

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                                        Horizon Federal Savings Bank 401(k) Plan

                             PARTICIPATION AGREEMENT

         |X| Check here if not applicable and do not complete this page.

      The undersigned Employer, by executing this Participation Agreement,
elects to become a Participating Employer in the Plan identified in Section 1.21
of the accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Adoption Agreement. The Participating Employer accepts, and
agrees to be bound by, all of the elections granted under the provisions of the
Prototype Plan as made by the Signatory Employer to the Execution Page of the
Adoption Agreement, except as otherwise provided in this Participation
Agreement.

31.   EFFECTIVE DATE (1.10). The Effective Date of the Plan for the
      Participating Employer is:______________.

32.   NEW PLAN/RESTATEMENT. The Participating Employer's adoption of this Plan
      constitutes: (Choose one of (a) or (b))

|_|   (a) The adoption of a new plan by the Participating Employer.

|_|   (b) The adoption of an amendment and restatement of a plan currently
      maintained by the Participating Employer, identified as:__________________
      ___________________________________, and having an original effective date
      of:_____________________________________________________.

33.   PREDECESSOR EMPLOYER SERVICE (1.30). In addition to the predecessor
      service credited by reason of Section 1.30 of the Plan, the Plan credits
      as Service under this Plan, service with this Participating Employer.
      (Choose one or more of (a) through (d) as applicable): [Note: If the Plan
      does not credit any additional predecessor service under Section 1.30 for
      this Participating Employer, do not complete this election.]

      |_|   (a) Eligibility. For eligibility under Article II. See Plan Section
            1.30 for time of Plan entry.

      |_|   (b) Vesting. For vesting under Article V.

      |_|   (c) Contribution allocation. For contribution allocations under
            Article III.

      |_|   (d) Exceptions. Except for the following Service: _______.

Name of Plan:                            Name of Participating Employer:


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


                                         Signed:
                                                 -------------------------------
                                                                    [Name/Title]

                                         ---------------------------------------
                                                                          [Date]
                                         Participating Employer's EIN:
                                                                       ---------
Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.

Name of Signatory Employer:              Name(s) of Trustee:

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

--------------------------------         ---------------------------------------
                    [Name/Title]                                    [Name/Title]


Signed:                                  Signed:
       -------------------------                --------------------------------

--------------------------------         ---------------------------------------
                          [Date]                                          [Date]

[Note: Each Participating Employer must execute a separate Participation
Agreement. If the Plan does not have a Participating Employer, the Signatory
Employer may delete this page from the Adoption Agreement.]

(C) Copyright 2001 Qualified Plan Consultants, LLC 11/04


                                       17
<PAGE>

                                        Horizon Federal Savings Bank 401(k) Plan

                                   APPENDIX A
                    TESTING ELECTIONS/EFFECTIVE DATE ADDENDUM

34.   The following testing elections and special effective dates apply: (Choose
      one or more of (a) through (n) as applicable)

      |_|   (a) Highly Compensated Employee (1.14). For Plan Years beginning
            after , the Employer makes the following election(s) regarding the
            definition of Highly Compensated Employee:

            (1)   |_| Top paid group election.

            (2)   |_| Calendar year data election (fiscal year plan).

      |_|   (b) 401(k) current year testing. The Employer will apply the current
            year testing method in applying the ADP and ACP tests effective for
            Plan Years beginning after: _____. [Note: For Plan Years beginning
            on or after the Employer's execution of its "GUST" restatement, the
            Employer must use the same testing method within the same Plan Year
            for both the ADP and ACP tests.]

      |_|   (c) Compensation. The Compensation definition under Section 1.07
            will apply for Plan Years beginning after: ______.

      |_|   (d) 401(k) safe harbor. The 401(k) safe harbor provisions under
            Section 3.01(d) are effective: ______.

      |_|   (e) SIMPLE 401(k). The SIMPLE 401(k) provisions of Section 3.01(e)
            are effective for Plan (calendar) Years: ______.

      |_|   (f) Negative election. The negative election provision under Section
            3.02(b) is effective: ______.

      |_|   (g) Contribution/allocation formula. The specified contribution(s)
            and allocation method(s) under Sections 3.01 and 3.04 are effective:
            ______.

      |_|   (h) Allocation conditions. The allocation conditions of Section 3.06
            are effective: ______.

      |_|   (i) Benefit payment elections. The distribution elections of
            Section(s) ________ are effective: _________.

      |_|   (j) Election to continue pre-SBJPA required beginning date. A
            Participant may not elect to defer commencement of the distribution
            of his/her Vested Account Balance beyond the April 1 following the
            calendar year in which the Participant attains age 70 1/2. See Plan
            Section 6.02(A).

      |_|   (k) Elimination of age 70 1/2 in-service distributions. The Plan
            eliminates a Participant's (other than a more than 5% owner) right
            to receive in-service distributions on April 1 of the calendar year
            following the year in which the Participant attains age 70 1/2 for
            Plan Years beginning after: ______.

      |_|   (l) Allocation of earnings. The earnings allocation provisions under
            Section 9.08 are effective:_______.

      |_|   (m) Elimination of optional forms of benefit. The Employer elects
            prospectively to eliminate the following optional forms of benefit:
            (Choose one or more of (1), (2) and (3) as applicable)

            |_|   (1) QJSA and QPSA benefits as described in Plan Sections 6.04,
                  6.05 and 6.06 effective: ______.

            |_|   (2) Installment distributions as described in Section 6.03
                  effective: ______.

            |_|   (3) Other optional forms of benefit (Any election to eliminate
                  must be consistent with Treas. Reg. ss.1.411(d)-4): ______.

      |_|   (n) Special effective date(s): ______.

            For periods prior to the above-specified special effective date(s),
      the Plan terms in effect prior to its restatement under this Adoption
      Agreement will control for purposes of the designated provisions. A
      special effective date may not result in the delay of a Plan provision
      beyond the permissible effective date under any applicable law.

