SOUND FEDERAL SAVINGS

                         2005 DIRECTOR DEFERRED FEE PLAN












                             White Plains, New York

                                 January 1, 2005

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                              SOUND FEDERAL SAVINGS
                         2005 DIRECTOR DEFERRED FEE PLAN

     THIS  DIRECTOR  DEFERRED  FEE PLAN  (the  "Plan"),  is  hereby  established
effective  this 1st day of  January  2005,  by the Board of  Directors  of Sound
Federal Savings (the "Board"),  a federally  chartered savings  association (the
"Association"),   to  provide   Participants   (as  defined   herein)  or  their
beneficiaries with retirement income benefits.

     WHEREAS,  the  Association  maintains  the Sound  Federal  Savings and Loan
Association  Restated Director Deferred Fee Plan, which was initially  effective
as of  December  31,  1979 and was  restated  effective  September  1, 1998 (the
"Restated Plan"), for the benefit of certain directors of the Association; and

     WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the
"Code"),  requires  that certain  types of  nonqualified  deferred  compensation
arrangements comply with its terms or be subject to current taxes and penalties;
and

     WHEREAS,  the Board froze the  Restated  Plan  effective as of December 31,
2004 in order to avoid the necessity of complying with Code Section 409A; and

     WHEREAS,  the Board now  desires to replace  the  frozen  Restated  Plan by
adopting a new Director Deferred Fee Plan effective as of January 1, 2005, which
complies with Code Section 409A, and for certain other purposes.

     NOW,  THEREFORE,  in  consideration of the premises and the mutual promises
herein contained, the Bank and the directors agree as follows:

                                    ARTICLE I

                                     PURPOSE

     The purpose of this Plan is to provide  current tax planning  opportunities
as well as supplemental  funds for retirement or death for eligible directors of
the  Association.  It is  intended  that the  Plan  will  aid in  retaining  and
attracting  directors by providing such persons with a means to supplement their
standard  of living at  retirement.  The Plan is  intended  to comply  with Code
Section 409A and any other regulatory  guidance issued thereunder.  Any terms of
the Plan that  conflict  with Code Section 409A shall be null and void as of the
effective date.

                                   ARTICLE II

                                   DEFINITIONS

     For the  purposes  of this Plan,  the  following  terms  have the  meanings
indicated, unless the context clearly indicates otherwise:

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     2.1 Account.  "Account"  means the Account as maintained by the Association
in  accordance  with  Article IV with  respect to any  deferral of  Compensation
pursuant to this Plan. A Director's Account shall be utilized solely as a device
for the  determination and measurement of the amounts to be paid to the Director
pursuant to the Plan. A Director's Account shall not constitute or be treated as
a trust fund of any kind.

     2.2 Association.  "Association"  means Sound Federal  Savings,  a federally
chartered savings association, or any successor to the business thereof, and any
affiliated or subsidiary corporations designated by the Board.

     2.3  Beneficiary.  "Beneficiary"  means the  person or  persons  (and their
heirs)  designated  as  Beneficiary  in  a  Director's  Beneficiary  Designation
(attached as Exhibit B) to whom the deceased Director's benefits are payable. If
no Beneficiary is so designated,  then the estate of the Director will be deemed
the Beneficiary.

     2.4 Board. "Board" means the Board of Directors of the Association. -----

     2.5 Change in Control.  "Change in Control" of the  Association  shall mean
(i) a change in ownership of the Association  under paragraph (a) below, or (ii)
a change in effective  control of the Association  under paragraph (b) below, or
(iii) a change in the  ownership of a  substantial  portion of the assets of the
Association under paragraph (c) below:

     (a)  Change in the ownership of the Association.  A change in the ownership
          of the  Association  shall occur on the date that any one  person,  or
          more  than one  person  acting  as a group  (as  defined  in  Proposed
          Treasury Regulation Section 1.409A-3(g)(5)(v)(B)),  acquires ownership
          of stock of the  corporation  that,  together  with stock held by such
          person or group,  constitutes  more than 50% of the total fair  market
          value or total voting power of the stock of such corporation.

