<PAGE>

                                                                    Exhibit 10.1

                             JEFFERSON FEDERAL BANK

                          EMPLOYEE STOCK OWNERSHIP PLAN

                            Effective January 1, 2003

<PAGE>

                             JEFFERSON FEDERAL BANK
                          EMPLOYEE STOCK OWNERSHIP PLAN
                                  CERTIFICATION

         I, Anderson L. Smith, President and Chief Executive Officer of
Jefferson Federal Bank, hereby certify that the attached Jefferson Federal Bank
Employee Stock Ownership Plan, effective January 1, 2003 was adopted at a duly
held meeting of the Board of Directors of the Bank.

ATTEST:                               JEFFERSON FEDERAL BANK

___________________                   By:_______________________________________
                                      Anderson L. Smith
                                      President and Chief Executive Officer

<PAGE>

                             Jefferson Federal Bank
                          Employee Stock Ownership Plan

                                Table of Contents

<TABLE>
<S>                                                                          <C>
Section 1 - Introduction ...................................................  1

Section 2 - Definitions ....................................................  2

Section 3 - Eligibility and Participation .................................. 10

Section 4 - Contributions .................................................. 12

Section 5 - Plan Accounting ................................................ 15

Section 6 - Vesting and Forfeitures ........................................ 24

Section 7 - Distributions .................................................. 27

Section 8 - Voting of Company Stock and Tender Offers ...................... 32

Section 9 - The Committee and Plan Administration .......................... 33

Section 10 - Rules Governing Benefit Claims ................................ 37

Section 11 - The Trust ..................................................... 38

Section 12 - Adoption, Amendment and Termination ........................... 40

Section 13 - General Provisions ............................................ 42

Section 14 - Top-Heavy Provisions .......................................... 44
</TABLE>

<PAGE>

                             JEFFERSON FEDERAL BANK
                          EMPLOYEE STOCK OWNERSHIP PLAN

                                    SECTION 1
                                  Introduction

Section 1.01  Nature of the Plan.

Effective as of January 1, 2003, (the "Effective Date"), Jefferson Federal Bank,
a federally-chartered savings bank (the "Bank"), hereby establishes the
Jefferson Federal Bank Employee Stock Ownership Plan (the "Plan") to enable
Eligible Employees (as defined in Section 2.01(o) of the Plan) to acquire stock
ownership interests in Jefferson Bancshares, Inc. (the "Company"). The Bank
intends this Plan to be a tax-qualified stock bonus plan under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code") and an employee stock
ownership plan within the meaning of Section 407(d)(6) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and Sections 409
and 4975(e)(7) of the Code. The Plan is designed to invest primarily in the
common stock of the Company, which stock constitutes "qualifying employer
securities" within the meaning of Section 407(d)(5) of ERISA and Sections 409(l)
and 4975(e)(8) of the Code. Accordingly, the Plan and Trust Agreement (as
defined in Section 2.01(oo) of the Plan) shall be interpreted and applied in a
manner consistent with the Bank's intent for it to be a tax-qualified plan
designed to invest primarily in qualifying employer securities.

The Plan reflects certain provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA). The provisions related to EGTRRA are
intended as a goal for the compliance with EGTRRA and guidance issued
thereunder. To the extent any provision of the Plan was operated according to an
effective date earlier than as required by law, then such date shall be the
effective date with respect to that provision of the Plan.

Section 1.02  Employers and Affiliates.

The Bank and each of its Affiliates (as defined in Section 2.01(c) of the Plan)
which, with the consent of the Bank, adopts the Plan pursuant to the provisions
of Section 12.01 of the Plan are collectively referred to as the "Employers" and
individually as an "Employer." The Plan shall be treated as a single plan with
respect to all participating Employers.

<PAGE>

                                    SECTION 2
                                   Definitions

Section 2.01  Definitions.

In this Plan, whenever the context so indicates, the singular or the plural
number and the masculine or feminine gender shall be deemed to include the
other, the terms "he," "his," and "him," shall refer to a Participant or
Beneficiary, as the case may be, and, except as otherwise provided, or unless
the context otherwise requires, the capitalized terms shall have the following
meanings:

(a)      "Account" or "Accounts" mean a Participant's or Beneficiary's Company
         Stock Account and/or his Other Investments Account, as the context so
         requires.

(b)      "Acquisition Loan" means a loan (or other extension of credit,
         including an installment obligation to a "party in interest" (as
         defined in Section 3(14) of ERISA)) incurred by the Trustee in
         connection with the purchase of Company Stock.

(c)      "Affiliate" means any corporation, trade or business, which, at the
         time of reference, is together with the Bank, a member of a controlled
         group of corporations, a group of trades or businesses (whether or not
         incorporated) under common control, or an affiliated service group, as
         described in Sections 414(b), 414(c), and 414(m) of the Code,
         respectively, or any other organization treated as a single employer
         with the Bank under Section 414(o) of the Code; provided, however,
         that, where the context so requires, the term "Affiliate" shall be
         construed to give full effect to the provisions of Sections 409(l)(4)
         and 415(h) of the Code.

(d)      "Bank" means Jefferson Federal Bank, and any entity which succeeds to
         the business of Jefferson Federal Bank and which adopts this Plan in
         accordance with the provisions of Section 12.02 of the Plan or by
         written agreement assuming the obligations of the Plan.

(e)      "Beneficiary" means the person(s) entitled to receive benefits under
         the Plan following a Participant's death, pursuant to Section 7.03 of
         the Plan.

(f)      "Change in Control." means any one of the following events occurs:

         (i)   Merger: Company merges into or consolidates with another
               corporation, or merges another corporation into the Company, and
               as a result less than a majority of the combined voting power of
               the resulting corporation immediately after the merger or
               consolidation is held by persons who were stockholders of the
               Company immediately before the merger or consolidation;

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         (ii)     Acquisition of Significant Share Ownership: a report on
                  Schedule 13D or another form or schedule (other than Schedule
                  13G) is filed or is required to be filed under Sections 13(d)
                  or 14(d) of the Securities Exchange Act of 1934, if the
                  schedule discloses that the filing person or persons acting in
                  concert has or have become the beneficial owner of 25% or more
                  of a class of the Company's voting securities, but this clause
                  (b) shall not apply to beneficial ownership of Company voting
                  shares held in a fiduciary capacity by an entity of which
                  Company directly or indirectly beneficially owns 50% or more
                  of its outstanding voting securities;

         (iii)    Change in Board Composition: during any period of two
                  consecutive years, individuals who constitute the Company's
                  Board of Directors at the beginning of the two-year period
                  cease for any reason to constitute at least a majority of the
                  Company's Board of Directors; provided, however, that for
                  purposes of this clause (iii) each director who is first
                  elected by the board (or first nominated by the board for
                  election by stockholders) by a vote of at least two-thirds of
                  the directors who were directors at the beginning of the
                  period shall be deemed to have been a director at the
                  beginning of the two-year period; or

         (iv)     Sale of Assets: Company sells to a third party all or
                  substantially all of the Company's assets.

(g)      "Code" means the Internal Revenue Code of 1986, as amended.

(h)      "Committee" means the individual(s) responsible for the administration
         of the Plan in accordance with Section 9 of the Plan.

(i)      "Company" means Jefferson Bancshares, Inc. and any entity which
         succeeds to the business of Jefferson Bancshares, Inc.

(j)      "Company Stock" means shares of the voting common stock or preferred
         stock, meeting the requirements of Section 409 of the Code and Section
         407(d)(5) of ERISA, issued by the Bank or its Affiliates.

(k)      "Company Stock Account" means the account established and maintained in
         the name of each Participant or Beneficiary to reflect his share of the
         Trust Fund invested in Company Stock.

(l)      "Compensation" means

         (i)   an Employee's wages as defined in Section 3401(a) of the Code
               (exclusive of any compensation deferred from a prior year)
               together with all other compensatory payments to an Employee by
               the Employer with respect to which the Employer must furnish to
               the Employee a written statement pursuant to Sections 6041(d)

                                       3

<PAGE>

               and 6051(a) of the Code, but determined without regard to any
               rules which limit the remuneration included in wages based on the
               nature or location of the employment or services performed,
               excluding reimbursements or other expense allowances, moving
               expenses, fringe benefits and welfare benefits.

         (ii)  Notwithstanding the above, Compensation shall include any amount
               which is contributed by the Employer pursuant to a salary
               reduction agreement and which is not includible in the gross
               income of the employee under Sections 125, 132(f) and 402(e)(3).

A Participant's Compensation shall not exceed $200,000 (as periodically adjusted
pursuant to Section 401(a)(17) of the Code). If a Participant's Compensation is
determined on a basis of a period of less than twelve (12) calendar months, then
the compensation limit for such Participant shall be the Compensation Limit in
effect for the Plan Year in which the period begins multiplied by a ratio
obtained by dividing the number of full months in the period by twelve (12).

Notwithstanding the foregoing, to the extent this definition of Compensation
does not satisfy the requirements of Section 414(s) of the Code for any
particular Plan Year, then, for that Plan Year, Compensation shall have the
meaning provided in Section 1.415.2(d)(2) and (3) of the Treasury Regulations.

(m)      "Disability" means permanent and total disability as defined in Section
         22(e)3 of the Code.

(n)      "Early Retirement Age" means age 55.

(o)      "Effective Date" means January 1, 2003.

(p)      "Eligible Employee" means any Employee who is not precluded from
         participating in the Plan by reason of the provisions of Section 3.02
         of the Plan.

(q)      "Employee" means any person, who is actually performing services for
         the Employer or an Affiliate in a common-law, employer-employee
         relationship as determined under Sections 31.3121(d)-1, 31.3306(i)-1,
         or 31.3401(c)-1 of the Treasury Regulations and any "leased employee",
         who pursuant to an agreement between the Employer and any other person,
         including a leasing organization, has performed services for the
         Employer (or for the Employer and related persons determined in
         accordance with Section 414(n)(6) of the Code) on a substantially
         full-time basis for a period of a least one (1) year, and such services
         are performed under the primary direction and control of the Employer.

(r)      "Employer" or "Employers" means the Bank and its Affiliates, which
         adopt the Plan in accordance with the provisions of Section 12.01 of
         the Plan, and any entity which succeeds to the business of the Bank or
         its Affiliates and which adopts the Plan in

                                       4

<PAGE>

         accordance with the provisions of Section 12.02 of the Plan or by
         written agreement assumes the obligations under the Plan.

(s)      "Entry Date" means the first day of each January and July coinciding
         with or next following the date the Employee satisfies the requirements
         under Section 3.01 of the Plan.

(t)      "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended.

(u)      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

(v)      "Financed Shares" means shares of Company Stock acquired by the Trustee
         with the proceeds of an Acquisition Loan, which shall constitute
         "qualifying employer securities" under Section 409(l) of the Code and
         any shares of Company Stock received upon conversion or exchange of
         such shares.

(w)      "Highly Compensated Employee" means an Employee who, for a particular
         Plan Year, satisfies one of the following conditions:

         (i)   was a "5-percent owner" (as defined in Section 414(q)(2) of the
               Code) during the year or the preceding year, or

         (ii)  for the preceding year, had "compensation" (as defined in Section
               414(q)(4) of the Code) from the Bank and its Affiliates exceeding
               $90,000 (as periodically adjusted pursuant to Section 414(q)(1)
               of the Code).

(x)      "Hours of Service" means:

         (i)   Each hour for which an Employee is paid, or entitled to payment,
               for performing duties for the Employer during the applicable
               computation period.

         (ii)  Each hour for which an Employee is paid, or entitled to payment,
               for a period during which no duties are performed (irrespective
               of whether the employment relationship has terminated) due to
               vacation, holiday, illness, incapacity (including disability),
               layoff, jury duty, military duty or leave of absence.
               Notwithstanding the preceding sentence, no credit shall be given
               to the Employee for:

               (A)  more than 501 hours under this clause (ii) because of any
                    single continuous period in which the Employee performs no
                    duties (whether or not such period occurs in a single
                    computation period);

               (B)  an hour for which the Employee is directly or indirectly
                    paid, or entitled to payment, because of a period in which
                    no duties are performed if such payment is made or due under
                    a plan maintained solely for the purpose of

                                       5

<PAGE>

                    complying with applicable worker's or workmen's
                    compensation, or unemployment, or disability insurance laws;
                    or

               (C)  an hour or a payment which solely reimburses the Employee
                    for medical or medically-related expenses incurred by the
                    Employee.

         (iii) Each hour for which back pay, irrespective of mitigation of
               damages, is either awarded or agreed to by the Employer;
               provided, however, that hours credited under either clause (i) or
               (ii) above shall not also be credited under this clause (iii).
               Crediting of hours for back pay awarded or agreed to with respect
               to periods described in clause (ii) above will be subject to the
               limitations set forth in that clause.

The crediting of Hours of Service shall be determined by the Committee in
accordance with the rules set forth in Section 2530.200b-3 of the regulations
prescribed by the Department of Labor, which rules shall be consistently applied
with respect to all Employees within the same job classification. Hours of
Service will be credited for employment with an Affiliate.

(y)      "Loan Suspense Account" means that portion of the Trust Fund consisting
         of Company Stock acquired with an Acquisition Loan which has not yet
         been allocated to the Participants' Accounts.

(z)      "Normal Retirement Age" means age 65.

(aa)     "One Year Period of Severance" means a twelve (12) consecutive month
         period following an Employee's Termination of Service with the Employer
         during which the Employee did not perform an Hour of Service.
         Notwithstanding the foregoing, if an Employee is absent from employment
         for maternity or paternity reasons, such absence during the twenty-four
         (24) month period commencing on the first date of such absence shall
         not constitute a One Year Period of Severance. An absence from
         employment for maternity or paternity reasons means an absence:

         (i)   by reason of pregnancy of the Employee,

         (ii)  by reason of a birth of a child of the Employee,

         (iii) by reason of the placement of a child with the Employee in
               connection with the adoption of such child by such Employee, or

         (iv)  for purposes of caring for such child for a period beginning
               immediately following such birth or placement.

                                       6

<PAGE>

(bb)     "Other Investments Account" means the account established and
         maintained in the name of each Participant or Beneficiary to reflect
         his share of the Trust Fund, other than Company Stock.

(cc)     "Participant" means any Eligible Employee who has become a Participant
         in accordance with Section 3.01 of the Plan or any other person with an
         Account balance under the Plan.