(C) Copyright 2001 Qualified Plan Consultants, LLC 11/04


                                       18
<PAGE>

                                        Horizon Federal Savings Bank 401(k) Plan

                                   APPENDIX B
                    GUST Remedial Amendment Period Elections

35.   The following GUST restatement elections apply: (Choose one or more of (a)
      through (j) as applicable)35 p.1919

      |_|   (a) Highly Compensated Employee elections. The Employer makes the
            following remedial amendment period elections with respect to the
            Highly Compensated Employee definition:

<TABLE>
<S>                                                            <C>
              (1) 1997: |_| Top paid group election.           |_| Calendar year election.
                        |_| Calendar year data election.
              (2) 1998: |_| Top paid group election.           |_| Calendar year data election.
              (3) 1999: |_| Top paid group election.           |_| Calendar year data election.
              (4) 2000: |_| Top paid group election.           |_| Calendar year data election.
              (5) 2001: |_| Top paid group election.           |_| Calendar year data election.
              (6) 2002: |_| Top paid group election.           |_| Calendar year data election.
</TABLE>

      |_|   (b) 401(k) testing methods. The Employer makes the following
            remedial amendment period elections with respect to the ADP test and
            the ACP test: [Note: The Employer may use a different testing method
            for the ADP and ACP tests through the end of the Plan Year in which
            the Employer executes its GUST restated Plan.]

<TABLE>
                                    ADP test                               ACP test
<S>                                                         <C>
              (1) 1997: |_| prior year  |_| current year    1997: |_|prior year  |_|current year
              (2) 1998: |_| prior year  |_| current year    1998: |_|prior year  |_|current year
              (3) 1999: |_| prior year  |_| current year    1999: |_|prior year  |_|current year
              (4) 2000: |_| prior year  |_| current year    2000: |_|prior year  |_|current year
              (5) 2001: |_| prior year  |_| current year    2001: |_|prior year  |_|current year
              (6) 2002: |_| prior year  |_| current year    2002: |_|prior year  |_|current year
</TABLE>

      |_|   (c) Delayed application of SBJPA required beginning date. The
            Employer elects to delay the effective date for the required
            beginning date provision of Plan Section 6.02 until Plan Years
            beginning after: .

      |_|   (d) Model Amendment for required minimum distributions. The Employer
            adopts the IRS Model Amendment in Plan Section 6.02(E) effective .
            [Note: The date must not be earlier than January 1, 2001.]

Defined Benefit Limitation

      |_|   (e) Code ss.415(e) repeal. The repeal of the Code ss.415(e)
            limitation is effective for Limitation Years beginning after .
            [Note: If the Employer does not make an election under (e), the
            repeal is effective for Limitation Years beginning after December
            31, 1999.]

Code ss.415(e) limitation. To the extent necessary to satisfy the limitation
under Section 3.17 for Limitation Years beginning prior to the repeal of Code
ss.415(e), the Employer will reduce: (Choose one of (f) or (g))

      |_|   (f) The Participant's projected annual benefit under the defined
            benefit plan.

      |_|   (g) The Employer's contribution or allocation on behalf of the
            Participant to the defined contribution plan and then, if necessary,
            the Participant's projected annual benefit under the defined benefit
            plan.

Coordination with top-heavy minimum allocation. The Plan Administrator will
apply the top-heavy minimum allocation provisions of Article XII with the
following modifications: (Choose (h) or choose (i) or (j) or both as applicable)

      |_|   (h) No modifications.

      |_|   (i) For Non-Key Employees participating only in this Plan, the
            top-heavy minimum allocation is the minimum allocation determined by
            substituting _____% (not less than 4%) for "3%," except: (Choose one
            of (1) or (2))

            |_|   (1) No exceptions.

            |_|   (2) Plan Years in which the top-heavy ratio exceeds 90%.

      |_|   (j) For Non-Key Employees also participating in the defined benefit
            plan, the top-heavy minimum is: (Choose one of (1) or (2))

            |_|   (1) 5% of Compensation irrespective of the contribution rate
                  of any Key Employee: (Choose one of a. or b.)

                  |_|   a. No exceptions.

                  |_|   b. Substituting "7 1/2%" for "5%" if the top-heavy ratio
                        does not exceed 90%.

            |_|   (2) 0%. [Note: The defined benefit plan must satisfy the
                  top-heavy minimum benefit requirement for these Non-Key
                  Employees.]

Actuarial assumptions for top-heavy calculation. To determine the top-heavy
ratio, the Plan Administrator will use the following interest rate and mortality
assumptions to value accrued benefits under a defined benefit plan: _____.

(C) Copyright 2001 Qualified Plan Consultants, LLC 11/04


                                       19
<PAGE>

                                        Horizon Federal Savings Bank 401(k) Plan

                        CHECKLIST OF EMPLOYER INFORMATION
                      AND EMPLOYER ADMINISTRATIVE ELECTIONS

Commencing with the 2004 Plan Year

      The Prototype Plan permits the Employer to make certain administrative
elections not reflected in the Adoption Agreement. This form lists those
administrative elections and provides a means of recording the Employer's
elections. This checklist is not part of the Plan document.

36.   Employer Information.

      Horizon Federal Savings Bank
      --------------------------------------------------------------------------
      [Employer Name]

      301 First Avenue East, P.O. Box 8
      --------------------------------------------------------------------------
      [Address]

      Oskaloosa, Iowa 52577                   (800) 659-2492
      -----------------------------------     ----------------------------------
      [City, State and Zip Code]              [Telephone Number]

37.   Form of Business.

     (a)  |X| Corporation                     (b) |_| S Corporation
     (c)  |_| Limited Liability Company       (d) |_| Sole Proprietorship
     (e)  |_| Partnership                     (f) |_| ________

38.   Section 1.07(F) - Nondiscriminatory definition of Compensation. When
      testing non-discrimination under the Plan, the Plan permits the Employer
      to make elections regarding the definition of Compensation. [Note: This
      election solely is for purposes of nondiscrimination testing. The election
      does not affect the Employer's elections under Section 1.07 which apply
      for purposes of allocating Employer contributions and Participant
      forfeitures.]