     (b)  Change in the effective  control of the  Association.  A change in the
          effective  control  of the  Association  shall  occur on the date that
          either (i) any one person,  or more than one person  acting as a group
          (as    defined    in    Proposed    Treasury     Regulation    Section
          1.409A-3(g)(5)(v)(B)),  acquires (or has acquired  during the 12-month
          period  ending  on the date of the  most  recent  acquisition  by such
          person or persons)  ownership of stock of the  corporation  possessing
          35%  or  more  of  the  total  voting  power  of  the  stock  of  such
          corporation;  or (ii) a majority of members of the corporation's Board
          of Directors is replaced during any 12-month period by Directors whose
          appointment  or election is not  endorsed by a majority of the members
          of the  corporation's  Board  of  Directors  prior  to the date of the
          appointment  or  election,  provided  that  this  sub-section  (ii) is
          inapplicable  where  a  majority  shareholder  of the  Association  is
          another corporation.

     (c)  Change in the ownership of a substantial  portion of the Association's
          assets.  A change in the  ownership  of a  substantial  portion of the
          Association's  assets shall occur on the date that any one person,  or
          more  than one  person  acting  as a group  (as  defined  in  Proposed
          Treasury  Regulation  Section  1.409A-3(g)(v)(B)),  acquires  (or  has

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          acquired  during the  12-month  period  ending on the date of the most
          recent  acquisition  by  such  person  or  persons)  assets  from  the
          corporation that have a total gross fair market value equal to or more
          than 40% of the total gross fair market value of (i) all of the assets
          of the Association, or (ii) the value of the assets being disposed of,
          either  of which  is  determined  without  regard  to any  liabilities
          associated with such assets.

     (d)  For all purposes hereunder,  the definition of Change in Control shall
          be  construed  to be  consistent  with the  requirements  of  Proposed
          Treasury  Regulation  Section  1.409A-3(g),  except to the extent that
          such proposed  regulations are superseded by subsequent  guidance.  In
          addition,  for purposes of this Section 2.5 only,  "Association" shall
          be construed to mean also the Company.

     2.6 Code.  "Code" means the Internal  Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder.

     2.7 Committee.  "Committee" means the Committee appointed to administer the
Plan pursuant to Article VII.

     2.8 Company.  "Company" means Sound Federal Bancorp, the holding company of
the Association.

     2.9  Compensation.  "Compensation"  means  any Board or  Committee  fees or
retainer to which the Director becomes entitled during the Deferral Period.

     2.10 Deferral Agreement.  "Deferral Agreement" means the agreement filed by
a Director which  acknowledges  assent to the terms of the Plan and in which the
Director  elects to defer the receipt of  Compensation  earned during a Deferral
Period.  The Deferral  Agreement  must be filed with the Committee  prior to the
beginning  of the  Deferral  Period.  A new  Deferral  Agreement  or  Notice  of
Adjustment  of Deferral  may be  submitted  by the  Director  for each  Deferral
Commitment.  If the Director fails to submit a new Deferral  Agreement or Notice
of Adjustment of Deferral prior to the beginning of a Deferral Period, deferrals
for such period shall be made in  accordance  with the last  submitted  Deferral
Agreement or Notice of Adjustment of Deferral.

     2.11 Deferral Commitment.  "Deferral Commitment" means an election to defer
Compensation made by a Director pursuant to Article III and for which a separate
Deferral Agreement or Notice of Adjustment of Deferral has been submitted by the
Director to the Committee.

     2.12  Deferral  Period.  "Deferral  Period"  means the period  over which a
Director has elected to defer a portion of his Compensation.  Each calendar year
shall be a separate Deferral Period.

     2.13 Determination  Date.  "Determination  Date" means the last day of each
calendar month.

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     2.14 Director. "Director" means a member of the Board.