(dd)     "Plan" means this Jefferson Federal Bank Employee Stock Ownership Plan,
         as amended from time to time.

(ee)     "Plan Year" means the calendar year.

(ff)     "Recognized Absence" means a period for which:

         (i)   an Employer grants an Employee a leave of absence for a limited
               period of time, but only if an Employer grants such leaves of
               absence on a nondiscriminatory basis to all Eligible Employees;
               or

         (ii)  an Employee is temporarily laid off by an Employer because of a
               change in the business conditions of the Employer; or

         (iii) an Employee is on active military duty, but only to the extent
               that his employment rights are protected by the Military
               Selective Service Act of 1967 (38 U.S.C. (S) 2021).

(gg)     "Retirement Date" means a Participant's date of Retirement following
         his attainment of his Normal Retirement Age or Early Retirement Age.

(hh)     "Service" means employment with the Bank or an Affiliate.

(ii)     "Termination of Service" means the earlier of (a) the date on which an
         Employee's service is terminated by reason of his resignation,
         retirement, discharge, death or Disability or (b) the first anniversary
         of the date on which such Employee's service is terminated for
         disability of a short-term nature or any other reason. Service in the
         Armed Forces of the United States shall not constitute a Termination of
         Service but shall be considered to be a period of employment by the
         Employer provided (i) such military service is caused by war or other
         emergency or the Employee is required to serve under the laws of
         conscription in time of peace, (ii) the Employee returns to employment
         with the Employer within six (6) months following discharge from such
         military service and (iii) such Employee is reemployed by the Employer
         at a time when the Employee had a right to reemployment at his former
         position or substantially similar position upon separation from such
         military duty in accordance with seniority rights as protected under
         the laws of the United States. A leave of absence granted to an
         Employee by the

                                       7

<PAGE>

         Employer shall not constitute a Termination of Service provided that
         the Participant returns to the active service of the Employer at the
         expiration of any such period for which leave has been granted.
         Notwithstanding the foregoing, an Employee who is absent from service
         with the Employer beyond the first anniversary of the first date of
         his absence for maternity or paternity reasons set forth in Section
         2.01(cc) of the Plan shall incur a Termination of Service for purposes
         of the Plan on the second anniversary of the date of such absence.

(jj)     "Treasury Regulations" means the regulations promulgated by the
         Department of Treasury under the Code.

(kk)     "Trust" means the Jefferson Federal Bank Employee Stock Ownership Plan
         Trust created in connection with the establishment of the Plan.

(ll)     "Trust Agreement" means the trust agreement establishing the Trust.

(mm)     "Trust Fund" means the assets held in the Trust for the benefit of
         Participants and their Beneficiaries.

(nn)     "Trustee" means the trustee or trustees from time to time in office
         under the Trust Agreement.

(oo)     "Valuation Date" means the last day of the Plan Year and each other
         date as of which the Committee shall determine the investment
         experience of the Trust Fund and adjust the Participants' Accounts
         accordingly.

(pp)     "Valuation Period" means the period following a Valuation Date and
         ending with the next Valuation Date.

(qq)     "Year of Service" is defined as a Plan Year in which an Employee
         performs 1,000 Hours of Service.

                                       8

<PAGE>


                                    SECTION 3
                          Eligibility and Participation

Section 3.01   Participation.

     An Eligible Employee shall enter the Plan upon satisfying the following
requirements:

          (i)  The Eligible Employee is at least 20 1/2 years of age and

          (ii) The Eligible Employee has completed six (6) consecutive calendar
               months (computed from the date an Employee performs his first
               Hour of Service for the Employer) during which he has performed
               at least 500 Hours of Service.

An Eligible Employee who has satisfied the above-noted eligibility requirements
shall enter the Plan and become a Participant on the earlier of the Effective
Date or the Entry Date coincident with or next following the date he satisfies
such requirements.

Section 3.02   Certain Employees Ineligible.

The following Employees are ineligible to participate in the Plan:

(a)  Employees covered by a collective bargaining agreement between the Employer
     and the Employee's collective bargaining representative if:

     (i)  retirement benefits have been the subject of good faith bargaining
          between the Employer and the representative, and

     (ii) the collective bargaining agreement does not expressly provide that
          Employees of such unit be covered under the Plan;

(b)  Employees who are "leased employees" (as defined in Section 414(n) of the
     Code);

(c)  Employees who are nonresident aliens and who receive no earned income from
     an Employer which constitutes income from sources within the United States;
     and

(d)  Employees of an Affiliate of the Bank that has not adopted the Plan
     pursuant to Sections 12.01 or 12.02 of the Plan.

Section 3.03  Transfer to Eligible Employment.

If an Employee ineligible to participate in the Plan by reason of Section 3.02
of the Plan transfers to employment as an Eligible Employee, he shall enter the
Plan as of the later of:

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<PAGE>

(a)  the first Entry Date after the date of transfer, or

(b)  the first Entry Date on which he could have become a Participant pursuant
     to Section 3.01 of the Plan if his prior employment with the Employer or
     Affiliate had been as an Eligible Employee.

Section 3.04   Participation after Reemployment.

Any former Employee who is re-employed by an Employer and has previously
satisfied the eligibility requirements of Section 3.01 of the Plan, and is not
otherwise excluded from participation by reason of Section 3.02 of the Plan,
shall re-enter the Plan and become a Participant as of his date of
re-employment. Any former Employee who is re-employed by an Employer and has not
previously satisfied the eligibility requirements of Section 3.01 of the Plan,
and is not otherwise excluded from participation by reason of Section 3.02 of
the Plan, shall enter the Plan and become a Participant as of the Entry Date
following his completion of the eligibility requirements of Section 3.01 of the
Plan.

Section 3.05   Participation Not Guarantee of Employment.

Participation in the Plan does not constitute a guarantee or contract of
employment and will not give any Employee the right to be retained in the employ
of the Bank or any of its Affiliates nor any right or claim to any benefit under
the terms of the Plan unless such right or claim has specifically accrued under
the Plan.

                                       10

<PAGE>

                                    SECTION 4
                                  Contributions

Section 4.01  Employer Contributions.

(a)  Discretionary Contributions. Each Plan Year, each Employer, in its
     discretion, may make a contribution to the Trust. Each Employer making a
     contribution for any Plan Year under this Section 4.01(a) will contribute
     to the Trustee cash equal to, or Company Stock or other property having an
     aggregate fair market value equal to, such amount as the Board of Directors
     of the Employer shall determine by resolution. Notwithstanding the
     Employer's discretion with respect to the medium of contribution, an
     Employer shall not make a contribution in any medium which would make such
     contribution a prohibited transaction (for which no exemption is provided)
     under Section 406 of ERISA or Section 4975 of the Code.

(b)  Employer Contributions for Acquisition Loans. Each Plan Year, the Employers
     shall, subject to the provisions of the Bank's "Plan of Reorganization" (as
     filed with the appropriate governmental agencies in connection with the
     Bank's reorganization into a mutual holding company form of organization)
     and any related regulatory prohibitions, contribute an amount of cash
     sufficient to enable to the Trustee to discharge any indebtedness incurred
     with respect to an Acquisition Loan pursuant to the terms of the
     Acquisition Loan. The Employers' obligation to make contributions under
     this Section 4.01(b) shall be reduced to the extent of any investment
     earnings attributable to such contributions and any cash dividends paid
     with respect to Company Stock held by the Trustee in the Loan Suspense
     Account. If there is more than one Acquisition Loan, the Employers shall
     designate the one to which any contribution pursuant to this Section
     4.01(b) is to be applied.

Section 4.02  Limitations on Contributions.

In no event shall an Employer's contribution(s) made under Section 4.01 of the
Plan for any Plan Year exceed the lesser of:

(a)  The maximum amount deductible under Section 404 of the Code by that
     Employer as an expense for Federal income tax purposes; and

(b)  The maximum amount which can be credited for that Plan Year in accordance
     with the allocation limitation provisions of Section 5.05 of the Plan.

Section 4.03  Acquisition Loans.

The Trustee may incur Acquisition Loans from time to time to finance the
acquisition of Company Stock for the Trust or to repay a prior Acquisition Loan.
An Acquisition Loan shall be for a specific term, shall bear a reasonable rate
of interest, and shall not be payable in demand

                                       11

<PAGE>

except in the event of default and shall be primarily for the benefit of
Participants and Beneficiaries of the Plan. An Acquisition Loan may be secured
by a collateral pledge of the Financed Shares so acquired and any other Plan
assets which are permissible security within the provisions of Section
54.4975-7(b) of the Treasury Regulations. No other assets of the Plan or Trust
may be pledged as collateral for an Acquisition Loan, and no lender shall have
recourse against any other Trust assets. Any pledge of Financed Shares must
provide for the release of shares so pledged on a basis equal to the principal
and interest (or if the requirements of Section 54.4975-7(b)(8)(ii) of the
Treasury Regulations are met and the Employer so elects, principal payments
only), paid by the Trustee on the Acquisition Loan. The released Financed Shares
shall be allocated by Participants' Accounts in accordance with the provisions
of Sections 5.04 or 5.08 of the Plan, whichever is applicable. Payment of
principal and interest on any Acquisition Loan shall be made by the Trustee only
from the Employer contributions paid in cash to enable the Trustee to repay such
loan in accordance with Sections 4.01(b) or 4.01(c) of the Plan, from earnings
attributable to such contributions, and any cash dividends received by the
Trustee on Financed Shares acquired with the proceeds of the Acquisition Loan
(including contributions, earnings and dividends received during or prior to the
year of repayment less such payments in prior years), whether or not allocated.
Financed Shares shall initially be credited to the Loan Suspense Account and
shall be transferred for allocation to the Company Stock Account of Participants
only as payments of principal and interest (or, if the requirements of Section
54.4975-7(b)(8)(ii) of the Treasury Regulations are met and the Employer so
elects, principal payments only), on the Acquisition Loan are made by the
Trustee. The number of Financed Shares to be released from the Loan Suspense
Account for allocation to Participants' Company Stock Account for each Plan Year
shall be based on the ratio that the payments of principal and interest (or, if
the requirements of Section 54.4975-7(b)(8)(ii) of the Treasury Regulations are
met and the Employer so elects, principal payments only), on the Acquisition
Loan for that Plan Year bears to the sum of the payments of principal and
interest on the Acquisition Loan for that Plan Year plus the total remaining
payment of principal and interest projected (or, if the requirements of Section
54.4975-7(b)(8)(ii) of the Treasury Regulations are met and the Employer so
elects, principal payments only), on the Acquisition Loan over the duration of
the Acquisition Loan repayment period, subject to the provisions of Section 5.05
of the Plan.

Section 4.04. Conditions as to Contributions.

In addition to the provisions of Section 12.03 of the Plan for the return of an
Employer's contributions in connection with a failure of the Plan to qualify
initially under the Code, any amount contributed by an Employer due to a good
faith mistake of fact, or based upon a good faith but erroneous determination of
its deductibility under Section 404 of the Code, shall be returned to the
Employer within one year after the date on which the Employer originally made
such contribution, or within one year after its nondeductibility has been
finally determined. However, the amount to be returned shall be reduced to take
account of any adverse investment experience within the Trust in order that the
balance credited to each Participant's Accounts is not less that it would have
been if the contribution had never been made by the Employer.

Section 4.05  Employee Contributions.

                                       12

<PAGE>


Employee contributions are neither required nor permitted under the Plan.

Section 4.06  Rollover Contributions.

Rollover contributions of assets from other tax-qualified retirement plans are
not permitted under the Plan.

Section 4.07  Trustee-to-Trustee Transfers.

Trustee-to-trustee transfer of assets from other tax-qualified retirement plans
are not permitted under the Plan.

                                       13

<PAGE>

                                    SECTION 5
                                 Plan Accounting

Section 5.01  Accounting for Allocations.

The Committee shall establish the Accounts (and sub-accounts, if deemed
necessary) for each Participant, and the accounting procedures for the purpose
of making the allocations to the Participants' Accounts provided for in this
Section 5. The Committee shall maintain adequate records of the cost basis of
shares of Company Stock allocated to each Participant's Company Stock Account.
The Committee also shall keep separate records of Financed Shares attributable
to each Acquisition Loan and of contributions made by the Employers (and any
earnings thereon) made for the purpose of enabling the Trustee to repay any
Acquisition Loan. From time to time, the Committee may modify its accounting
procedures for the purpose of achieving equitable and nondiscriminatory
allocations among the Accounts of Participants, in accordance with the
provisions of this Section 5 and the applicable requirements of the Code and
ERISA. In accordance with Section 9 of the Plan, the Committee may delegate the
responsibility for maintaining Accounts and records.

Section 5.02  Maintenance of Participants' Company Stock Accounts.

As of each Valuation Date, the Committee shall adjust the Company Stock Account
of each Participant to reflect activity during the Valuation Period as follows:

(a)  First, charge to each Participant's Company Stock Account all distributions
     and payments made to him that have not been previously charged;

(b)  Next, credit to each Participant's Company Stock Account the shares of
     Company Stock, if any, that have been purchased with amounts from his Other
     Investments Account, and adjust such Other Investments Account in
     accordance with the provisions of Section 5.03 of the Plan; and

(c)  Finally, credit to each Participant's Company Stock Account the shares of
     Company Stock representing contributions made by the Employers in the form
     of Company Stock and the number of Financed Shares released from the Loan
     Suspense Account under Section 4.03 of the Plan that are to be allocated
     and credited as of that date in accordance with the provisions of Section
     5.04 of the Plan.

                                       14

<PAGE>

Section 5.03  Maintenance of Participants' Other Investments Accounts.

As of each Valuation Date, the Committee shall adjust the Other Investments
Account of each Participant to reflect activity during the Valuation Period as
follows:

(a)  First, charge to each Participant's Other Investments Account all
     distributions and payments made to him that have not previously been
     charged;

(b)  Next, if Company Stock is purchased with assets from a Participant's Other
     Investments Account, the Participant's Other Investments Account shall be
     charged accordingly;

(c)  Next, subject to the dividend provisions of Section 5.08 of the Plan,
     credit to the Other Investments Account of each Participant any cash
     dividends paid to the Trustee on shares of Company Stock held in that
     Participant's Company Stock Account (as of the record date for such cash
     dividends) and dividends paid on shares of Company Stock held in the Loan
     Suspense Account that have not been used to repay any Acquisition Loan.
     Cash dividends that have not been used to repay an Acquisition Loan and
     have been credited to a Participant's Other Investments Account shall be
     applied by the Trustee to purchase shares of Company Stock, which shares
     shall then be credited to the Company Stock Account of such Participant.
     The Participant's Other Investments Account shall then be charged by the
     amount of cash used to purchase such Company Stock or used to repay any
     Acquisition Loan. In addition, any earnings on:

     (i)  Other Investments Accounts will be allocated to Participants' Other
          Investments Accounts, pro rata, based on such Other Investments
          Accounts balances as of the first day of the Valuation Period, and

     (ii) the Loan Suspense Account, other than dividends used to repay the
          Acquisition Loan, will be allocated to Participants' Other Investments
          Accounts, pro rata, based on their Other Investments Accounts balances
          as of the first day of the Valuation Period.