      (a)   |X| The Plan will "gross up" Compensation for Elective
            Contributions.

      (b)   |_| The Plan will exclude Elective Contributions.

39.   Section 4.04 - Rollover contributions.39 p.2020

      (a)   |X| The Plan accepts rollover contributions.

      (b)   |_| The Plan does not accept rollover contributions.

40.   Section 8.06 - Participant direction of investment/404(c). The Plan
      authorizes Participant direction of investment with Trustee consent. If
      the Trustee permits Participant direction of investment, the Employer and
      the Trustee should adopt a policy which establishes the applicable
      conditions and limitations, including whether they intend the Plan to
      comply with ERISA ss.404(c).

      (a)   |X| The Plan permits Participant direction of investment and is a
            404(c) plan.

      (b)   |_| The Plan does not permit Participant direction of investment or
            is a non-404(c) plan.

41.   Section 9.04[A] - Participant loans. The Plan authorizes the Plan
      Administrator to adopt a written loan policy to permit Participant
      loans.

      (a)   |_| The Plan permits Participant loans subject to the following
            conditions:

            (1)   |_| Minimum loan amount: $ ____.

            (2)   |_| Maximum number of outstanding loans: _____.

            (3)   |_| Reasons for which a Participant may request a loan:

                  a. |_| Any purpose.

                  b. |_| Hardship events.

                  c. |_| Other: _________.

            (4)   |_| Suspension of loan repayments:

                  a. |_| Not permitted.

                  b. |_| Permitted for non-military leave of absence.

                  c. |_| Permitted for military service leave of absence.

            (5)   |_| The Participant must be a party in interest.

      (b)   |X| The Plan does not permit Participant loans.

42.   Section 11.01 - Life insurance. The Plan with Employer approval authorizes
      the Trustee to acquire life insurance.

      (a)   |_| The Plan will invest in life insurance contracts.

      (b)   |X| The Plan will not invest in life insurance contracts.

43.   Surety bond company: _______. Surety bond amount: $_____

(C) Copyright 2001 Qualified Plan Consultants, LLC 11/04


                                       20
<PAGE>

                                     EGTRRA
                                AMENDMENT TO THE

                    HORIZON FEDERAL SAVINGS BANK 401(K) PLAN

<PAGE>

                                                                EGTRRA - Sponsor

                                    ARTICLE I
                                    PREAMBLE

1.1   Adoption and effective date of amendment. This amendment of the plan is
      adopted to reflect certain provisions of the Economic Growth and Tax
      Relief Reconciliation Act of 2001 ("EGTRRA"). This amendment is intended
      as good faith compliance with the requirements of EGTRRA and is to be
      construed in accordance with EGTRRA and guidance issued thereunder. Except
      as otherwise provided, this amendment shall be effective as of the first
      day of the first plan year beginning after December 31, 2001.

1.2   Adoption by prototype sponsor. Except as otherwise provided herein,
      pursuant to Section 5.01 of Revenue Procedure 2000-20 (or pursuant to the
      corresponding provision in Revenue Procedure 89-9 or Revenue Procedure
      89-13), the sponsor hereby adopts this amendment on behalf of all adopting
      employers.

1.3   Supersession of inconsistent provisions. This amendment shall supersede
      the provisions of the plan to the extent those provisions are inconsistent
      with the provisions of this amendment.

                                   ARTICLE II
                          ADOPTION AGREEMENT ELECTIONS

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

      The questions in this Article II only need to be completed in order to
      override the default provisions set forth below. If all of the default
      provisions will apply, then these questions should be skipped.

      Unless the employer elects otherwise in this Article II, the following
      defaults apply:

      1)    The vesting schedule for matching contributions will be a 6 year
            graded schedule (if the plan currently has a graded schedule that
            does not satisfy EGTRRA) or a 3 year cliff schedule (if the plan
            currently has a cliff schedule that does not satisfy EGTRRA), and
            such schedule will apply to all matching contributions (even those
            made prior to 2002).

      2)    Rollovers are automatically excluded in determining whether the
            $5,000 threshold has been exceeded for automatic cash-outs (if the
            plan is not subject to the qualified joint and survivor annuity
            rules and provides for automatic cash-outs). This is applied to all
            participants regardless of when the distributable event occurred.

      3)    The suspension period after a hardship distribution is made will be
            6 months and this will only apply to hardship distributions made
            after 2001.

      4)    Catch-up contributions will be allowed.

      5)    For target benefit plans, the increased compensation limit of
            $200,000 will be applied retroactively (i.e., to years prior to
            2002).

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

2.1   Vesting Schedule for Matching Contributions

      If there are matching contributions subject to a vesting schedule that
      does not satisfy EGTRRA, then unless otherwise elected below, for
      participants who complete an hour of service in a plan year beginning
      after December 31, 2001, the following vesting schedule will apply to all
      matching contributions subject to a vesting schedule:

      If the plan has a graded vesting schedule (i.e., the vesting schedule
      includes a vested percentage that is more than 0% and less than 100%) the
      following will apply:

                Years of vesting service           Nonforfeitable percentage

                         2                                   20%
                         3                                   40%
                         4                                   60%
                         5                                   80%
                         6                                  100%

      If the plan does not have a graded vesting schedule, then matching
      contributions will be nonforfeitable upon the completion of 3 years of
      vesting service.