     2.15 Disability. "Disability" means any case in which a Participant: (i) is
unable to engage in any substantial  gainful activity by reason of any medically
determinable  physical or mental  impairment  which can be expected to result in
death or can be  expected  to last for a  continuous  period of not less than 12
months; or (ii) is, by reason of any medically  determinable  physical or mental
impairment  which can be  expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits  for a period of not less than 3 months  under an  accident  and health
plan covering employees of the Participant's employer.

     2.16 Investment Options.  "Investment Options" means the investment options
designated by the  Committee  from which each Director may express a preference,
as  described  in Article IV, for the  constructive  investment  of his Account.
Investment  Options  shall include only (i) cash or cash  equivalents,  and (ii)
stock in the Company.  Investment  Options  shall be used as earning  indices as
described  in Section 4.4. No provision of the Plan shall be construed as giving
any  Director  an  interest  in any of these  Investment  Options  nor shall any
provision  require  that the Company  make any  investment  in any option.  2.17
Notice of Adjustment of Deferral.  "Notice of Adjustment of Deferral"  means the
notice which the Director may submit for Deferral Periods  following the initial
Deferral Period in which the initial Deferral Agreement is submitted. The Notice
of Adjustment of Deferral shall set forth the Director's  elections with respect
to deferrals for said period.

     2.18 Participant.  "Participant"  means any individual who is designated by
the  Association  to  participate  in this Plan and who elects to participate by
filing a Deferral Agreement as provided in Article VI.

     2.19 Plan Benefit.  "Plan Benefit" means the benefit  payable to a Director
as calculated in Article V.

     2.20 Plan Year. "Plan Year" means a twelve month period commencing  January
1 and ending the following December 31.

     2.21  Separation  from  Service.   "Separation   from  Service"  means  the
Participant's   death,   retirement  or  termination  of  employment   with  the
Association. No Separation from Service shall be deemed to occur due to military
leave,  sick  leave or other  bona fide  leave of  absence if the period of such
leave does not exceed  six  months or, if longer,  so long as the  Participant's
right to reemployment  is provided by law or contract.  If the leave exceeds six
months and the Participant's  right to reemployment is not provided by law or by
contract,  then the  Participant  shall be have a Separation from Service on the
first date immediately following such six-month period.

     The Participant shall not be treated as having a Separation from Service if
the Participant  provides more than  insignificant  services for the Association
following the Participant's  actual or purported  termination of employment with
the  Association.  Services shall be treated as not being  insignificant if such

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services  are  performed  at an annual rate that is at least equal to 20% of the
services rendered by the Participant for the Association, on average, during the
immediately  preceding  three full calendar  years of employment (or if employed
less than three years,  such shorter period of  employment)  and the annual base
compensation  for such  services is at least  equal to 20% of the  average  base
compensation earned during the final three full calendar years of employment (or
if employed less than three years, such shorter period of employment).

     Where the Participant  continues to provide services to a previous employer
in a capacity other than as an employee,  a Separation  from Service will not be
deemed to have occurred if the  Participant  is providing  services at an annual
rate  that is 50% or more of the  services  rendered,  on  average,  during  the
immediate preceding three full calendar years of employment (or if employed less
than three years,  such lesser period) and the annual base compensation for such
services is 50% or more of the annual base compensation  earned during the final
three full calendar years of employment (or if less, such lesser period).

     2.22  Specified  Employee.  "Specified  Employee"  means,  in the event the
Association  or any  corporate  parent  is or  becomes  publicly  traded,  a Key
Employee  as such term is  defined  in Code  Section  416(i)  without  regard to
paragraph 5 thereof.

     2.23  Trustee.  "Trustee"  means the Trustee,  if any, of any grantor trust
which may be established by the Association to accumulate assets for the purpose
of funding the benefits promised under this Plan.

                                   ARTICLE III

                     PARTICIPATION AND DEFERRAL COMMITMENTS

     3.1 Eligibility and Participation.

     (a) Eligibility. Eligibility to participate in the Plan shall be limited to
members of the Board.