(d)  Next, allocate and credit the Employer contributions made pursuant to
     Section 4.01(b) of the Plan for the purpose of repaying any Acquisition
     Loan in accordance with Section 5.04 of the Plan. Such amount shall then be
     used to repay any Acquisition Loan and such Participant's Other Investments
     Account shall be charged accordingly; and

(e)  Finally, allocate and credit the Employer contributions (other than amounts
     contributed to repay an Acquisition Loan) that are made in cash (or
     property other than Company Stock) for the Plan Year to the Other
     Investments Account of each Participant in accordance with Section 5.04 of
     the Plan.

                                       15

<PAGE>


Section 5.04  Allocation and Crediting of Employer Contributions.

(a)  Except as otherwise provided for in Section 5.08 of the Plan, as of the
     Valuation Date for each Plan Year:

     (i)  Company Stock released from the Loan Suspense Account for that year
          and shares of Company Stock contributed directly to the Plan shall be
          allocated and credited to each Active Participant's (as defined in
          paragraph (b) of this Section 5.04) account based on the ratio that
          each Active Participant's Compensation bears to the aggregate
          Compensation of all Active Participants for the Plan Year, and then

     (ii) The cash contributions not used to repay an Acquisition Loan and any
          other property contributed for that year shall be allocated and
          credited to each Active Participant's Other Investment Account based
          on the ratio determined by comparing each Active Participant's
          Compensation while a Participant to the aggregate Compensation of all
          Active Participants for the Plan Year.

(b)  For purposes of this Section 5.04, the term "Active Participant" means
     those Eligible Employees who:

          (A)  were employed by that Employer, including Eligible Employees on a
               Recognized Absence, on the last day of the Plan Year and
               completed 1,000 Hours of Service during the Plan Year, or

          (B)  terminated employment during the Plan Year by reason of death,
               Disability, or attainment of their Retirement Date.

Section 5.05  Limitations on Allocations.

(a)  In General. Subject to the provisions of this Section 5.05, Section 415 of
     the Code shall be incorporated by reference into the terms of the Plan. No
     allocation shall be made under Section 5.04 of the Plan that would result
     in a violation of Section 415 of the Code.

(b)  Code Section 415 Compensation. For purposes of this Section 5.05,
     Compensation shall be adjusted to reflect the general rule of Section
     1.415-2(d) of the Treasury Regulations.

(c)  Limitation Year. The "limitation year" (within the meaning of Section 415
     of the Code) shall be the calendar year.

(d)  Multiple Defined Contribution Plans. In any case where a Participant also
     participates in another defined contribution plan of the Bank or its
     Affiliates, the appropriate committee of such other plan shall first reduce
     the after-tax contributions under any such plan, shall then reduce any
     elective deferrals under any such plan subject to Section

                                       16

<PAGE>

     401(k) of the Code, shall then reduce all other contributions under any
     other such plan and, if necessary, shall then reduce contributions under
     this Plan.

(e)  Excess Allocations. If, after applying the allocation provisions under
     Section 5.04 of the Plan, allocations under Section 5.04 of the Plan would
     otherwise result in a violation of Section 415 of the Code, the Committee
     shall allocate and reallocate employer contributions to other Participants
     in the Plan for the limitation year or, if such allocation and reallocation
     causes the limitations of Section 415 of the Code to be exceeded, shall
     hold excess amounts in an unallocated suspense account for allocation in a
     subsequent Plan Year in accordance with Section 1.415-6(b)(6)(i) of the
     Treasury Regulations. Such suspense account, if permitted, will be credited
     before any allocation of contributions for subsequent limitation years.

Section 5.06  Other Limitations.

Aside from the limitations set forth in Sections 5.05 of the Plan, in no event
shall more than one-third of the Employer contributions to the Plan (including
Matching Contributions) be allocated to the Accounts of Highly Compensated
Employees. In order to ensure such allocations are not made, the Committee
shall, beginning with the Participants whose Compensation exceeds the limit then
in effect under Section 401(a)(17) of the Code, reduce the amount of
Compensation of such Highly Compensated Employees on a pro-rata basis per
individual that would otherwise be taken into account for purposes of allocating
benefits under Section 5.04 of the Plan. If, in order to satisfy this Section
5.06, any such Participant's Compensation must be reduced to an amount that is
lower than the Compensation amount of the next highest paid (based on such
Participant's Compensation) Highly Compensated Employee (the "breakpoint
amount"), then, for purposes of allocating benefits under Section 5.04 of the
Plan, the Compensation of all concerned Participants shall be reduced to an
amount not to exceed such breakpoint amount.

Section 5.07  Limitations as to Certain Section 1042 Transactions.

To the extent that a shareholder of Company Stock sell qualifying Company Stock
to the Plan and elects (with the consent of the Bank) nonrecognition of gain
under Section 1042 of the Code, no portion of the Company Stock purchased in
nonrecognition transaction (or other dividends or other income attributable
thereto) may accrue or be allocated during the nonallocation period (the ten
(10) year period beginning on the later of the date of the sale of the qualified
Company Stock, or the date of the Plan allocation attributable to the final
payment of an Acquisition Loan incurred in connection with such sale) for the
benefit of:

(a)  the selling shareholder;

(b)  the spouse, brothers or sisters (whether by the whole or half blood),
     ancestors or lineal descendants of the selling shareholder or descendant
     referred to in (a) above; or

                                       17

<PAGE>

(c)  any other person who owns, after application of Section 318(a) of the Code,
     more than twenty-five percent (25%) of:

     (i)  any class of outstanding stock of the Bank or any Affiliate, or

     (ii) the total value of any class of outstanding stock of the Bank or any
          Affiliate.

     For purposes of this Section 5.07, Section 318(a) of the Code shall be
     applied without regard to the employee trust exception of Section
     318(a)(2)(B)(i) of the Code.

Section 5.08  Change in Control Provisions.

(a)  Upon a Change in Control, the Committee shall direct the Trustee to sell or
     otherwise dispose of a sufficient number of shares of Company Stock held in
     the Loan Suspense Account, and the proceeds of such sale of disposition
     shall be used to repay in full any outstanding Acquisition Loan of the
     Plan. After repayment of the Acquisition Loan, all remaining shares of
     Company Stock held in the Loan Suspense Account and any cash proceeds from
     the sale or other disposition of any shares of Company Stock held in the
     Loan Suspense shall be allocated among the Accounts of all Participants who
     were employed by an Employer immediately preceding the date on which the
     Change in Control occurs. Such allocation of shares or cash proceeds shall
     be credited as of the date on which the Change in Control occurs to the
     Accounts of each Participant who is either in active Service with an
     Employer immediately preceding the date on which the Change in Control
     occurs or is on a Recognized Absence immediately preceding the date on
     which the Change in Control occurs (each an "Affected Participant"), in
     proportion to the opening balances in their Company Stock Accounts as of
     the first day of the current Valuation Period. If any amount cannot be
     allocated to an Affected Participant's Account in the limitation year
     during which a Change in Control occurs as a result of the limitations of
     Section 415 of the Code, the amounts will be allocated in subsequent years
     to those persons who were Affected Participants and who continue to be
     Participants in the Plan until such amounts are finally allocated to
     Affected Participants.

(b)  Notwithstanding any other provision of the Plan, this Section 5.08 may not
     be amended on or after a Change in Control has occurred, unless required by
     the Internal Revenue Service as a condition of the continued treatment of
     the Plan as a tax-qualified plan under Section 401(a) of the Code.

(c)  This Section 5.08 shall have no force and effect unless the price paid for
     the Company Stock in connection with the Change in Control is greater than
     the average basis of the unallocated Company Stock held in the Loan
     Suspense Account as of the date of the Change in Control.

                                       18

<PAGE>

Section 5.09  Dividends.

(a)  Stock Dividends. Dividends on Company Stock which are received by the
     Trustee in the form of additional Company Stock shall be retained in the
     portion of the Trust Fund consisting of Company Stock, and shall be
     allocated among the Participants' Accounts and the Loan Suspense Account in
     accordance with their holdings of the Company Stock on which the dividends
     have been paid.

(b)  Cash Dividends on Allocated Shares. Dividends on Company Stock credited to
     Participants' Accounts which are received by the Trustee in the form of
     cash shall, at the direction of the Bank, either:

     (i)     be credited to Participants' Accounts in accordance with Section
             5.03 of the Plan and invested as part of the Trust Fund;

     (ii)    be distributed immediately to the Participants;

     (iii)   be distributed to the Participants within ninety (90) days of the
             close of the Plan Year in which paid; or

     (iv)    be used to repay principal and interest on the Acquisition Loan
             used to acquire Company Stock on which the dividends were paid.

In addition to the alternatives specified in the preceding paragraph regarding
the treatment of cash dividends paid with respect to shares of Company Stock
credited to Participants' Accounts, if authorized by the Committee for the Plan
Year, a Participant may elect that cash dividends paid on Company Stock credited
to the Participant's Account shall either be:

     (i)     paid to the Plan, reinvested in Company Stock and credited to the
             Participant's Account;

     (ii)    distributed in cash to the Participant; or

     (iii)   distributed to the Participant within ninety (90) days of the close
             of the Plan Year in which paid.

Dividends subject to an election under this paragraph (and any Company Stock
acquired therewith pursuant to a Participant's election) shall at all times be
fully vested. To the extent the Committee authorizes elections pursuant to this
paragraph, the Committee shall establish policies and procedures relating to
Participant elections and, if applicable, the reinvestment of cash dividends in
Company Stock, which are consistent with guidance issued under Section 404(k) of
the Code or which the Committee believes is consistent with the provisions of
Section 404(k) of the Code in the absence of any regulatory guidance.

                                       19

<PAGE>

(c)  Cash Dividends on Unallocated Shares. Dividends on Company Stock held in
     the Loan Suspense Account which are received by the Trustee in the form of
     cash shall be applied as soon as practicable to payments of principal and
     interest under the Acquisition Loan incurred with the purchase of the
     Company Stock.

(d)  Financed Shares. Financed Shares released from the Loan Suspense Account by
     reason of dividends paid with respect to such Company Stock shall be
     allocated under Sections 5.03 and 5.04 of the Plan as follows:

     (i)     First, Financed Shares with a fair market value at least equal to
             the dividends paid with respect to the Company Stock allocated to
             Participants' Accounts shall be allocated among and credited to the
             Accounts of such Participants, pro rata, according to the number of
             shares of Company Stock held in such accounts on the date such
             dividend is declared by the Company; and

     (ii)    Then, any remaining Financed Shares released from the Loan Suspense
             Account by reason of dividends paid with respect to Company Stock
             held in the Loan Suspense Account shall be allocated among and
             credited to the Accounts of all Participants, pro rata, according
             to each Participant's Compensation.

                                       20

<PAGE>

                                    SECTION 6
                             Vesting and Forfeitures

Section 6.01  Deferred Vesting in Accounts.

(d)  A Participant shall vest in his Accounts in accordance with the following
     schedule:

                     Years of Service             Vested Percentage

                     1 Year                             0%
                     2 Years                           20%
                     3 Years                           40%
                     4 Years                           60%
                     5 Years                           80%
                     6 Years                          100%

(b)  For purposes of determining a Participant's Years of Service under this
     Section 6.01, employment with the Bank or an Affiliate shall be deemed
     employment with the Employer. For purposes of determining a Participant's
     vested percentage in his Accounts, all Years of Service shall be included.

Section 6.02  Immediate Vesting in Certain Situations.

(c)  Notwithstanding Section 6.01(a) of the Plan, a Participant shall become
     fully vested in his Accounts upon the earlier of:

     (i)     termination of the Plan or upon the permanent and complete
             discontinuance of contributions by his Employer to the Plan;
             provided, however, that in the event of a partial termination, the
             interest of each Participant shall fully vest only with respect to
             that part of the Plan which is terminated;

     (ii)    the Participant's attainment of his Normal or Early Retirement Age;

     (iii)   a "Change in Control" (as defined in Section 2.01 of the Plan); or

     (iv)    termination of employment by reason of death, Disability or
             reaching his Retirement Date.

                                       21

<PAGE>

Section 6.03  Treatment of Forfeitures.

(a)  If a Participant who is not fully vested in his Accounts terminates
     employment, that portion of his Accounts in which he is not vested shall be
     forfeited upon the earlier of:

     (i)     the date the Participant receives a distribution of his entire
             vested benefits under the Plan, or

     (ii)    the date at which the Participant incurs five (5) consecutive One
             Year Periods of Severance.

(b)  If a Participant who has terminated employment and has received a
     distribution of his entire vested benefits under the Plan is subsequently
     reemployed by an Employer prior to incurring five (5) consecutive One Year
     Periods of Severance, he shall have the portion of his Accounts which was
     previously forfeited restored to his Accounts, provided he repays to the
     Trustee within five (5) years of his subsequent employment date an amount
     equal to the distribution. The amount restored to the Participant's Account
     shall be credited to his Account as of the last day of the Plan Year in
     which the Participant repays the distributed amount to the Trustee and the
     restored amount shall come from other Employees' forfeitures and, if such
     forfeitures are insufficient, from a special contribution by his Employer
     for that year. If a Participant's employment terminates prior to his
     Account having become vested, such Participant shall be deemed to have
     received a distribution of his entire vested interest as of the Valuation
     Date next following his termination of employment.

(c)  If a Participant who has terminated employment but has not received a
     distribution of his entire vested benefits under the Plan is subsequently
     reemployed by an Employer subsequent to incurring five (5) consecutive One
     Year Periods of Severance, any undistributed balance of his Accounts from
     his prior participation which was not forfeited shall be maintained as a
     fully vested subaccount with his Account.