      In lieu of the above vesting schedule, the employer elects the following
      schedule:

      a. |_| 3 year cliff (a participant's accrued benefit derived from employer
             matching contributions shall be nonforfeitable upon the
             participant's completion of three years of vesting service).

      b. |_| 6 year graded schedule (20% after 2 years of vesting service and an
             additional 20% for each year thereafter).

      c. |_| Other (must be at least as liberal as a. or the b. above):

(C) Copyright 2001 Qualified Plan Consultants, LLC 11/04


                                       1
<PAGE>

                                                                EGTRRA - Sponsor

                  Years of vesting service           Nonforfeitable percentage

                          --------                           ---------%
                          --------                           ---------%
                          --------                           ---------%
                          --------                           ---------%
                          --------                           ---------%

      The vesting schedule set forth herein shall only apply to participants who
      complete an hour of service in a plan year beginning after December 31,
      2001, and, unless the option below is elected, shall apply to all matching
      contributions subject to a vesting schedule.

      d. |_| The vesting schedule will only apply to matching contributions made
             in plan years beginning after December 31, 2001 (the prior schedule
             will apply to matching contributions made in prior plan years).

2.2      Exclusion of Rollovers in Application of Involuntary Cash-out
         Provisions (for profit sharing and 401(k) plans only). If the plan is
         not subject to the qualified joint and survivor annuity rules and
         includes involuntary cash-out provisions, then unless one of the
         options below is elected, effective for distributions made after
         December 31, 2001, rollover contributions will be excluded in
         determining the value of the participant's nonforfeitable account
         balance for purposes of the plan's involuntary cash-out rules.

      a. |_| Rollover contributions will not be excluded.

      b. |_| Rollover contributions will be excluded only with respect to
             distributions made after ________. (Enter a date no earlier than
             December 31, 2001.)

      c. |_| Rollover contributions will only be excluded with respect to
             participants who separated from service after . (Enter a date. The
             date may be earlier than December 31, 2001.)

2.3   Suspension period of hardship distributions. If the plan provides for
      hardship distributions upon satisfaction of the safe harbor (deemed)
      standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv), then,
      unless the option below is elected, the suspension period following a
      hardship distribution shall only apply to hardship distributions made
      after December 31, 2001.

         |_| With regard to hardship distributions made during 2001, a
             participant shall be prohibited from making elective deferrals and
             employee contributions under this and all other plans until the
             later of January 1, 2002, or 6 months after receipt of the
             distribution.

2.4   Catch-up contributions (for 401(k) profit sharing plans only): The plan
      permits catch-up contributions (Article VI) unless the option below is
      elected.

         |_| The plan does not permit catch-up contributions to be made.

2.5   For target benefit plans only: The increased compensation limit ($200,000
      limit) shall apply to years prior to 2002 unless the option below is
      elected.

         |_| The increased compensation limit will not apply to years prior to
             2002.

                                   ARTICLE III
                        VESTING OF MATCHING CONTRIBUTIONS

3.1   Applicability. This Article shall apply to participants who complete an
      Hour of Service after December 31, 2001, with respect to accrued benefits
      derived from employer matching contributions made in plan years beginning
      after December 31, 2001. Unless otherwise elected by the employer in
      Section 2.1 above, this Article shall also apply to all such participants
      with respect to accrued benefits derived from employer matching
      contributions made in plan years beginning prior to January 1, 2002.

3.2   Vesting schedule. A participant's accrued benefit derived from employer
      matching contributions shall vest as provided in Section 2.1 of this
      amendment.

                                   ARTICLE IV
                              INVOLUNTARY CASH-OUTS

4.1   Applicability and effective date. If the plan provides for involuntary
      cash-outs of amounts less than $5,000, then unless otherwise elected in
      Section 2.2 of this amendment, this Article shall apply for distributions
      made after December 31, 2001, and shall apply to all participants.
      However, regardless of the preceding, this Article shall not apply if the
      plan is subject to the qualified joint and survivor annuity requirements
      of Sections 401(a)(11) and 417 of the Code.

4.2   Rollovers disregarded in determining value of account balance for
      involuntary distributions. For purposes of the Sections of the plan that
      provide for the involuntary distribution of vested accrued benefits of
      $5,000 or less, the value of a participant's nonforfeitable account
      balance shall be determined without regard to that portion of the account
      balance that is attributable to rollover contributions (and earnings
      allocable thereto) within the meaning of Sections 402(c), 403(a)(4),
      403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of
      the participant's nonforfeitable account balance as so determined is
      $5,000 or less, then the plan shall immediately distribute the
      participant's entire nonforfeitable account balance.

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                                       2
<PAGE>

                                                                EGTRRA - Sponsor

                                    ARTICLE V
                             HARDSHIP DISTRIBUTIONS

5.1   Applicability and effective date. If the plan provides for hardship
      distributions upon satisfaction of the safe harbor (deemed) standards as
      set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv), then this Article
      shall apply for calendar years beginning after 2001.

5.2   Suspension period following hardship distribution. A participant who
      receives a distribution of elective deferrals after December 31, 2001, on
      account of hardship shall be prohibited from making elective deferrals and
      employee contributions under this and all other plans of the employer for
      6 months after receipt of the distribution. Furthermore, if elected by the
      employer in Section 2.3 of this amendment, a participant who receives a
      distribution of elective deferrals in calendar year 2001 on account of
      hardship shall be prohibited from making elective deferrals and employee
      contributions under this and all other plans until the later of January 1,
      2002, or 6 months after receipt of the distribution.

                                   ARTICLE VI
                             CATCH-UP CONTRIBUTIONS

Catch-up Contributions. Unless otherwise elected in Section 2.4 of this
amendment, all employees who are eligible to make elective deferrals under this
plan and who have attained age 50 before the close of the plan year shall be
eligible to make catch-up contributions in accordance with, and subject to the
limitations of, Section 414(v) of the Code. Such catch-up contributions shall
not be taken into account for purposes of the provisions of the plan
implementing the required limitations of Sections 402(g) and 415 of the Code.
The plan shall not be treated as failing to satisfy the provisions of the plan
implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions.