     (b)  Participation.  A Director may elect to  participate  in the Plan with
respect to any Deferral Period by submitting, as to the initial Deferral Period,
a Deferral  Agreement (as set forth at Exhibit A) or, as to subsequent  Deferral
Periods,  a Notice of  Adjustment  of Deferral (as set forth at Exhibit C). Said
Deferral Agreement or Notice of Adjustment of Deferral shall be submitted to the
Committee by December 15 of the calendar year immediately preceding the Deferral
Period for which it will be effective.  If a previously  eligible Director fails
to submit a new  Deferral  Agreement or Notice of  Adjustment  of Deferral for a
Deferral  Period,  the Committee shall treat the previously  submitted  Deferral
Agreement or Notice of Adjustment  of Deferral as still in effect.  In the event
that a Director  first  becomes a Director  during a calendar  year,  a Deferral
Agreement  must be  submitted  to the  Committee  no later than thirty (30) days
following the date the  individual  first becomes a Director,  and such Deferral
Agreement shall be effective only with regard to Compensation  earned or payable
following the submission of the Deferral Agreement to the Committee.

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     (c) Changes in Participation.  In the event that a Participant ceases to be
a  Director  or in the event  that a  Director  ceases to defer  receipt  of his
Compensation,  the  balance of his  Account  shall  continue  to be  adjusted in
accordance  with  Section  4.3 and 4.4.  A  Director  who has  filed a Notice of
Adjustment of Deferral pursuant to which he elects to cease deferring receipt of
any portion of his Compensation  may thereafter again file a Deferral  Agreement
or Notice of  Adjustment  of Deferral to defer  receipt of his  Compensation  in
accordance  with Section  3.1(b),  but only with respect to  Compensation  to be
earned following submission of such Deferral Agreement to the Committee.

     3.2 Form of  Deferral.  Except as  provided  in  Section  3.1(b)  above,  a
Director may elect in the Deferral Agreement to defer in whole percentages up to
100% of his  Compensation  for the calendar year  following the calendar year in
which the Deferral Agreement is submitted.

                                   ARTICLE IV

                         DEFERRED COMPENSATION ACCOUNTS

     4.1  Accounts.  For record  keeping  purposes  only,  an  Account  shall be
maintained for each Director.  Separate  subaccounts  shall be maintained to the
extent  necessary  to  properly  reflect the  Director's  total  vested  Account
balance.

     4.2  Elective  Deferred  Compensation.  The amount of  Compensation  that a
Director elects to defer shall be withheld from each payment of Compensation and
credited  to  the  Director's   Account  as  the  nondeferred   portion  of  the
Compensation  becomes or would have become payable.  Any withholding of taxes or
other amounts with respect to deferred  Compensation which is required by state,
federal  or  local  law  shall  be  withheld  from  the  Director's  nondeferred
Compensation  to the maximum extent possible with any excess being withheld from
the Director's Account.

     4.3  Determination  of  Accounts.   Each  Director's  Account  as  of  each
Determination  Date will consist of the balance of the Director's  Account as of
the immediately preceding Determination Date, increased by Compensation deferred
pursuant to a Deferral  Commitment and earnings,  and decreased by distributions
and losses, since that Determination Date.

     4.4 Determination of Earnings. Subject to such limitations as may from time
to time be  required  by law or imposed by the  Committee,  and  subject to such
operating  rules  and  procedures  as may be  imposed  from  time to time by the
Committee, each Director may express to the Committee a preference as to how the
Director's  Account  should be  constructively  invested  among  the  Investment
Options.

          (a) Any initial or  subsequent  expression  of  investment  preference
     shall be in writing,  on a form  provided by and filed with the  Committee,
     and shall be subject  to such rules and  procedures  as the  Committee  may
     promulgate  from time to time,  including rules as to when an expression of
     investment  preference will be effective.  In the event a grantor trust has
     been established,  the Committee shall forward the Director's expression of
     investment preference to the Trustee.