(d)  If a portion of a Participant's Account is forfeited, assets other than
     Company Stock must be forfeited before any Company Stock may be forfeited.

(e)  Forfeitures shall be reallocated among the other Participants in the Plan.

Section 6.04  Accounting for Forfeitures.

A forfeiture shall be charged to the Participant's Account as of the first day
of the first Valuation Period in which the forfeiture becomes certain pursuant
to Section 6.03 of the Plan. Except as otherwise provided in Section 6.03 of the
Plan, a forfeiture shall be added to the contributions of the terminated
Participant's Employer which are to be credited to other Participants pursuant
to Section 4 as of the last day of the Plan Year in which the forfeiture becomes
certain.

                                       22

<PAGE>

Section 6.05  Vesting Upon Reemployment.

(a)  If an Employee is not vested in his Accounts, incurs a One Year Period of
     Severance and again performs an Hour of Service, such Employee shall
     receive credit for his Years of Service prior to his One Year Period of
     Severance only if the number of consecutive One Year Periods of Severance
     is less than the greater of: (i) five (5) years or (ii) the aggregate
     number of his Years of Service credited before his One Year Period of
     Severance.

(b)  If a Participant is partially vested in his Accounts, incurs a One Year
     Period of Severance and again performs an Hour of Service, such Participant
     shall receive credit for his Periods of Service prior to his One Year
     Period of Severance; provided, however, that after five (5) consecutive One
     Year Periods of Severance, a former Participant's vested interest in his
     Accounts attributable to Years of Service prior to his One Year Period of
     Severance shall not be increased as a result of his Years of Service
     following his reemployment date.

(c)  If a Participant is fully vested in his Accounts, incurs a One Year Period
     of Severance and again performs an Hour of Service, such Participant shall
     receive credit for all his Years of Service prior to his One Year Period of
     Severance.

                                       23

<PAGE>

                                    SECTION 7
                                  Distributions

Section 7.01  Distribution of Benefit Upon a Termination of Employment.

(a)  A Participant whose employment terminates for any reason shall receive the
     entire vested portion of his Accounts in a single payment on a date
     selected by the Committee; provided, however, that such date shall be on or
     before the 60th day after the end of the Plan Year in which the
     Participant's employment terminated. The benefits from that portion of the
     Participant's Other Investments Account shall be calculated on the basis of
     the most recent Valuation Date before the date of payment. Subject to the
     provisions of Section 7.05 of the Plan, if the Committee so provides, a
     Participant may elect that his benefits be distributed to him in the form
     of either Company Stock, cash, or some combination thereof.

(b)  Notwithstanding paragraph (a) of this Section 7.01, if the balance credited
     to a Participant's Accounts exceeds, at the time such benefit was
     distributable, $5,000, his benefits shall not be paid before the latest of
     his 65th birthday or the tenth anniversary of the year in which he
     commenced participation in the Plan, unless he elects an early payment date
     in a written election filed with the Committee. Such an election is not
     valid unless it is made after the Participant has received the required
     notice under Section 1.411(a)-11(c) of the Treasury Regulations that
     provides a general description of the material features of a lump sum
     distribution and the Participant's right to defer receipt of his benefits
     under the Plan. The notice shall be provided no less than 30 days and no
     more than 90 days before the first day on which all events have occurred
     which entitle the Participant to such benefit. Written consent of the
     Participant to the distribution generally may not be made within 30 days of
     the date the Participant receives the notice and shall not be made more
     than 90 days from the date the Participant receives the notice. However, a
     distribution may be made less than 30 days after the notice provided under
     Section 1.411(a)-11(c) of the Treasury Regulations is given, if:

     (i)  the Committee clearly informs the Participant that he has a right to a
          period of at least 30 days after receiving the notice to consider the
          decision of whether or not to elect a distribution (and if applicable,
          a particular distribution option), and

     (ii) the Participant, after receiving the notice, affirmatively elects a
          distribution.

A Participant may modify such an election at any time, provided any new benefit
payment date is at least 30 days after a modified election is delivered to the
Committee.

                                       24

<PAGE>

Section 7.02  Minimum Distribution Requirements.

With respect to all Participants, other than those who are "5% owners" (as
defined in Section 416 of the Code), benefits shall be paid no later than the
April 1st of the later of:

     (i)     the calendar year following the calendar year in which the
             Participant attains age 70-1/2, or

     (ii)    the calendar year in which the Participant retires.

With respect to all Participants who are 5% owners within the meaning of Section
416 of the Code, such Participants' benefits shall be paid no later than the
April 1st of the calendar year following the calendar year in which the
Participant attains age 70-1/2.

Section 7.03  Benefits on a Participant's Death.

(a)  If a Participant dies before his benefits are paid pursuant to Section 7.01
     of the Plan, the balance credited to his Accounts shall be paid to his
     Beneficiary in a single distribution on or before the 60th day after the
     end of the Plan Year in which the Participant died. If the Participant has
     not named a Beneficiary or his named Beneficiary should not survive him,
     then the balance in his Accounts shall be paid to his estate. The benefits
     from that portion of the Participant's Other Investments Account shall be
     calculated on the basis of the most recent Valuation Date before the date
     of payment.

(b)  If a married Participant dies before his benefit payments begin, then,
     unless he has specifically elected otherwise, the Committee shall cause the
     balance in his Accounts to be paid to his spouse, as Beneficiary. A married
     Participant may name an individual other than his spouse as Beneficiary
     provided that such election is accompanied by the spouse's written consent
     which must:

     (i)     acknowledge the effect of the election;

     (ii)    explicitly provide either that the designated Beneficiary may not
             subsequently be changed by the Participant without the spouse's
             further consent or that it may be changed without such consent; and

     (iii)   must be witnessed by the Committee, its representative, or a notary
             public.

This requirement shall not apply if the Participant establishes to the
Committee's satisfaction that the spouse may not be located.

(c)  The Committee shall from time to time take whatever steps it deems
     appropriate to keep informed of each Participant's marital status. Each
     Employer shall provide the Committee with the most reliable information in
     the Employer's possession regarding its Participants' marital status, and
     the Committee may, in its discretion, require a notarized

                                       25

<PAGE>

     affidavit from any Participant as to his marital status. The Committee, the
     Plan, the Trustee, and the Employers shall be fully protected and
     discharged from any liability to the extent of any benefit payments made as
     a result of the Committee's good faith and reasonable reliance upon
     information obtained from a Participant as to the Participant's marital
     status.

Section 7.04  Delay in Benefit Determination.

If the Committee is unable to determine the benefits payable to a Participant or
Beneficiary on or before the latest date prescribed for payment pursuant to this
Section 7, the benefits shall in any event be paid within 60 days after they can
first be determined, with whatever makeup payments may be appropriate in view of
the delay.

Section 7.05  Options to Receive and Sell Stock.

(a)  Unless ownership of virtually all Company Stock is restricted to active
     Employees and qualified retirement plans for the benefit of Employees
     pursuant to the certificates of incorporation or by-laws of the Employers
     issuing Company Stock, a terminated Participant or the Beneficiary of a
     deceased Participant may instruct the Committee to distribute the
     Participant's entire vested interest in his Accounts in the form of Company
     Stock. In that event, the Committee shall apply the Participant's vested
     interest in his Other Investments Account to purchase sufficient Company
     Stock to make the required distribution.

(b)  Any Participant who receives Company Stock pursuant to this Section 7.05,
     and any person who has received Company Stock from the Plan or from such a
     Participant by reason of the Participant's death or incompetency, by reason
     of divorce or separation from the Participant, or by reason of a rollover
     distribution described in Section 402(c) of the Code, shall have the right
     to require the Employer which issued the Company Stock to purchase the
     Company Stock for its current fair market value (hereinafter referred to as
     the "put right"). The put right shall be exercisable by written notice to
     the Committee during the first 60 days after the Company Stock is
     distributed by the Plan, and, if not exercised in that period, during the
     first 60 days in the following Plan Year after the Committee has
     communicated to the Participant its determination as to the Company Stock's
     current fair market value. If the put right is exercised, the Trustee may,
     if so directed by the Committee in its sole discretion, assume the
     Employer's rights and obligations with respect to purchasing the Stock.
     However, the put right shall not apply to the extent that the Company
     Stock, at the time the put right would otherwise be exercisable, may be
     sold on an established market in accordance with federal and state
     securities laws and regulations.

(c)  With respect to a put right, the Employer or the Trustee, as the case may
     be, may elect to pay for the Company Stock in equal periodic installments,
     not less frequently than annually, over a period not longer than five (5)
     years from the 30th day after the put right is exercised pursuant to
     paragraph (b) of this Section 7.05, with adequate security and

                                       26

<PAGE>

     interest at a reasonable rate on the unpaid balance, all such terms to be
     set forth in a promissory note delivered to the seller with normal terms as
     to acceleration upon any uncured default.

(d)  Nothing contained in this Section 7.05 shall be deemed to obligate any
     Employer to register any Company Stock under any federal or state
     securities law or to create or maintain a public market to facilitate the
     transfer or disposition of any Company Stock. The put right described in
     this Section 7.05 may only be exercised by a person described in the
     paragraph (b) of this Section 7.05, and may not be transferred with any
     Company Stock to any other person. As to all Company Stock purchased by the
     Plan in exchange for any Acquisition Loan, the put right must be
     nonterminable. The put right for Company Stock acquired through an
     Acquisition Loan shall continue with respect to such Company Stock after
     the Acquisition Loan is repaid or the Plan ceases to be an employee stock
     ownership plan. Except as provided above, in accordance with the provisions
     of Sections 54.4975-7(b)(4) of the Treasury Regulations, no Company Stock
     acquired with the proceeds of an Acquisition Loan may be subject to any
     put, call or other option or buy-sell or similar arrangement while held by,
     and when distributed from, the Plan, whether the Plan is then an employee
     stock ownership plan.

Section 7.06  Restrictions on Disposition of Stock.

Except in the case of Company Stock which is traded on an established market, a
Participant who receives Company Stock pursuant to this Section 7, and any
person who has received Company Stock from the Plan or from such a Participant
by reason of the Participant's death or incompetency, by reason of divorce or
separation from the Participant, or by reason of a rollover distribution
described in Section 402(c) of the Code, shall, prior to any sale or other
transfer of the Company Stock to any other person, first offer the Company Stock
to the issuing Employer and to the Plan at its current fair market value. This
restriction shall apply to any transfer, whether voluntary, involuntary, or by
operation of law, and whether for consideration or gratuitous. Either the
Employer or the Trustee may accept the offer within 14 days after it is
delivered. Any Company Stock distributed by the Plan shall bear a conspicuous
legend describing the right of first refusal under this Section 7.06, as
applicable, as well as any other restrictions upon the transfer of the Company
Stock imposed by federal and state securities laws and regulations.

Section 7.07  Direct Transfer of Eligible Plan Distributions.

(a)  Notwithstanding any provision of the Plan to the contrary that would
     otherwise limit a distributee's election under this Section, a distributee
     (as defined below) may elect to have any portion of an eligible rollover
     distribution (as defined below) paid directly to an eligible retirement
     plan (as defined below) specified by the distributee in a direct rollover
     (as defined below). A "distributee" includes a Participant or former
     Participant. In addition, the Participant's or former Participant's
     surviving spouse and the Participant's or former Participant's spouse or
     former spouse who is the alternate payee under a qualified domestic
     relations order, as defined in Section 414(p) of the Code, are

                                       27

<PAGE>

     distributees with regard to the interest of the spouse or former spouse.
     For purposes of this Section 7.07 a "direct rollover" is a payment by the
     Plan to the eligible retirement plan specified by the distributee.

(b)  To effect such a direct transfer, the distributee must notify the Committee
     that a direct transfer is desired and provide to the Committee the eligible
     retirement plan to which the payment is to be made. Such notice shall be
     made in such form and at such time as the Committee may prescribe. Upon
     receipt of such notice, the Committee shall direct the Trustee to make a
     trustee-to-trustee transfer of the eligible rollover distribution to the
     eligible retirement plan so specified.

(c)  For purposes of this Section 7.07, an "eligible rollover distribution"
     shall have the meaning set forth in Section 402(c)(4) of the Code and any
     Treasury Regulations promulgated thereunder. To the extent such meaning is
     not inconsistent with the above references, an eligible rollover
     distribution shall mean any distribution of all or any portion of the
     Participant's Account, except that such term shall not include any
     distribution which is one of a series of substantially equal periodic
     payments (not less frequently than annually) made (i) for the life (or life
     expectancy) of the Participant or the joint lives (or joint life
     expectancies) of the Participant and a designated Beneficiary, or (ii) for
     a period of ten years or more. Further, the term "eligible rollover
     distribution" shall not include any distribution required to be made under
     Section 401(a)(9) of the Code or, the portion of any distribution that is
     not includible in gross income (determined without regard to the exclusions
     for net unrealized appreciation with respect to Company Stock). To the
     extent applicable under the Plan, "eligible rollover distributions shall
     also not include any hardship distribution described in Section
     401(k)(2)(B)(i)(IV) of the Code.

(d)  For purposes of this Section 7.07, "an "eligible retirement plan" shall
     have the meaning set forth in Section 402(c)(8) of the Code and any
     Treasury Regulations promulgated thereunder. To the extent such meaning is
     not consistent with the above references, an eligible retirement plan shall
     mean: (i) an individual retirement account described in Section 408(a) of
     the Code, (ii) an individual retirement annuity described in Section 408(b)
     of the Code, (iii) an annuity plan described in Section 403(a) of the Code,
     or (iv) a qualified trust described in Section 401(a) of the Code that
     accepts the distributee's eligible rollover distribution. However, in the
     case of an eligible rollover distribution to the surviving spouse, an
     eligible retirement plan is an individual retirement account or individual
     retirement annuity.

                                       28

<PAGE>


                                    SECTION 8
                    Voting of Company Stock and Tender Offers

Section 8.01  Voting of Company Stock.

(a)  In General. The Trustee shall generally vote all shares of Company Stock
     held in the Trust in accordance with the provisions of this Section 8.01.

(b)  Allocated Shares. Shares of Company Stock which have been allocated to
     Participants' Accounts shall be voted by the Trustee in accordance with the
     Participants' written instructions.