                                   ARTICLE VII
                         INCREASE IN COMPENSATION LIMIT

Increase in Compensation Limit. The annual compensation of each participant
taken into account in determining allocations for any plan year beginning after
December 31, 2001, shall not exceed $200,000, as adjusted for cost-of-living
increases in accordance with Section 401(a)(17)(B) of the Code. Annual
compensation means compensation during the plan year or such other consecutive
12-month period over which compensation is otherwise determined under the plan
(the determination period). If this is a target benefit plan, then except as
otherwise elected in Section 2.5 of this amendment, for purposes of determining
benefit accruals in a plan year beginning after December 31, 2001, compensation
for any prior determination period shall be limited to $200,000. The
cost-of-living adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or within such
calendar year.

                                  ARTICLE VIII
                                   PLAN LOANS

Plan loans for owner-employees or shareholder-employees. If the plan permits
loans to be made to participants, then effective for plan loans made after
December 31, 2001, plan provisions prohibiting loans to any owner-employee or
shareholder-employee shall cease to apply.

                                   ARTICLE IX
              LIMITATIONS ON CONTRIBUTIONS (IRC SECTION 415 LIMITS)

9.1   Effective date. This Section shall be effective for limitation years
      beginning after December 31, 2001.

9.2   Maximum annual addition. Except to the extent permitted under Article VI
      of this amendment and Section 414(v) of the Code, if applicable, the
      annual addition that may be contributed or allocated to a participant's
      account under the plan for any limitation year shall not exceed the lesser
      of:

      a.    $40,000, as adjusted for increases in the cost-of-living under
            Section 415(d) of the Code, or

      b.    100 percent of the participant's compensation, within the meaning of
            Section 415(c)(3) of the Code, for the limitation year.

      The compensation limit referred to in b. shall not apply to any
      contribution for medical benefits after separation from service (within
      the meaning of Section 401(h) or Section 419A(f)(2) of the Code) which is
      otherwise treated as an annual addition.

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                                       3
<PAGE>

                                                                EGTRRA - Sponsor

                                    ARTICLE X
                         MODIFICATION OF TOP-HEAVY RULES

10.1     Effective date. This Article shall apply for purposes of determining
         whether the plan is a top-heavy plan under Section 416(g) of the Code
         for plan years beginning after December 31, 2001, and whether the plan
         satisfies the minimum benefits requirements of Section 416(c) of the
         Code for such years. This Article amends the top-heavy provisions of
         the plan.

10.2     Determination of top-heavy status.
         ----------------------------------

10.2.1   Key employee. Key employee means any employee or former employee
         (including any deceased employee) who at any time during the plan year
         that includes the determination date was an officer of the employer
         having annual compensation greater than $130,000 (as adjusted under
         Section 416(i)(1) of the Code for plan years beginning after December
         31, 2002), a 5-percent owner of the employer, or a 1-percent owner of
         the employer having annual compensation of more than $150,000. For this
         purpose, annual compensation means compensation within the meaning of
         Section 415(c)(3) of the Code. The determination of who is a key
         employee will be made in accordance with Section 416(i)(1) of the Code
         and the applicable regulations and other guidance of general
         applicability issued thereunder.

10.2.2   Determination of present values and amounts. This Section 10.2.2 shall
         apply for purposes of determining the present values of accrued
         benefits and the amounts of account balances of employees as of the
         determination date.

         a.    Distributions during year ending on the determination date. The
               present values of accrued benefits and the amounts of account
               balances of an employee as of the determination date shall be
               increased by the distributions made with respect to the employee
               under the plan and any plan aggregated with the plan under
               Section 416(g)(2) of the Code during the 1-year period ending on
               the determination date. The preceding sentence shall also apply
               to distributions under a terminated plan which, had it not been
               terminated, would have been aggregated with the plan under
               Section 416(g)(2)(A)(i) of the Code. In the case of a
               distribution made for a reason other than separation from
               service, death, or disability, this provision shall be applied by
               substituting "5-year period" for "1-year period."

         b.    Employees not performing services during year ending on the
               determination date. The accrued benefits and accounts of any
               individual who has not performed services for the employer during
               the 1-year period ending on the determination date shall not be
               taken into account.

10.3     Minimum benefits.
         -----------------

10.3.1   Matching contributions. Employer matching contributions shall be taken
         into account for purposes of satisfying the minimum contribution
         requirements of Section 416(c)(2) of the Code and the plan. The
         preceding sentence shall apply with respect to matching contributions
         under the plan or, if the plan provides that the minimum contribution
         requirement shall be met in another plan, such other plan. Employer
         matching contributions that are used to satisfy the minimum
         contribution requirements shall be treated as matching contributions
         for purposes of the actual contribution percentage test and other
         requirements of Section 401(m) of the Code.

10.3.2   Contributions under other plans. The employer may provide, in an
         addendum to this amendment, that the minimum benefit requirement shall
         be met in another plan (including another plan that consists solely of
         a cash or deferred arrangement which meets the requirements of Section
         401(k)(12) of the Code and matching contributions with respect to which
         the requirements of Section 401(m)(11) of the Code are met). The
         addendum should include the name of the other plan, the minimum benefit
         that will be provided under such other plan, and the employees who will
         receive the minimum benefit under such other plan.

                                   ARTICLE XI
                                DIRECT ROLLOVERS

11.1     Effective date. This Article shall apply to distributions made after
         December 31, 2001.

11.2     Modification of definition of eligible retirement plan. For purposes of
         the direct rollover provisions of the plan, an eligible retirement plan
         shall also mean an annuity contract described in Section 403(b) of the
         Code and an eligible plan under Section 457(b) of the Code which is
         maintained by a state, political subdivision of a state, or any agency
         or instrumentality of a state or political subdivision of a state and
         which agrees to separately account for amounts transferred into such
         plan from this plan. The definition of eligible retirement plan shall
         also apply in the case of a distribution to a surviving spouse, or to a
         spouse or former spouse who is the alternate payee under a qualified
         domestic relation order, as defined in Section 414(p) of the Code.