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          (b) If the Committee (or Trustee,  in the case of  establishment  of a
     grantor trust)  chooses to honor a Director's  investment  preferences,  in
     whole or in part, (i) the contributions and credits and other amounts added
     to a Director's Account shall be constructively invested in accordance with
     the then effective designation of investment preference, and (ii) as of the
     effective  date of any new investment  preference,  all or a portion of the
     Director's  Account at that date shall be constructively  reallocated among
     the designated  Investment Options according to the directions specified in
     the  investment  preferences  unless  and  until  a  subsequent  investment
     preference shall be filed and become effective.  Unless otherwise announced
     by the Committee,  investment  preferences  may be changed no more than two
     times per calendar  year and must be received by the Committee no less than
     ten (10) days before the  effective  date of the  change.  In the event the
     Committee, or in the case that a grantor trust is established, the Trustee,
     fails to honor a Director's expression of investment  preference,  in whole
     or in part,  the  Committee or Trustee shall so inform the Director as soon
     as reasonably practicable.

          (c) If  the  Committee  receives  an  initial  or  revised  investment
     preference  which it deems  to be  incomplete,  unclear  or  improper,  the
     Director's investment preference then in effect shall remain in effect (or,
     in the case of a deficiency in an initial investment  preference) until the
     next Determination Date, unless the Committee provides for, and permits the
     application of,  corrective  action prior to that time. The Committee shall
     announce  to the  Director  a default  Investment  Option,  which  shall be
     substituted for the Director's investment preference for any portion of his
     Account for which he fails to file an investment preference.

          (d) All  investment  preferences  shall be advisory only and shall not
     bind the Company, the Committee, or Trustee (if any). The Company shall not
     be obligated to invest any funds in connection with this Plan. If, however,
     the Company  chooses to invest funds to provide for its  liabilities  under
     this  Plan,  the  Committee,  or in the  event a  grantor  trust  has  been
     established,  the Trustee, shall have complete discretion as to investment.
     Notwithstanding  anything herein to the contrary,  in the event of a Change
     in Control or imminent Change in Control, the Association shall establish a
     grantor trust (if none has been previously established hereunder) and shall
     transfer to such trust prior to the Change in Control, the present value of
     an amount  sufficient  to fully  fund the then  existing  Accounts  of each
     Director.

          (e) Each  Director's  Account will be credited with earnings or losses
     as if the Account were actually  invested in accordance with the Director's
     expression of investment  preference,  as follows. As of each Determination
     Date,  the net  earnings  or losses  of each  Investment  Option  since the
     preceding  Determination  Date shall be  allocated  among all  Accounts  in
     accordance  with the  preferences  indicated by each Director as though the
     Accounts had been invested in the Investment Option in accordance with each
     Director's  indicated  preference.  For  purposes of this  allocation,  the

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     Account of each  Director  will consist of the balance of the Account as of
     the preceding Determination Date, adjusted (i) by adding to the balance any
     elective deferred Compensation made since the preceding  Determination Date
     and (ii) by  subtracting  from such balance all  distributions  made to the
     Director or to a  Beneficiary.  Each Account  shall be further  adjusted to
     reflect any changes in investment  preferences  which have become effective
     since the last Determination Date.

          (f) If it is determined that the  constructive  value of an Account as
     of any date on which  distributions are to be made differs  materially from
     the constructive value of the Account on the prior  Determination Date upon
     which the  distribution is to be based,  the Committee,  in its discretion,
     shall  have  the  right  to  designate   any  date  in  the  interim  as  a
     Determination Date for the purpose of constructively  revaluing the Account
     so that the Account from which the  distribution is being made will,  prior
     to the  distribution,  reflect  its share of such  material  difference  in
     value. Similarly, the Committee may adopt a policy of providing for regular
     interim  valuations  without  regard to the  materiality  of changes in the
     value of the Accounts.