(c)  Uninstructed and Unallocated Shares. Shares of Company Stock which have
     been allocated to Participants' Accounts but for which no written
     instructions have been received by the Trustee regarding voting shall be
     voted by the Trustee in a manner calculated to most accurately reflect the
     instructions the Trustee has received from Participants regarding voting
     shares of allocated Company Stock. Shares of unallocated Company Stock
     shall also be voted by the Trustee in a manner calculated to most
     accurately reflect the instructions the Trustee has received from
     Participants regarding voting shares of allocated Company Stock.
     Notwithstanding the preceding two sentences, all shares of Company Stock
     which have been allocated to Participants' Accounts and for which the
     Trustee has not timely received written instructions regarding voting and
     all unallocated shares of Company Stock must be voted by the Trustee in a
     manner determined by the Trustee to be solely in the best interests of the
     Participants and Beneficiaries.

(d)  Voting Prior to Allocation. In the event no shares of Company Stock have
     been allocated to Participants' Accounts at the time Company Stock is to be
     voted, each Participant shall be deemed to have one share of Company Stock
     allocated to his Accounts for the sole purpose of providing the Trustee
     with voting instructions.

(e)  Procedure and Confidentiality. Whenever such voting rights are to be
     exercised, the Employers, the Committee, and the Trustee shall see that all
     Participants and Beneficiaries are provided with the same notices and other
     materials as are provided to other holders of the Company Stock, and are
     provided with adequate opportunity to deliver their instructions to the
     Trustee regarding the voting of Company Stock allocated to their Accounts
     or deemed allocated to their Accounts for purposes of voting. The
     instructions of the Participants with respect to the voting of shares of
     Company Stock shall be confidential.

Section 8.02  Tender Offers.

In the event of a tender offer, Company Stock shall be tendered by the Trustee
in the same manner set forth in Section 8.01 of the Plan regarding the voting of
Company Stock.

                                       29

<PAGE>

                                    SECTION 9
                      The Committee and Plan Administration

Section 9.01  Identity of the Committee.

The Committee shall consist of three or more individuals selected by the Bank.
Any individual, including a director, trustee, shareholder, officer, or Employee
of an Employer, shall be eligible to serve as a member of the Committee. The
Bank shall have the power to remove any individual serving on the Committee at
any time without cause upon ten (10) days' written notice to such individual and
any individual may resign from the Committee at any time without reason upon ten
(10) days' written notice to the Bank. The Bank shall notify the Trustee of any
change in membership of the Committee.

Section 9.02  Authority of Committee.

(a)  The Committee shall be the "plan administrator" within the meaning of ERISA
     and shall have exclusive responsibility and authority to control and manage
     the operation and administration of the Plan, including the interpretation
     and application of its provisions, except to the extent such responsibility
     and authority are otherwise specifically:

     (i)      allocated to the Bank, the Employers, or the Trustee under the
              Plan and Trust Agreement;

     (ii)     delegated in writing to other persons by the Bank, the Employers,
              the Committee, or the Trustee; or

     (iii)    allocated to other parties by operation of law.

(b)  The Committee shall have exclusive responsibility regarding decisions
     concerning the payment of benefits under the Plan.

(c)  The Committee shall have full investment responsibility with respect to the
     Investment Fund except to the extent, if any, specifically provided in the
     Trust Agreement.

(d)  In the discharge of its duties, the Committee may employ accountants,
     actuaries, legal counsel, and other agents (who also may be employed by an
     Employer or the Trustee in the same or some other capacity) and may pay
     such individuals reasonable compensation and expenses for their services
     rendered with respect to the operation or administration of the Plan to the
     extent such payments are not otherwise prohibited by law.

Section 9.03  Duties of Committee.

(a)  The Committee shall keep whatever records may be necessary in connection
     with the maintenance of the Plan and shall furnish to the Employers
     whatever reports may be required from time to time by the Employers. The
     Committee shall furnish to the Trustee

                                       30

<PAGE>

     whatever information may be necessary to properly administer the Trust. The
     Committee shall see to the filing with the appropriate government agencies
     of all reports and returns required with respect to the Plan under ERISA
     and the Code and other applicable laws.

(b)  The Committee shall have exclusive responsibility and authority with
     respect to the Plan's holdings of Company Stock and shall direct the
     Trustee in all respects regarding the purchase, retention, sale, exchange,
     and pledge of Company Stock and the creation and satisfaction of any
     Acquisition Loan to the extent such responsibilities are not set forth in
     the Trust Agreement.

(c)  The Committee shall at all times act consistently with the Bank's long-term
     intention that the Plan, as an employee stock ownership plan, be invested
     primarily in Company Stock. Subject to the direction of the Committee with
     respect to any Acquisition Loan pursuant to the provisions of Section 4.03
     of the Plan, and subject to the provisions of Sections 7.05 and 11.04 of
     the Plan as to Participants' rights under certain circumstances to have
     their Accounts invested in Company Stock or in assets other than Company
     Stock, the Committee shall determine, in its sole discretion, the extent to
     which assets of the Trust shall be used to repay any Acquisition Loan, to
     purchase Company Stock, or to invest in other assets selected by the
     Committee or an investment manager. No provision of the Plan relating to
     the allocation or vesting of any interests in the Company Stock or
     investments other than Company Stock shall restrict the Committee from
     changing any holdings of the Trust Fund, whether the changes involve an
     increase or a decrease in the Company Stock or other assets credited to
     Participants' Accounts. In determining the proper extent of the Trust
     Fund's investment in Company Stock, the Committee shall be authorized to
     employ investment counsel, legal counsel, appraisers, and other agents and
     to pay their reasonable compensation and expenses to the extent such
     payments are not prohibited by law.

(d)  If the valuation of any Company Stock is not established by reported
     trading on a generally recognized public market, then the Committee shall
     have the exclusive authority and responsibility to determine value of the
     Company Stock for all purposes under the Plan. Such value shall be
     determined as of each Valuation Date and on any other date as of which the
     Trustee purchases or sells Company Stock in a manner consistent with
     Section 4975 of the Code and the Treasury Regulations thereunder. The
     Committee shall use generally accepted methods of valuing stock of similar
     corporations for purposes of arm's length business and investment
     transactions, and in this connection the Committee shall obtain, and shall
     be protected in relying upon, the valuation of Company Stock as determined
     by an independent appraiser (as defined in Section 401(a)(28)(c) of the
     Code).

                                       31

<PAGE>

Section 9.04  Compliance with ERISA and the Code.

The Committee shall perform all acts necessary to ensure the Plan's compliance
with ERISA and the Code. Each individual member of the Committee shall discharge
his duties in good faith and in accordance with the applicable requirements of
ERISA and the Code.

Section 9.05  Action by Committee.

All actions of the Committee shall be governed by the affirmative vote of a
number of the members of the Committee which is a majority of the total number
of the members of the Committee. The members of the Committee may meet
informally and may take any action without meeting as a group.

Section 9.06  Execution of Documents.

Any instrument executed by the Committee may be signed by any member of the
Committee.

Section 9.07  Adoption of Rules.

The Committee shall adopt such rules and regulations of uniform applicability as
it deems necessary or appropriate for the proper operation, administration and
interpretation of the Plan.

Section 9.08  Responsibilities to Participants.

The Committee shall determine which Employees qualify to participate in the
Plan. The Committee shall furnish to each Eligible Employee whatever summary
plan descriptions, summary annual reports, and other notices and information
which may be required under ERISA. The Committee also shall determine when a
Participant or his Beneficiary qualifies for the payment of benefits under the
Plan. The Committee shall furnish to each such Participant or Beneficiary
whatever information is required under ERISA or the Code (or is otherwise
appropriate) to enable the Participant or Beneficiary to make whatever elections
may be available pursuant to Section 7, and the Committee shall provide for the
payment of benefits in the proper form and amount from the Trust. The Committee
may decide in its sole discretion to permit modifications of elections and to
defer or accelerate benefits to the extent consistent with the terms of the
Plan, applicable law, and the best interests of the individuals concerned.

Section 9.09  Alternative Payees in Event of Incapacity.

If the Committee finds at any time that an individual qualifying for benefits
under this Plan is a minor or is incompetent, the Committee may direct the
benefits to be paid, in the case of a minor, to his parents, his legal guardian,
a custodian for him under the Uniform Transfers to Minors Act, or the person
having actual custody of him, or, in the case of an incompetent, to his spouse,
his legal guardian, or the person having actual custody of him. The Committee
and the Trustee shall not be obligated to inquire as to the actual use of the
funds by the person receiving them under

                                       32

<PAGE>

this Section 9.09, and any such payment shall completely discharge the
obligations of the Plan, the Trustee, the Committee, and the Employers to the
extent of the payment.

Section 9.10  Indemnification by Employers.

Except as separately agreed in writing, the Committee, and any member or
employee of the Committee, shall be indemnified and held harmless by the
Employers, jointly and severally, to the fullest extent permitted by law against
any and all costs, damages, expenses, and liabilities reasonably incurred by or
imposed upon the Committee or such individual in connection with any claim made
against the Committee or such individual or in which the Committee or such
individual may be involved by reason of being, or having been, the Committee, or
a member or employee of the Committee, to the extent such amounts are not paid
by insurance.

Section 9.11  Abstention by Interested Member.

Any member of the Committee who also is a Participant in the Plan shall take no
part in any determination specifically relating to his own participation or
benefits under the Plan, unless his abstention would render the Committee
incapable of acting on the matter.

                                       33

<PAGE>

                                   SECTION 10
                         Rules Governing Benefit Claims

Section 10.01  Claim for Benefits.

Any Participant or Beneficiary who qualifies for the payment of benefits shall
file a claim for his benefits with the Committee on a form provided by the
Committee. The claim, including any election of an alternative benefit form,
shall be filed at least 30 days before the date on which the benefits are to
begin. If a Participant or Beneficiary fails to file a claim by the 30th day
before the date on which benefits become payable, he shall be presumed to have
filed a claim for payment for the Participant's benefits in the standard form
prescribed by Section 7 of the Plan.

Section 10.02  Notification by Committee.

Within 90 days after receiving a claim for benefits (or within 180 days, if
special circumstances require an extension of time and written notice of the
extension is given to the Participant or Beneficiary within 90 days after
receiving the claim for benefits), the Committee shall notify the Participant or
Beneficiary whether the claim has been approved or denied. If the Committee
denies a claim in any respect, the Committee shall set forth in a written notice
to the Participant or Beneficiary:

(a)  each specific reason for the denial;

(b)  specific references to the pertinent Plan provisions on which the denial is
     based;

(c)  a description of any additional material or information which could be
     submitted by the Participant or Beneficiary to support his claim, with an
     explanation of the relevance of such information; and

(d)  an explanation of the claims review procedures set forth in Section 10.03
     of the Plan.

Section 10.03  Claims Review Procedure.

Within 60 days after a Participant or Beneficiary receives notice from the
Committee that his claim for benefits has been denied in
any respect, he may file with the Committee a written notice of appeal setting
forth his reasons for disputing the Committee's determination. In connection
with his appeal, the Participant or Beneficiary or his representative may
inspect or purchase copies of pertinent documents and records to the extent not
inconsistent with other Participants' and Beneficiaries' rights of privacy.
Within 60 days after receiving a notice of appeal from a prior determination (or
within 120 days, if special circumstances require an extension of time and
written notice of the extension is given to the Participant or Beneficiary and
his representative within 60 days after receiving the notice of appeal), the
Committee shall furnish to the Participant or Beneficiary and his
representative, if any, a written statement of the Committee's final decision
with respect to his claim, including the reasons for such decision and the
particular Plan provisions upon which it is based.

                                       34

<PAGE>

                                   SECTION 11
                                    The Trust

Section 11.01  Creation of Trust Fund.

All amounts received under the Plan from an Employer and investments shall be
held in a Trust Fund pursuant to the terms of this Plan and the Trust Agreement.
The benefits described in this Plan shall be payable only from the assets of the
Trust Fund. Neither the Bank, any other Employer, its board of directors or
trustees, its stockholders, its officers, its employees, the Committee, nor the
Trustee shall be liable for payment of any benefit under this Plan except from
the Trust Fund.

Section 11.02  Company Stock and Other Investments.

The Trust Fund held by the Trustee shall be divided into Company Stock and
investments other than Company Stock. The Trustee shall have no investment
responsibility for the portion of the Trust Fund consisting of Company Stock,
but shall accept any Employer contributions made in the form of Company Stock,
and shall acquire, sell, exchange, distribute, and otherwise deal with and
dispose of Company Stock in accordance with the instructions of the Committee.

Section 11.03  Acquisition of Company Stock.

From time to time the Committee may, in its sole discretion, direct the Trustee
to acquire Company Stock from the issuing Employer or from shareholders,
including shareholders who are or have been Employees, Participants, or
fiduciaries with respect to the Plan. The Trustee shall pay for such Company
Stock no more than its fair market value, which shall be determined conclusively
by the Committee pursuant to Section 9.03(d) of the Plan. The Committee may
direct the Trustee to finance the acquisition of Company Stock through an
Acquisition Loan subject to the provisions of Section 4.03 of the Plan.

Section 11.04  Participants' Option to Diversify.

The Committee shall provide for a procedure under which each Participant may,
during the first five years of a certain six-year period, elect to have up to 25
percent of the value of his Accounts committed to alternative investment options
within an "Investment Fund." For the sixth year in this period, the Participant
may elect to have up to 50 percent of the value of his Accounts committed to
other investments. The six-year period shall begin with the Plan Year following
the first Plan Year in which the Participant has both reached age 55 and
completed 10 years of participation in the Plan; a Participant's election to
diversify his Accounts must be made within the 90-day period immediately
following the last day of each of the six Plan Years. The Committee shall see
that the Investment Fund includes a sufficient number of investment options to
comply with Section 401(a)(28)(B) of the Code. The Committee may, in its
discretion, permit a transfer of a portion of the Participant's Accounts to the
Savings Plan in order to satisfy this Section 11.04, provided such investments
comply with Section 401(a)(28)(B) of the Code and such transfer is not otherwise
prohibited under the Code or ERISA. The Trustee shall comply

                                       35

<PAGE>

with any investment directions received from Participants in accordance with the
procedures adopted from time to time by the Committee under this Section 11.04.

                                       36

<PAGE>

                                   SECTION 12
                       Adoption, Amendment and Termination

Section 12.01  Adoption of Plan by Other Employers.