11.3     Modification of definition of eligible rollover distribution to exclude
         hardship distributions. For purposes of the direct rollover provisions
         of the plan, any amount that is distributed on account of hardship
         shall not be an eligible rollover distribution and the distributee may
         not elect to have any portion of such a distribution paid directly to
         an eligible retirement plan.

(C) Copyright 2001 Qualified Plan Consultants, LLC 11/04


                                       4
<PAGE>

                                                                EGTRRA - Sponsor

11.4  Modification of definition of eligible rollover distribution to include
      after-tax employee contributions. For purposes of the direct rollover
      provisions in the plan, a portion of a distribution shall not fail to be
      an eligible rollover distribution merely because the portion consists of
      after-tax employee contributions which are not includible in gross income.
      However, such portion may be transferred only to an individual retirement
      account or annuity described in Section 408(a) or (b) of the Code, or to a
      qualified defined contribution plan described in Section 401(a) or 403(a)
      of the Code that agrees to separately account for amounts so transferred,
      including separately accounting for the portion of such distribution which
      is includible in gross income and the portion of such distribution which
      is not so includible.

                                   ARTICLE XII
                           ROLLOVERS FROM OTHER PLANS

Rollovers from other plans. The employer, operationally and on a
nondiscriminatory basis, may limit the source of rollover contributions that may
be accepted by this plan.

                                  ARTICLE XIII
                           REPEAL OF MULTIPLE USE TEST

Repeal of Multiple Use Test. The multiple use test described in Treasury
Regulation Section 1.401(m)-2 and the plan shall not apply for plan years
beginning after December 31, 2001.

                                   ARTICLE XIV
                               ELECTIVE DEFERRALS

14.1  Elective Deferrals - Contribution Limitation. No participant shall be
      permitted to have elective deferrals made under this plan, or any other
      qualified plan maintained by the employer during any taxable year, in
      excess of the dollar limitation contained in Section 402(g) of the Code in
      effect for such taxable year, except to the extent permitted under Article
      VI of this amendment and Section 414(v) of the Code, if applicable.

14.2  Maximum Salary Reduction Contributions for SIMPLE plans. If this is a
      SIMPLE 401(k) plan, then except to the extent permitted under Article VI
      of this amendment and Section 414(v) of the Code, if applicable, the
      maximum salary reduction contribution that can be made to this plan is the
      amount determined under Section 408(p)(2)(A)(ii) of the Code for the
      calendar year.

                                   ARTICLE XV
                           SAFE HARBOR PLAN PROVISIONS

Modification of Top-Heavy Rules. The top-heavy requirements of Section 416 of
the Code and the plan shall not apply in any year beginning after December 31,
2001, in which the plan consists solely of a cash or deferred arrangement which
meets the requirements of Section 401(k)(12) of the Code and matching
contributions with respect to which the requirements of Section 401(m)(11) of
the Code are met.

                                   ARTICLE XVI
                    DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT

16.1  Effective date. This Article shall apply for distributions and
      transactions made after December 31, 2001, regardless of when the
      severance of employment occurred.

16.2  New distributable event. A participant's elective deferrals, qualified
      nonelective contributions, qualified matching contributions, and earnings
      attributable to these contributions shall be distributed on account of the
      participant's severance from employment. However, such a distribution
      shall be subject to the other provisions of the plan regarding
      distributions, other than provisions that require a separation from
      service before such amounts may be distributed.

(C) Copyright 2001 Qualified Plan Consultants, LLC 11/04


                                       5
<PAGE>

                                                                EGTRRA - Sponsor

Except with respect to any election made by the employer in Article II, this
amendment is hereby adopted by the prototype sponsor on behalf of all adopting
employers on:

[Sponsor's signature and Adoption Date are on file with Sponsor]

NOTE: The employer only needs to execute this amendment if an election has been
made in Article II of this amendment.

This amendment has been executed this _________________ day of
______________________________, ________.

Name of Employer: Horizon Federal Savings Bank
                  ----------------------------


By:
    -------------------------------------
                  EMPLOYER

Name of Plan: Horizon Federal Savings Bank 401(k) Plan
              ----------------------------------------


                                       6
<PAGE>

                                   POST-EGTRRA
                                AMENDMENT TO THE

                    HORIZON FEDERAL SAVINGS BANK 401(K) PLAN

<PAGE>

                                    ARTICLE I
                                    PREAMBLE

1.1   Adoption and effective date of amendment. This amendment of the plan is
      adopted to reflect certain provisions of the Economic Growth and Tax
      Relief Reconciliation Act of 2001 ("EGTRRA"), the Job Creation and Worker
      Assistance Act of 2002, IRS Regulations issued pursuant to IRC
      ss.401(a)(9), and other IRS guidance. This amendment is intended as good
      faith compliance with the requirements of EGTRRA and is to be construed in
      accordance with EGTRRA and guidance issued thereunder. Except as otherwise
      provided, this amendment shall be effective as of the first day of the
      first plan year beginning after December 31, 2001.

1.2   Supersession of inconsistent provisions. This amendment shall supersede
      the provisions of the plan to the extent those provisions are inconsistent
      with the provisions of this amendment.

1.3   Adoption by prototype sponsor. Except as otherwise provided herein,
      pursuant to Section 5.01 of Revenue Procedure 2000-20, the sponsor hereby
      adopts this amendment on behalf of all adopting employers.

                                   ARTICLE II
                          ADOPTION AGREEMENT ELECTIONS

      The questions in this Article II only need to be completed in order to
      override the default provisions set forth below. If all of the default
      provisions will apply, then these questions should be skipped.