With the consent of the Bank, any entity may become a participating Employer
under the Plan by:

(a)  taking such action as shall be necessary to adopt the Plan;

(b)  becoming a party to the Trust Agreement establishing the Trust Fund; and

(c)  executing and delivering such instruments and taking such other action as
     may be necessary or desirable to put the Plan into effect with respect to
     the entity's Employees.

Section 12.02  Adoption of Plan by Successor.

In the event that any Employer shall be reorganized by way of merger,
consolidation, transfer of assets or otherwise, so that an entity other than an
Employer shall succeed to all or substantially all of the Employer's business,
the successor entity may be substituted for the Employer under the Plan by
adopting the Plan and becoming a party to the Trust Agreement. Contributions by
the Employer shall be automatically suspended from the effective date of any
such reorganization until the date upon which the substitution of the successor
entity for the Employer under the Plan becomes effective. If, within 90 days
following the effective date of any such reorganization, the successor entity
shall not have elected to become a party to the Plan, or if the Employer shall
adopt a plan of complete liquidation other than in connection with a
reorganization, the Plan shall be automatically terminated with respect to
Employees of the Employer as of the close of business on the 90th day following
the effective date of the reorganization, or as of the close of business on the
date of adoption of a plan of complete liquidation, as the case may be.

Section 12.03  Plan Adoption Subject to Qualification.

Notwithstanding any other provision of the Plan, the adoption of the Plan and
the execution of the Trust Agreement are conditioned upon their being determined
initially by the Internal Revenue Service to meet the qualification requirements
of Section 401(a) of the Code, so that the Employers may deduct currently for
federal income tax purposes their contributions to the Trust and so that the
Participants may exclude the contributions from their gross income and recognize
income only when they receive benefits. In the event that this Plan is held by
the Internal Revenue Service not to qualify initially under Section 401(a) of
the Code, the Plan may be amended retroactively to the earliest date permitted
by the Code and the applicable Treasury Regulations in order to secure
qualification under Section 401(a) of the Code. If this Plan is held by the
Internal Revenue Service not to qualify initially under Section 401(a) of the
Code either as originally adopted or as amended, each Employer's contributions
to the Trust under this Plan (including any earnings thereon) shall be returned
to it and this Plan shall be terminated. In the event that this Plan is amended
after its initial qualification and the Plan as amended is held by the Internal
Revenue Service not to qualify under Section 401(a) of the Code, the amendment

                                       37

<PAGE>

may be modified retroactively to the earliest date permitted by the Code and the
applicable Treasury Regulations in order to secure approval of the amendment
under Section 401(a) of the Code.

Section 12.04  Right to Amend or Terminate.

The Bank intends to continue this Plan as a permanent program. However, each
participating Employer separately reserves the right to suspend, supersede, or
terminate the Plan at any time and for any reason, as it applies to that
Employer's Employees, and the Bank reserves the right to amend, suspend,
supersede, merge, consolidate, or terminate the Plan at any time and for any
reason, as it applies to the Employees of all Employers. No amendment,
suspension, supersession, merger, consolidation, or termination of the Plan
shall reduce any Participant's or Beneficiary's proportionate interest in the
Trust Fund, or shall divert any portion of the Trust Fund to purposes other than
the exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan. Except as is required for
purposes of compliance with the Code or ERISA, the provisions of Section 4.04
relating to the crediting of contributions, forfeitures and shares of Company
Stock released from the Loan Suspense Account, nor any other provision of the
Plan relating to the allocation of benefits to Participants, may be amended more
frequently than once every six months. Moreover, there shall not be any transfer
of assets to a successor plan or merger or consolidation with another plan
unless, in the event of the termination of the successor plan or the surviving
plan immediately following such transfer, merger, or consolidation, each
participant or beneficiary would be entitled to a benefit equal to or greater
than the benefit he would have been entitled to if the plan in which he was
previously a participant or beneficiary had terminated immediately prior to such
transfer, merger, or consolidation. Following a termination of this Plan by the
Bank, the Trustee shall continue to administer the Trust and pay benefits in
accordance with the Plan and the Committee's instructions.

                                       38

<PAGE>

                                   SECTION 13
                               General Provisions

Section 13.01   Nonassignability of Benefits.

The interests of Participants and other persons entitled to benefits under the
Plan shall not be subject to the claims of their creditors and may not be
voluntarily or involuntarily assigned, alienated, pledged, encumbered, sold, or
transferred. The prohibitions set forth in this Section 13.01 shall also apply
any judgement, decree, or order (including approval of a property or settlement
agreement) which relates to the provision of child support, alimony, or property
rights to a present or former spouse, child, or other dependent of a Participant
pursuant to a domestic relations order, unless such judgement, decree or order
is determined to be a "qualified domestic relations order" as defined in Section
414(p) of the Code.

Section 13.02   Limit of Employer Liability.

The liability of the Employers with respect to Participants and other persons
entitled to benefits under the Plan shall be limited to making contributions to
the Trust from time to time, in accordance with Section 4 of the Plan.

Section 13.03   Plan Expenses.

All expenses incurred by the Committee or the Trustee in connection with
administering the Plan and Trust shall be paid by the Trustee from the Trust
Fund to the extent the expenses have not been paid or assumed by the Employer.

Section 13.04   Nondiversion of Assets.

Except as provided in Sections 5.05 and 12.03 of the Plan, under no
circumstances shall any portion of the Trust Fund be diverted to or used for any
purpose other than the exclusive benefit of the Participants and their
Beneficiaries prior to the satisfaction of all liabilities under the Plan.

Section 13.05   Separability of Provisions.

If any provision of the Plan is held to be invalid or unenforceable, the other
provisions of the Plan shall not be affected but shall be applied as if the
invalid or unenforceable provision had not been included in the Plan.

Section 13.06   Service of Process.

The agent for the service of process upon the Plan shall be the president of the
Bank and the Trustee, or such other person as may be designated from time to
time by the Bank.

                                       39

<PAGE>

Section 13.07   Governing Law.

The Plan is established under, and its validity, construction and effect shall
be governed by the laws of the State of Connecticut to the extent those laws are
not preempted by federal law, including the provisions of ERISA.

Section 13.08   Special Rules for Persons Subject to Section 16(b) Requirements.

Notwithstanding anything herein to the contrary, any former Participant who is
subject to the provisions of Section 16(b) of the Securities Exchange Act of
1934, who becomes eligible to again participate in the Plan, may not become a
Participant prior to the date that is six months from the date such former
Participant terminated participation in the Plan. In addition, any person
subject to the provisions of Section 16(b) of the 1934 Act receiving a
distribution of Company Stock from the Plan must hold such Company Stock for a
period of six months commencing with the date of distribution. However, this
restriction will not apply to Company Stock distributions made in connection
with death, retirement, disability or termination of employment, or made
pursuant to the terms of a qualified domestic relations order.

Section 13.09   Military Service.

Notwithstanding any other provision of this Plan to the contrary, contributions,
benefits and Service credit with respect to qualified military service will be
provided in accordance with Section 414(u) of the Code.

                                       40

<PAGE>

                                   SECTION 14
                              Top-Heavy Provisions

Section 14.01   Top-Heavy Provisions.

If, as of the last day of the first Plan Year, or thereafter, if as of the day
next preceding the beginning of any Plan Year (the "Determination Date"), the
Plan is a "top-heavy plan" (determined in accordance with the provisions of
Section 416(g) of the Code); that is, the aggregate present value of the accrued
benefits and account balances of all "Key Employees" (within the meaning of
Section 416(i) of the Code, and for this purpose using the definition of
Compensation, as modified under Section 5.05(b) of the Plan) and their
Beneficiaries, exceeds sixty percent (60%) of the aggregate present value of the
accrued benefits and account balances of all employees and their beneficiaries,
the provision specified in this Section 14 will automatically become effective
as of the first day of the Plan Year. For purposes of the above sentence, the
aggregate present value of the accrued benefits and account balances of a
Participant who has not performed any services for the Bank or any of its
Affiliates during the five-year period ending on the Determination Date shall
not be taken into account. This calculation shall be made in accordance with
Section 416(g) of the Code, taking into consideration plans which are considered
part of the Aggregation Group. The term "Aggregation Group" shall include each
plan of the Bank or any of its Affiliates that includes a Key Employee and each
plan of the Bank or any of its Affiliates that allows the Plan to meet the
requirements of Section 401(a)(4) of the Code or Section 410 of the Code and may
include any other plan of the Bank or any of its Affiliates, if the Aggregation
Group would continue to meet the requirements of Sections 401(a)(4) and 410 of
the Code. For Plan Years beginning after December 31, 2002, the present values
of accrued benefits and the amounts of Account balances of a Participant as of
the Determination Date shall be increased by the distributions made with respect
to the Participant under the Plan and any Plan aggregated with the Plan under
Section 416(g)(2) of the Code during the one-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 "five-year period"
for "one-year period."

Section 14.02   Plan Modifications Upon Becoming Top-Heavy.

(a)  Minimum Accruals. Section 5.04 of the Plan will be modified to provide that
     the aggregate amount of Employer contributions allocated in each Plan Year
     to the Accounts of each Participant who is a Non-Key Employee (within the
     meaning of Section 416(i)(1) of the Code), and who is employed by an
     Employer as of the last day of the Plan Year, may not be less than the
     lesser of:

     (i)     three percent of his Compensation for the Plan Year; and

     (ii)    a percentage of his Compensation equal to the largest percentage
             obtained by dividing the sum of the amount credited to the Accounts
             of any Key Employee by that Key Employee's Compensation

                                       41

<PAGE>

If a Participant's vested interest in his Accounts is to be determined in a year
during which the Plan is a top-heavy plan, then it shall be based on the
following schedule:

                  Years of Service                   Vested Percentage

                  Fewer than 3 years                          0%
                  3 or more years                           100%

The preceding provisions will remain in effect for the period in which the Plan
is top-heavy. If, for any particular year thereafter, the Plan is no longer
top-heavy, the provisions contained in this Section 14.02 shall cease to apply,
except that any previously vested portion of any Account balance shall remain
nonforfeitable.

                                       42

<PAGE>

                                 TRUST AGREEMENT

                                     BETWEEN

                             JEFFERSON FEDERAL BANK

                                       AND
                        _______________________________

                                     FOR THE

                             JEFFERSON FEDERAL BANK
                       EMPLOYEE STOCK OWNERSHIP PLAN TRUST

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
                                                                      Page No.
<S>                                                                   <C>
Section 1    Creation of Trust                                                1

Section 2    Investment of Trust Fund and
             Administrative Powers of the Trustee                             2

Section 3    Compensation and Indemnification
             of Trustee and Payment of Expenses
             and Taxes                                                        7

Section 4    Records and Valuation                                            9

Section 5    Instructions from Committee                                     10

Section 6    Change of Trustee                                               11

Section 7    Miscellaneous                                                   11
</TABLE>

                                        2

<PAGE>

         This TRUST AGREEMENT dated___________, 2003 BETWEEN Jefferson Federal
Bank, with its administrative office at 120 Evans Avenue, Morristown, Tennessee
(hereinafter called the "Company"), and ____________________________

                          W I T N E S S E T H  T H A T:

         WHEREAS, the Company has approved and adopted an employee stock
ownership plan for the benefit of its employees, the Jefferson Federal Bank
Employee Stock Ownership Plan of Morristown, (hereinafter called the "Plan");
and

         WHEREAS, the Company has authorized the execution of this Trust
Agreement and has appointed_______________________ as Trustee of the Trust Fund
created pursuant to the Plan; and

         WHEREAS,______________________________ has agreed to act as Trustee and
to hold and administer the assets of the Plan in accordance with the terms of
this Trust Agreement.

         NOW, THEREFORE, the Company and the Trustee agree as follows:

         Section 1. Creation of Trust.

         1.1 Trustee._____________________ shall serve as Trustee of the Trust
Fund created in accordance with and in furtherance of the Plan, and shall serve
as Trustee until their removal or resignation in accordance with Section 6.

         1.2 Trust Fund. The Trustee hereby agrees to accept contributions from
the Employer as defined in the Plan and amounts transferred from other qualified
retirement plans from time to time in accordance with the terms of the Plan. All
such property and contributions, together with income thereon and increments
thereto, shall constitute the "Trust Fund" to be held in accordance with the
terms of the Trust Agreement.

         1.3 Incorporation of Plan. An instrument entitled "Jefferson Federal
Bank Employee Stock Ownership Plan" is incorporated herein by reference, and
this Trust Agreement shall be interpreted consistently with that Plan. All words
and phrases defined in that Plan shall have the same meaning when used in this
Trust Agreement.

         1.4 Name. The name of this trust shall be " Jefferson Federal Bank
Employee Stock Ownership Plan Trust."

         1.5 Nondiversion of Assets. In no event shall any part of the corpus or
income of the Trust Fund be used for, or diverted to, purposes other than for
the exclusive benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities under the Plan, except to the extent that assets
may be returned to the Employer in accordance with the Plan where the Plan fails
to qualify initially under Section 401(a) of the Internal Revenue Code (the
"Code"), or

<PAGE>

where they are attributable to contributions made by mistake of fact or in
excess of the deductibility allowed under the Code.

         Section 2. Investment of Trust Fund and Administrative Powers of the
Trustee.

         2.1 Stock and Other Investments. The basic investment policy of the
Plan shall be to invest primarily in Stock of the Employer for the exclusive
benefit of the Participants and their Beneficiaries. The Committee shall have
full and complete investment authority and responsibility with respect to the
purchase, retention, sale, exchange, and pledge of Stock and the payment of
Stock Obligations, and the Trustee shall not deal in any way with Stock except
in accordance with their obligations pursuant to this Trust Agreement and the
written instructions of the Committee. The Trustee shall invest, or keep
invested, all or a portion of the Trust Fund in Stock, and shall pay Stock
Obligations out of assets of the Trust Fund, as instructed from time to time by
the Committee. The Trustee shall invest any balance of the Trust Fund (the
"Investment Fund") in such other property as the Committee, in its sole
discretion, shall deem advisable, subject to any delegation of such investment
responsibility pursuant to Section 2.2. Nothing contained herein shall provide
investment discretion authority or any like kind responsibility in regard to the
assets of the Trust Fund.

         In connection with instructions to acquire Stock, the Trustee may
purchase newly issued or outstanding Stock from the Employer or any other
holders of Stock, including Participants, Beneficiaries, and Plan fiduciaries.
All purchases and sales of Stock shall be made by the Trustee at fair market
value as determined by the Committee in good faith and in accordance with any
applicable requirements under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). Such purchases may be made with assets of the Trust
Fund, with funds borrowed for this purpose (with or without guarantees of
repayment to the lender by the Employer), or by any combination of the
foregoing.

         Notwithstanding any other provision of this Trust Agreement or the
Plan, neither the Committee nor Trustee shall make any purchase, sale, exchange,
investment, pledge, valuation, or loan, or take any other action involving those
assets for which they are responsible which (i) is inconsistent with the policy
of the Plan and Trust, (ii) is inconsistent with the prudence and
diversification requirements set forth in Sections 404(a)(1)(B) and (C) of ERISA
(to the extent such requirements apply to an employee stock ownership plan and
trust), (iii) is prohibited by Section 406 or 407 of ERISA, or (iv) would impair
the qualification of the Plan or the exemption of the Trust under Sections 401
and 501, respectively, of the Code.

         2.2 Delegation of Investment Responsibility. The Committee may, by
written notice and in accordance with the Plan, direct the Trustee to segregate
any portion or all of the Investment Fund into one or more separate accounts for
each of which full investment responsibility will be delegated to an investment
manager appointed in such notice pursuant to Section 402(c)(3) of ERISA
(hereinafter a "Manager"). For any separate account where the Trustee is to
maintain custody of the assets, the Trustee and the Manager shall agree upon
procedures for the transmittal

                                       2

<PAGE>

of investment instructions from the Manager to the Trustee, and the Trustee may
provide the Manager with such documents as may be necessary to authorize the
Manager to effect transactions directly on behalf of the segregated account.

         Further, the Committee may, by written notice and in accordance with
the Plan, direct the Trustee to segregate any portion or all of the Investment
Fund into one or more separate accounts for each of which full investment
responsibility will be delegated to an insurance company through one or more
group annuity contracts, deposit administration contracts, or similar contracts,
which may provide for investments in any commingled separate accounts
established under such contracts. An insurance company shall be a Manager with
respect to any amounts held under such a contract except to the extent the
insurer's assets are not deemed assets of the Plan and Trust Fund pursuant to
Section 401(b)(2) of ERISA. The allocation of amounts held under such a contract
among the insurer's general account and one or more individual or commingled
separate accounts shall be determined by the Committee except as otherwise
agreed by the Committee and the insurer.

         Any Manager shall have all of the powers given to the Trustee pursuant
to Section 2.3 with respect to the portion of the Trust Fund committed to its
investment discretion and control. The Trustee shall be responsible for the
safekeeping of any assets which remain in their custody, but in no event shall
the Trustee be under any duty to question or make any inquiry or suggestion
regarding the action or inaction of a Manager or an insurer or the advisability
of acquiring, retaining, or disposing of any asset of a segregated account. The
Employer shall indemnify and hold the Trustee harmless from any and all costs,
damages, expenses, and liabilities which the Trustee may incur by reason of any
action taken or omitted to be taken by the Trustee upon directions from the
Committee, a Manager, or an insurer pursuant to this Section 2.2.

         2.3 Trustee Powers. In addition to and not by way of limitation upon
the fiduciary powers granted to it by law, the Trustee shall have the following
specific powers, subject to the limitations set forth in Section 2.1:

         2.3-1 to receive, hold, manage, invest and reinvest the money or other
property which constitutes the Trust Fund, without distinction between principal
and income;

         2.3-2 to hold funds uninvested temporarily, provided it is a period of
time that is not unreasonable, without liability for interest thereon, and to
deposit funds in one or more savings or similar accounts with any banks and
savings and loan associations which are insured by an instrumentality of the
federal government, including the Trustee if it is such an institution.

         2.3-3 at the direction of the Committee, to invest or reinvest the
whole or any portion of the money or other property which constitutes the Trust
Fund in such common or preferred stocks, investment trust shares, mutual funds,
commingled trust funds, partnership interests, bonds, notes, or other evidences
of indebtedness, and real and personal property as the Trustee in their absolute
judgment and discretion may deem to be for the best interests of the Trust Fund,

                                       3

<PAGE>

regardless of nondiversification to the extent that such nondiversification is
clearly prudent, and regardless of whether any such investment or property is
authorized by law regarding the investment of trust funds, of a wasting asset
nature, temporarily nonincome producing, or within or without the United States;

         2.3-4 to invest in common and preferred stocks, bonds, notes, or other
obligations of any corporation or business enterprise in which an Employer or
its owners may own an interest;

         2.3-5 at the direction of the Committee, to exchange any investment or
property, real or personal, for other investments or properties at such time and
upon such terms as the Trustee shall deem proper;

         2.3-6 at the direction of the Committee, to sell, transfer, convey or
otherwise dispose of any investment or property, real or personal, for cash or
on credit, in such manner and upon such terms and conditions as the Trustee
shall deem advisable, and no person dealing with the Trustee shall be under any
duty to inquire as to the validity, expediency, or propriety of any such sale or
as to the application of the purchase money paid to the Trustee;

         2.3-7 to hold any investment or property in the name of the Trustee,
with or without the designation of any fiduciary capacity, or in the name of a
nominee, or unregistered, or in such other form that title may pass by delivery;
provided, however, that the Trustee's records always show that such investment
or property belongs to the Trust Fund and the Trustee shall not be relieved
hereby of its responsibility to maintain safe custody of such investment or
property;

         2.3-8 to organize one or more corporations to hold, manage, or
liquidate any property, including real estate, owned or acquired by the Trust
Fund if in the sole discretion of the Trustee the organization of such
corporation or corporations is for the best interests of the Trust and the Plan
Participants and Beneficiaries;

         2.3-9 to extend the time for payment of, to modify, to renew, or to
release security from any mortgage, note or other evidence of indebtedness, or
to take advantage of or waive any default; to foreclose mortgages and bid on
property under foreclosure or to take title to property by conveyance in lieu of
foreclosure, either with or without the payment of additional consideration;

         2.3-10 to vote in person or by proxy all stocks and other securities
having voting privileges; to exercise or refrain from exercising any option or
privilege with respect to stocks and other securities, including any right or
privilege to subscribe for or otherwise to acquire stocks and other securities;
or to sell any such right or privilege; to assent to and join in any plan of
refinance, merger, consolidation, reorganization or liquidation of any
corporation or other enterprise in which this Trust may have an interest, to
deposit stocks and other securities with any committee formed to effectuate the
same, to pay any expense incidental thereto, to exchange stocks and other
securities for those which may be issued pursuant to any such plan, and to
retain

                                       4

<PAGE>

as an investment the stocks and other securities received by the Trustee; and to
deposit any investment in a voting trust; notwithstanding the preceding,
Participants and Beneficiaries shall be entitled to direct the manner in which
stock allocated to their respective accounts are to be voted on all matters. All
stock which has been allocated to Participants' Accounts for which the Trustee
has received no written direction and all unallocated Employer securities will
be voted by the Trustee in direct proportion to any Participant's directions
received and solely in the interest of the Participants and Beneficiaries.
Whenever such voting rights are to be exercised, the Employer, the Committee and
the Trustee shall see that all Participants and Beneficiaries are provided with
adequate opportunity to deliver their instructions to the Trustee regarding
voting of stock allocated to their accounts. The instructions of the
Participants with respect to the voting of allocated shares hereunder shall be
confidential;

         2.3-11 to abandon any property, real or personal, which the Trustee
shall consider to be worthless or not of sufficient value to warrant its keeping
or protecting; to abstain from the payment of taxes, water rents, assessments,
repairs, maintenance, and upkeep of any such property; to permit any such
property to be lost by tax sale or other proceedings, and to convey any such
property for a nominal consideration or without consideration;

         2.3-12 to borrow money from the Employer or from others (including the
Trustee), and to enter into installment contracts, for the purchase of Stock
upon such terms and conditions and at such reasonable rates of interest as the
Committee may deem to be advisable, to issue its promissory notes as Trustee to
evidence such debt, to secure the payment of such notes by pledging any property
of the Trust Fund, and to authorize the holders of any such notes to pledge them
to secure obligations of the holders and in connection therewith to repledge any
assets of the Trust as security therefor; provided that, with respect to any
extension of credit to the Trust involving, as a lender or guarantor, the
Employer or other "disqualified person" within the meaning of Section 4975(e)(2)
of the Code --

         (a)  each loan or installment contract is primarily for the benefit of
              Participants and Beneficiaries of the Plan;
         (b)  any interest on a loan or installment contract does not exceed a
              reasonable rate;
         (c)  the proceeds of any loan shall be used only to acquire Stock, to
              repay the loan, or to repay a previous loan meeting these
              conditions, and the subject of any installment contract shall be
              only the Trust's purchase of Stock;
         (d)  any collateral pledged to a creditor by the Trustee shall consist
              only of qualifying employer securities as that term is defined
              under Section 4975(e)(8) of the Code and the creditor shall have
              no recourse against the Trust Fund except with respect to the
              collateral (although the creditor may have recourse against an
              Employer as guarantor);
         (e)  payments with respect to a loan or installment contract shall be
              made only from those amounts contributed by the Employer to the
              Trust Fund, from amounts earned on such contributions, and from
              cash dividends received on unallocated Stock held by the Trust as
              collateral for such an obligation; and

                                       5

<PAGE>

         (f)   upon the payment of any portion of balance due on a loan or upon
               any installment payment, a proportionate part of any qualified
               employer securities originally pledged as collateral for such
               indebtedness shall be released from encumbrance in accordance
               with Section 4.2 of the Plan and the Committee shall at least
               annually advise the Trustee of the number of shares of Stock so
               released and the proper allocation of such shares under the terms
               of the Plan;

         2.3-13 to manage and operate any real property which shall at any time
constitute an asset of the Trust Fund; to make repairs, alterations, and
improvements thereto; to insure such property against loss by fire or other
casualty; to lease or grant options for the sale of such property, which lease
or option may be for a period of time which may extend beyond the life of this
Trust; and to take any other action or enter into any other contract respecting
such property which is consistent with the best interests of the Trust;

         2.3-14 to pay any and all reasonable and normal expenses incurred in
connection with the exercise of any power, right, authority or discretion
granted herein, and, upon prior notice to the Company, to employ and compensate
agents, investment counsel, custodians, actuaries, attorneys, and accountants in
such connection;

         2.3-15 to employ and consult with any legal counsel, who also may be
counsel to an Employer or the Administrator, with respect to the meaning or
construction of this Trust Agreement, the extent of the Trustee's obligations
and duties hereunder, and whether the Trustee should take or decline to take a
particular action hereunder, and the Trustee shall be fully protected with
respect to any action taken or omitted by such Trustee in good faith pursuant to
such advice;

         2.3-16 to defend any action or proceeding instituted against the Trust
Fund, to institute any action on behalf of the Trust Fund, and to compromise or
submit to arbitration any dispute concerning the Trust Fund;

         2.3-17 to make, execute, acknowledge and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;

         2.3-18 to commingle the Trust Fund created pursuant hereto, in whole or
in part, in a single trust with all or any portion of any other trust fund,
assigning an undivided interest to each such commingled trust fund, provided
that such commingled trust is itself exempt from taxation pursuant to Section
501(a) of the Code, or its successor Section; and provided further that the
trust agreement governing such commingled trust shall be deemed incorporated by
reference in the Plan;

         2.3-19 where two or more trusts governed by this Trust Agreement have
an undivided interest in any property, to credit the income from such property
to such trusts in proportion to

                                        6

<PAGE>

their undivided interests, and when non pro rata distributions of property or
money are made from such trusts, to make appropriate adjustments to the
undivided fractional interests of such trusts;

         2.3-20 to invest all or any portion of the Trust Fund in one or more
group annuity contracts, deposit administration contracts, and other such
contracts with insurance companies, including any commingled separate accounts
established under such contracts;

         2.3-21 generally, with respect to all cash, stocks and other
securities, and property, both real and personal, received or held in the Trust
Fund by the Trustee, to exercise all the same rights and powers as are or may be
lawfully exercised by persons owning cash, or stocks and other securities, or
such property in their own right; and to do all other acts, whether or not
expressly authorized, which it may deem necessary or proper for the protection
of the Trust Fund; and

         2.3-22 whenever more than two persons shall qualify to act as
co-Trustee, to exercise and perform every power (including discretionary
powers), authority or duty by the concurrence of a majority of them the same
effect as if all had joined therein, except that the unanimous vote of such
persons shall be necessary to determine the number (one or more) and identity of
persons who may sign checks, make withdrawals from financial institutions, have
access to safe deposit boxes, or direct the sale of trust assets and the
disposition of the proceeds.

         2.4 Brokerage. If permitted in writing by the Committee the Trustee
shall have the power and authority, to be exercised in their sole discretion at
any time and from time to time, to issue and place orders for the purchase or
sale of securities with qualified brokers and dealers. Such orders may be placed
with such qualified brokers and/or dealers who also provide investment
information or other research or statistical services to the Trustee in its
capacity as a fiduciary or investment manager for other clients.

         Section 3. Compensation and Indemnification of Trustee and Payment of
Expenses and Taxes.

         3.1 Fees and Expenses from Fund. In consideration for rendering
services pursuant to this Trust Agreement the Trustee shall be paid fees in
accordance with the Trustee's fee schedule as in effect from time to time. Fee
changes resulting in fee increases shall be effective upon not less than 30
days' notice to the Company. In addition, the Trustee shall be reimbursed for
any reasonable expenses, including reasonable attorneys' fees, incurred in the
administration of the Trust created hereby. Fees and expenses shall be allocated
to Participants' Accounts, if any, unless paid directly by the Employer. All
compensation and expenses of the Trustee shall be paid out of the Trust Fund or
by the Employer as specified in the Plan. If and to the extent the Trust Fund
shall not be sufficient, such compensation and expenses shall be paid by the
Employer upon demand. If payment is due but not paid by the Employer, such
amount shall be paid from the assets of the Trust Fund. The Trustee is hereby
empowered to withdraw all such

                                       7

<PAGE>

compensation and expenses which are 60 days past due from the Trust Fund, and,
in furtherance thereof, liquidate any assets of the Trust Fund, without further
authorization or direction from or by any person. Notwithstanding the foregoing,
in the event any officer or director of Enfield Federal Savings Bank serves as
trustee of the Plan, no compensation shall be paid to the officer or director in
exchange for his or her services as trustee.