      Unless the employer elects otherwise in this Article II, the following
      defaults apply:

      1.    If catch-up contributions are permitted, then the catch-up
            contributions are treated like any other elective deferrals for
            purposes of determining matching contributions under the plan.

      2.    For plans subject to the qualified joint and survivor annuity rules,
            rollovers are automatically excluded in determining whether the
            $5,000 threshold has been exceeded for automatic cash-outs (if the
            plan provides for automatic cash-outs). This is applied to all
            participants regardless of when the distributable event occurred.

      3.    The minimum distribution requirements are effective for distribution
            calendar years beginning with the 2002 calendar year. In addition,
            participants or beneficiaries may elect on an individual basis
            whether the 5-year rule or the life expectancy rule in the plan
            applies to distributions after the death of a participant who has a
            designated beneficiary.

      4.    Amounts that are "deemed 125 compensation" are not included in the
            definition of compensation.

2.1   Exclusion of Rollovers in Application of Involuntary Cash-out Provisions.
      If the plan is subject to the joint and survivor annuity rules and
      includes involuntary cash-out provisions, then unless one of the options
      below is elected, effective for distributions made after December 31,
      2001, rollover contributions will be excluded in determining the value of
      a participant's nonforfeitable account balance for purposes of the plan's
      involuntary cash-out rules.

      a. |_| Rollover contributions will not be excluded.

      b. |_| Rollover contributions will be excluded only with respect to
             distributions made after _____ (Enter a date no earlier than
             December 31, 2001).

      c. |_| Rollover contributions will only be excluded with respect to
             participants who separated from service after _____. (Enter a date.
             The date may be earlier than December 31, 2001.)

2.2   Catch-up contributions (for 401(k) profit sharing plans only): The plan
      permits catch-up contributions effective for calendar years beginning
      after December 31, 2001, (Article V) unless otherwise elected below.

      a. |_| The plan does not permit catch-up contributions to be made.

      b. |_| Catch-up contributions are permitted effective as of:_____ (enter a
             date no earlier than January 1, 2002).

      And, catch-up contributions will be taken into account in applying any
      matching contribution under the Plan unless otherwise elected below.

      c. |_| Catch-up contributions will not be taken into account in applying
             any matching contribution under the Plan.

2.3   Amendment for Section 401(a)(9) Final and Temporary Treasury Regulations.

      a.    Effective date. Unless a later effective date is specified in below,
            the provisions of Article VI of this amendment will apply for
            purposes of determining required minimum distributions for calendar
            years beginning with the 2002 calendar year.

<PAGE>

            |_|   This amendment applies for purposes of determining required
                  minimum distributions for distribution calendar years
                  beginning with the 2003 calendar year, as well as required
                  minimum distributions for the 2002 distribution calendar year
                  that are made on or after (leave blank if this amendment does
                  not apply to any minimum distributions for the 2002
                  distribution calendar year).

      b.    Election to not permit Participants or Beneficiaries to Elect 5-Year
            Rule.

            Unless elected below, Participants or beneficiaries may elect on an
            individual basis whether the 5-year rule or the life expectancy rule
            in Sections 6.2.2 and 6.4.2 of this amendment 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 6.2.2 of this amendment, 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 paragraph, distributions will be made in
            accordance with Sections 6.2.2 and 6.4.2 of this amendment and, if
            applicable, the elections in Section 2.3.c of this amendment below.

            |_|   The provision set forth above in this Section 2.3.b shall not
                  apply. Rather, Sections 6.2.2 and 6.4.2 of this amendment
                  shall apply except as elected in Section 2.3.c of this
                  amendment below.

      c.    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
                  the Plan, 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 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.

                  If the above is elected, then this election will apply to:

                  1. |_| All distributions.

                  2. |_| The following distributions: _____.

      d.    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.

2.4   Deemed 125 Compensation. Article VII of this amendment shall not apply
      unless otherwise elected below.

            |_|   Article VII of this amendment (Deemed 125 Compensation) shall
                  apply effective as of Plan Years and Limitation Years
                  beginning on or after ______ (insert the later of January 1,
                  1998, or the first day of the first plan year the Plan used
                  this definition).

                                   ARTICLE III
                              INVOLUNTARY CASH-OUTS

3.1   Applicability and effective date. If the plan is subject to the qualified
      joint and survivor annuity rules and provides for involuntary cash-outs of
      amounts less than $5,000, then unless otherwise elected in Section 2.1 of
      this amendment, this Article shall apply for distributions made after
      December 31, 2001, and shall apply to all participants.

3.2   Rollovers disregarded in determining value of account balance for
      involuntary distributions. For purposes of the Sections of the plan that
      provide for the involuntary distribution of vested accrued benefits of
      $5,000 or less, the value of a participant's nonforfeitable account
      balance shall be determined without regard to that portion of the account
      balance that is attributable to rollover contributions (and earnings
      allocable thereto) within the meaning of Sections 402(c), 403(a)(4),
      403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If the value of
      the participant's nonforfeitable account balance as so determined is
      $5,000 or less, then the plan shall immediately distribute the
      participant's entire nonforfeitable account balance.

<PAGE>

                                   ARTICLE IV
                             HARDSHIP DISTRIBUTIONS

Reduction of Section 402(g) of the Code following hardship distribution. If the
plan provides for hardship distributions upon satisfaction of the safe harbor
(deemed) standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv),
then effective as of the date the elective deferral suspension period is reduced
from 12 months to 6 months pursuant to EGTRRA, there shall be no reduction in
the maximum amount of elective deferrals that a Participant may make pursuant to
Section 402(g) of the Code solely because of a hardship distribution made by
this plan or any other plan of the Employer.