         3.2 Indemnification. Notwithstanding any other provision of this Trust
Agreement, any individual designated as a trustee hereunder shall be indemnified
and held harmless by the Employer to the fullest extent permitted by law against
any and all costs, damages, expenses and liabilities including, but not limited
to attorneys' fees and disbursements reasonably incurred by or imposed upon such
individual in connection with any claim made against him or in which he may be
involved by reason of his being, or having been, a trustee hereunder, to the
extent such amounts are not satisfied by insurance maintained by the Employer,
except liability which is adjudicated to have resulted from the gross negligence
or willful misconduct of the Trustee by reason of any action so taken. Further,
any corporate trustee and its officers, directors and agents may be indemnified
and held harmless by the Employer to the fullest extent permitted by law against
any and all costs, damages, expenses and liabilities including, but not limited
to, attorneys' fees and disbursements reasonably incurred by or imposed upon
such persons and/or corporation in connection with any claim made against it or
them or in which such persons and/or corporation may be involved by reason of
its being, or having been, a trustee hereunder as may be agreed between the
Employer and such trustee, except liability which is adjudicated to have
resulted from the gross negligence or willful misconduct of the Trustee by
reason of any action so taken.

         3.3 Expenses. All expenses of administering the Trust and the Plan,
whether incurred by the Trustee or the Committee, shall be paid by the Trustee
from the Trust Fund to the extent such expenses shall not have been assumed by
the Employer.

         3.4 Taxes. All taxes that may be levied or assessed upon or in respect
of the Trust Fund shall be paid from the Trust Fund. The Trustee shall notify
the Committee of any proposed or final assessments of taxes and may assume that
any such taxes are lawfully levied or assessed unless the Committee advises it
in writing to the contrary within fifteen days after receiving the above notice
from the Trustee. In such case, the Trustee, if requested by the Committee in
writing, shall contest the validity of such taxes in any manner deemed
appropriate by the Committee; the Employer may itself contest the validity of
any such taxes, in which case the Committee shall so notify the Trustee and the
Trustee shall have no responsibility or liability respecting such contest. If
either party to this Agreement contests any such proposed levy or assessments,
the other party shall provide such information and cooperation as the party
conducting the contest shall reasonably request.

                                       8

<PAGE>

         Section 4.  Records and Valuation.

         4.1 Records. The Trustee, and any investment manager appointed pursuant
to Section 2.2, shall maintain accurate and detailed records and accounts of all
investments, receipts, disbursements and other transactions made by it with
respect to the Trust Fund, and all accounts, books and records relating thereto
shall be open at all reasonable time to inspection and audit by the Committee
and the Employer.

         4.2 Valuation. From time to time upon the request of the Committee, but
at least annually as of the last day of each Plan Year, the Trustee shall
prepare a balance sheet of the Investment Fund in accordance with the Plan and
shall deliver copies of the balance sheet to the Committee and the Employer.

         4.3 Discharge of Trustee. Ninety days after the filing of any balance
sheet under Section 4.2 or any accounting under Section 6, the Trustee shall be
forever released and discharged from any liability or accountability other than
for gross negligence or wilful misconduct on the part of the Trustee to anyone
with respect to the transactions shown or reflected in such balance sheet or
accounting, except with respect to any acts or transactions as to which the
Committee, within such ninety-day period, files written objections with the
Trustee. The written approval of the Committee of any balance sheet or
accounting so filed by the Trustee, or the Committee's failure to file written
objections within ninety days, shall be a settlement of such balance sheet or
accounting as against all persons, and shall forever release and discharge the
Trustee from any liability of accountability to anyone with respect to the
transactions shown or reflected in such balance sheet or accounting other than
liability arising out of the Trustee's gross negligence or wilful misconduct. If
a statement of objections is filed by the Committee and the Committee is
satisfied that its objections should be withdrawn or if the balance sheet or
accounting is adjusted to its satisfaction, the Committee shall indicate its
approval of the balance sheet or accounting in a written statement filed with
the Trustee and the Trustee shall be forever released and discharged from any
liability of accountability to anyone in accordance with the immediately
preceding sentence. If an objection is not settled by the Committee and the
Trustee, the Trustee may start a proceeding for a judicial settlement of the
balance sheet or accounting in any court of competent jurisdictions; the only
parties that need be joined in such a proceeding are the Trustee, the Committee,
the Employer and any other parties whose participation is required by law.

         4.4 Right to Judicial Settlement. Nothing in this Agreement shall
prevent the Trustee from having its account settled by a court of competent
jurisdiction at any time. The only parties that need be joined in any such
proceeding are the Employer, the Committee, the Trustee and any other parties
whose participation is required by law.

                                       9

<PAGE>

         Section 5. Instructions from Committee.

         5.1 Certification of Members of the Committee. From time to time the
Company shall certify to the Trustee in writing the names of the individuals
comprising the Committee and shall furnish to the Trustee specimens of their
signatures and the signatures of their agents, if any. The Trustee shall be
entitled to presume that the identities of such individuals and their agents are
unchanged until it receives a certification from the Company notifying it of any
changes.

         5.2  Instructions to Trustee.

         (a) The Trustee shall pay benefits and administrative expenses under
the Plan only when it receives (and in accordance with) written instructions of
the Committee indicating the amount of the payment and the name and address of
the recipient in accordance with the terms of the Plan. The Trustee need not
inquire into whether any payment the Committee instructs the Trustee to make is
consistent with the terms of the Plan or applicable law or otherwise proper. Any
payment made by the Trustee in accordance with such instructions shall be a
complete discharge and acquittance to the Trustee. If the Committee advises the
Trustee that benefits have become payable with respect to a Participant's
interest in the Trust Fund but does not instruct the Trustee as to the manner of
payment, the Trustee shall hold the Participant's interest in the Trust until
the Trustee receives written instructions from the Committee as to the manner of
payment. The Trustee shall not pay benefits from the Trust Fund without such
instructions, even though it may be informed from other sources, including,
without limitation, a Participant or Beneficiary, that benefits are payable
under the Plan. The Trustee shall have no responsibility to determine when, to
whom or in what amount benefits and expenses are payable under the Plan.
Further, the Trustee shall have no power, authority or duty to interpret the
Plan or inquire into the decisions or determinations of the Committee, or to
question the instructions given to it by the Committee. If the Committee so
directs, the Trustee shall segregate amounts payable with respect to the
interest in the Plan of any Participant and administer them separately from the
rest of the Trust Fund in accordance with the Committee's instructions.

         (b) The Trustee may require the Committee to certify in writing that
any payment of benefits or expenses it instructs the Trustee to make pursuant to
Section 5.2(a) above is: (i) in accordance with the terms of the Plan and/or
(ii) one which the Committee is authorized by the Plan and any other applicable
instruments to direct and/or (iii) made for the exclusive purpose of providing
benefits to Participants and Beneficiaries, or defraying reasonable expenses of
Plan administration and/or (iv) not made to a party in interest (within the
meaning of ERISA Section 3(14)), and/or (v) not a prohibited transaction (within
the meaning of Code Section 4975 and ERISA Section 406). If the Trustee
requests, instructions to pay benefits shall be made by the Committee on forms
prepared by the Trustee to include any or all of the above representations. The
Trustee shall be fully protected in relying on the truth of any such
representation by the Committee and shall have no duty to investigate whether
such representations are correct or to see to the application of any amounts
paid to and received by the recipient.

                                       10

<PAGE>

         5.3 Plan Change. In the event of an amendment, merger, division, or
termination of the Plan, the Trustee shall continue to disburse funds and to
take other proper actions in accordance with the instructions of the Committee.

         Section 6. Change of Trustee.

         The Company may at any time remove any person or entity serving as a
Trustee hereunder by giving to such person or entity written notice of removal
and, if applicable, the name and address of the successor trustee. Any person or
entity serving as a Trustee hereunder may resign at any time by giving written
notice to the Company. Any such removal or resignation shall take effect within
30 days after notice has been given by the Trustee or by the Company, as the
case may be. Within those 30 days, the removed or resigned Trustee shall
transfer, pay over and deliver any portion of the Trust Fund in its possession
or control (less an appropriate reserve for any unpaid fees, expenses, and
liabilities) and all pertinent records to the successor or remaining trustee;
provided, however, that any assets which are invested in a collective fund or in
some other manner which prevents their immediate transfer shall be transferred
and delivered to the successor trustee as soon as may be practicable.
Thereafter, the removed or resigned Trustee shall have no liability for the
Trust Fund or for its administration by the successor or remaining trustee, but
shall render an accounting to the Committee of its administration of the Trust
Fund through the date on which its Trusteeship shall have been terminated. The
Company may also, upon 30 days' notice to each person currently serving as a
trustee, appoint one or more persons to serve as co-Trustee hereunder.

         Section 7. Miscellaneous.

         7.1 Right to Amend. This Trust Agreement may be amended from time to
time by an instrument executed by the Company; provided, however, that any
amendment affecting the powers, duties or liabilities of the Trustee must be
approved by the Trustee, and provided, further, that no amendment may divert any
portion of the Trust Fund to purposes other than the exclusive benefit of the
Participants and their Beneficiaries prior to the satisfaction of all
liabilities for benefits. Any amendment shall apply to the Trust Fund as
constituted at the time of the amendment as well as to that portion of the Trust
Fund which is subsequently acquired.

         7.2 Compliance with ERISA. In the exercise of its powers and the
performance of its duties, the Trustee shall act in good faith and in accordance
with the applicable requirements under ERISA. Except as may be otherwise
required by ERISA, the Trustee shall not be required to furnish any bond in any
jurisdiction for the performance of their duties and, if a bond is required
despite this provision, no surety shall be required on it.

         7.3 Nonresponsibility for Funding. The Trustee shall be under no duty
to enforce the payment of any contributions and shall not be responsible for the
adequacy of the Trust Fund to satisfy any obligations for benefits, expenses,
and liabilities under the Plan.

                                       11

<PAGE>

         7.4 Reports. The Trustee shall file any report which they are required
by law to file with any governmental authority with respect to this Trust, and
the Committee shall furnish to the Trustee whatever information is necessary to
prepare the report.

         7.5 Dealings with the Trustee. Persons dealing with the Trustee,
including but not limited to banks, brokers, dealers, and insurers, shall be
under no obligation to inquire concerning the validity of anything which the
Trustee purports to do, nor need any person see to the proper application of any
money paid or any property transferred upon the order of the Trustee or to
inquire into the Trustee's authority as to any transaction.

         7.6 Limitation Upon Responsibilities. The Trustee shall have no
responsibilities with respect to the Plan or Trust other than those specifically
enumerated or explicitly allocated to it under this Trust Agreement or the
provisions of ERISA. All other responsibilities are retained and shall be
performed by one or more of the Employer, the Committee, and such advisors or
agents as they choose to engage.

         The Trustee may execute any of the trusts or powers hereof and perform
any of its duties by or through attorneys, agents, receivers or employees and
shall not be answerable for the conduct of the same if chosen with reasonable
care and shall be entitled to advice of counsel concerning all matters of trust
hereof and the duties hereunder, and may in all cases pay such reasonable
compensation to all such attorneys, agents, receivers and employees as may
reasonably be employed in connection with the trusts hereof. The Trustee may act
upon the opinion or advice of any attorney (who may be the attorney for the
Trustee or attorney for the Committee), approved by the Trustee in the exercise
of reasonable care. The Trustee shall not be responsible for any loss or damage
resulting from any action or non-action in good faith in reliance upon such
opinion or advice.

         The Trustee shall be protected in acting upon any notice, request,
consent, certificate, order, affidavit, letter, telegram or other paper or
document believed to be genuine and correct and to have been signed or sent by
the proper person or persons, and the Trustee shall be under no duty to make any
investigation or inquiry as to any statement contained in any such writing but
may accept the same as conclusive evidence of the truth and accuracy of the
statements therein contained.

         The Trustee shall not be liable for other than their gross negligence
or willful misconduct. Except in the case of gross negligence or wilful
misconduct on the part of the Trustee, the Trustee in its corporate capacity
shall not be liable for claims of any persons in any manner regarding the Plan;
such claims shall be limited to the Trust Fund. Unless the Trustee participates
knowingly in, or knowingly undertakes to conceal, an act or omission of the
Committee or any other fiduciary, knowing such act or omission to be a breach of
fiduciary responsibility, the Trustee shall be under no liability for any loss
of any kind which may result by reason of such act or omission.

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         Before taking any action hereunder at the request or direction of the
Committee, the Trustee may require that indemnity in form and amount
satisfactory to the Trustee be furnished for the reimbursement of any and all
costs and expenses to which they may be put including, without limitation,
reasonable attorneys' fees and to protect them against all liability, except
liability which is adjudicated to have resulted from the gross negligence or
willful misconduct of the Trustee by reason of any action so taken.

         No provision of this Trust Agreement shall require the Trustee to
expend or risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder, or in the exercise of any of their
rights or powers, if they shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to them.

         7.7 Qualification of the Plan and Trust. The Trustee shall be fully
protected in assuming that the Plan and Trust meet the requirements of Code
Sections 401 and 501, respectively, and all the applicable provisions of ERISA
unless they are advised to the contrary in writing by the Committee or a
governmental agency.

         7.8 Party in Interest Information. The Employer shall provide the
Trustee with such information concerning the relationship between any person or
organization and the Plan as the Trustee reasonably requests in order to
determine whether such person or organization is a party in interest with
respect to the Plan within the meaning of ERISA Section 3(14).

         7.9 Disputes. If a dispute arises as to the payment of any funds or
delivery of any assets by the Trustee, the Trustee may withhold such payment or
delivery until the dispute is determined by a court of competent jurisdiction or
finally settled in writing by the parties concerned.

         7.10 Successor Trustee. This Trust Agreement shall apply to any person
who shall be appointed to succeed the person currently appointed as the Trustee;
and any reference herein to the Trustee shall be deemed to include any one or
more individuals or corporations or any combination thereof who or which have at
any time acted as a co-trustee or as the sole trustee.

         7.11 Governing State Law. This Trust Agreement shall be interpreted in
accordance with the laws of the State of Tennessee to the extent those laws may
be applicable under the provisions of ERISA.

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         IN WITNESS WHEREOF, the parties hereto have executed this Trust
Agreement as of the day and year first above written.

ATTEST:                               JEFFERSON FEDERAL BANK


_____________________                 By:______________________________________
                                           For the Entire Board of Directors

ATTEST:                                    __________________, as TRUSTEE

_____________________                      ____________________________________

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