                                    ARTICLE V
                             CATCH-UP CONTRIBUTIONS

Catch-up Contributions. Unless otherwise elected in Section 2.2 of this
amendment, effective for calendar years beginning after December 31, 2001, all
employees who are eligible to make elective deferrals under this plan and who
have attained age 50 before the close of the calendar year shall be eligible to
make catch-up contributions in accordance with, and subject to the limitations
of, Section 414(v) of the Code. Such catch-up contributions shall not be taken
into account for purposes of the provisions of the plan implementing the
required limitations of Sections 402(g) and 415 of the Code. The plan shall not
be treated as failing to satisfy the provisions of the plan implementing the
requirements of Sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of
the Code, as applicable, by reason of the making of such catch-up contributions.

If elected in Section 2.2, catch-up contributions shall not be treated as
elective deferrals for purposes of applying any Employer matching contributions
under the plan.

                                   ARTICLE VI
                         REQUIRED MINIMUM DISTRIBUTIONS

6.1   GENERAL RULES

6.1.1 Effective Date. Unless a later effective date is specified in Section
      2.3.a of this amendment, the provisions of this amendment will apply for
      purposes of determining required minimum distributions for calendar years
      beginning with the 2002 calendar year.

6.1.2 Coordination with Minimum Distribution Requirements Previously in Effect.
      If the effective date of this amendment is earlier than calendar years
      beginning with the 2003 calendar year, required minimum distributions for
      2002 under this amendment will be determined as follows. If the total
      amount of 2002 required minimum distributions under the Plan made to the
      distributee prior to the effective date of this amendment equals or
      exceeds the required minimum distributions determined under this
      amendment, then no additional distributions will be required to be made
      for 2002 on or after such date to the distributee. If the total amount of
      2002 required minimum distributions under the Plan made to the distributee
      prior to the effective date of this amendment is less than the amount
      determined under this amendment, then required minimum distributions for
      2002 on and after such date will be determined so that the total amount of
      required minimum distributions for 2002 made to the distributee will be
      the amount determined under this amendment.

6.1.3 Precedence. The requirements of this amendment will take precedence over
      any inconsistent provisions of the Plan.

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

6.1.5 TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of
      this amendment, 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 that
      relate to Section 242(b)(2) of TEFRA.

6.2   TIME AND MANNER OF DISTRIBUTION

6.2.1 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.

6.2.2 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, then, except as provided in Article VI,
      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.

<PAGE>

      (b) If the Participant's surviving spouse is not the Participant's sole
      designated beneficiary, then, except as provided in Section 2.3 of this
      amendment, 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 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
      6.2.2, other than Section 6.2.2(a), will apply as if the surviving spouse
      were the Participant.

      For purposes of this Section 6.2.2 and Section 2.3, unless Section
      6.2.2(d) applies, distributions are considered to begin on the
      Participant's required beginning date. If Section 6.2.2(d) applies,
      distributions are considered to begin on the date distributions are
      required to begin to the surviving spouse under Section 6.2.2(a). If
      distributions under an annuity purchased from an insurance company
      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
      6.2.2(a)), the date distributions are considered to begin is the date
      distributions actually commence.

6.2.3 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 6.3
      and 6.4 of this amendment. 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.

6.3   REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT'S LIFETIME

6.3.1 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 account balance 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 account balance by the number in the Joint and
      Last Survivor Table set forth in Section 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.

6.3.2 Lifetime Required Minimum Distributions Continue Through Year of
      Participant's Death. Required minimum distributions will be determined
      under this Section 6.3 beginning with the first distribution calendar year
      and up to and including the distribution calendar year that includes the
      Participant's date of death.

6.4   REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT'S DEATH

6.4.1 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 account balance 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:

            (1) 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.

            (2) 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.

            (3) 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.

<PAGE>

            (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 account balance 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.

6.4.2 Death Before Date Distributions Begin.

      (a) Participant Survived by Designated Beneficiary. Except as provided in
      Section 2.3, 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
      account balance by the remaining life expectancy of the Participant's
      designated beneficiary, determined as provided in Section 6.4.1.

      (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 6.2.2(a), this
      Section 6.4.2 will apply as if the surviving spouse were the Participant.

6.5   DEFINITIONS

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

6.5.2 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
      6.2.2. 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.

6.5.3 Life expectancy. Life expectancy as computed by use of the Single Life
      Table in Section 1.401(a)(9)-9 of the Treasury regulations.

6.5.4 Participant's account balance. The account balance as 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 account
      balance as of the 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 account balance 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.

6.5.5 Required beginning date. The date specified in the Plan when distributions
      under Section 401(a)(9) of the Internal Revenue Code are required to
      begin.

                                   ARTICLE VII
                             DEEMED 125 COMPENSATION

If elected, this Article shall apply as of the effective date specified in
Section 2.4 of this amendment. For purposes of any definition of compensation
under this Plan that includes a reference to amounts under Section 125 of the
Code, amounts under Section 125 of the Code include any amounts not available to
a Participant in cash in lieu of group health coverage because the Participant
is unable to certify that he or she has other health coverage. An amount will be
treated as an amount under Section 125 of the Code only if the Employer does not
request or collect information regarding the Participant's other health coverage
as part of the enrollment process for the health plan.

<PAGE>

Except with respect to any election made by the employer in Article II, this
amendment is hereby adopted by the prototype sponsor on behalf of all adopting
employers on

[Sponsor's signature and Adoption Date are on file with Sponsor]

NOTE: The employer only needs to execute this amendment if an election has been
made in Article II of this amendment.

This amendment has been executed this _________________ day of
______________________________, ________.

Name of Plan: Horizon Federal Savings Bank 401(k) Plan
              ----------------------------------------

Name of Employer: Horizon Federal Savings Bank
                 -------------------------------------


By:   ---------------------------------------------------
                        EMPLOYER

Name of Participating Employer:
                                ----------------------


By:
    ---------------------------------------------------
          PARTICIPATING EMPLOYER