     4.5 Vesting of Accounts.  A Director  shall be one hundred  percent  (100%)
vested at all times in the amount of  Compensation  elected to be deferred under
this Plan and earnings thereon.

     4.6  Statement of Accounts.  The  Committee  shall submit to each  Director
during the month of January, a statement setting forth the balance to the credit
of  the  Account  maintained  for a  Director  as of the  immediately  preceding
December.

                                    ARTICLE V

                                  PLAN BENEFITS

     5.1 Plan  Benefit.  If a Director  has a  Separation  from  Service for any
reason other than death,  the Association  shall pay a Plan Benefit equal to the
Director's vested Account, as determined in accordance with Article IV.

     5.2 Death Benefit. Upon the death of a Director,  the Association shall pay
to the Director's Beneficiary an amount determined as follows:

          (a) If the  Director  dies  after  Separation  from  Service  with the
     Association,  the remaining unpaid balance of the Director's vested Account
     shall be paid in the same form that  payments  were being made prior to the
     Director's death.

          (b) If the  Director  dies prior to  Separation  from Service with the
     Association,  the amount  payable shall be the Director's  Account  balance
     which shall be paid over the period  designated in the Director's  Deferral
     Agreement  or  Notice  of  Adjustment  of  Deferral,  provided  that if the
     Director elected a lump sum payment in his Deferral Agreement, such payment
     shall be made in a lump sum payment.

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     5.3 Hardship Distributions.  Upon a finding that a Director has suffered an
unforeseeable  emergency,  the Committee may, in its sole  discretion and to the
extent  permitted  under Section 409A of the Code, make  distributions  from the
Director's Account prior to the time specified for payment of benefits under the
Plan.  An  unforeseeable  emergency  means a severe  financial  hardship  to the
Director  resulting from an illness or accident of the Director,  the Director's
spouse or of a dependent (as defined in Code Section 152) of the Director,  loss
of the Director's property due to casualty,  or other similar  extraordinary and
unforeseeable  circumstances arising as a result of events beyond the control of
the  Director.  The amount of such  distribution  shall be limited to the amount
reasonably necessary to alleviate the unforeseeable emergency.

     5.4 Form of Benefit Payment.

          (a)  All  Plan  Benefits,   other  than  hardship   distributions   or
     distributions pursuant to Article VI, shall be paid in the form selected by
     the Director in the Deferral  Agreement or Notice of Adjustment of Deferral
     at the time of the Deferral Commitment.

          (b) If for any Deferral Commitment a Director fails to elect a form of
     benefit payment,  the form shall be the form of payment elected on the most
     recent past Deferral Agreement or Notice of Adjustment of Deferral.

          (c) A Director's  Account may be  distributed in cash, or in the event
     the Company has  established  a grantor  trust and such trust holds Company
     stock in  connection  with a Director's  selection of Company  stock as the
     investment  option for his Account,  the Committee shall direct the Trustee
     to distribute the Company stock in-kind from the trust in  satisfaction  of
     all or part  of the  Company's  obligation  to  make  distributions  to the
     Director.

     5.5 Commencement of Payments.

          (a)  Payments  under  the Plan  shall  commence  and  shall be paid in
     accordance  with the Director's  elections  under the  Director's  Deferral
     Agreement and Notice of Adjustment of Deferral.

          (b)  Notwithstanding  anything  in the  Plan to the  contrary,  to the
     extent  required under Section 409A of the Code, no payment to be made to a
     Specified  Employee  on or after the date of his  Separation  from  Service
     shall be made  sooner  than  six (6)  months  after  such  Separation  from
     Service.

     5.6  Modification of Deferral  Period.  In the event a Director  desires to
modify the period over which  amounts  accrued in his Account shall be deferred,
the  Director  may elect to change the manner  and time of  distribution  of the
balance  credited  to his  Account;  provided,  however,  that with  respect  to
Compensation  previously  deferred or to be deferred in accordance with Deferral
Commitments previously made and interest or other earnings thereon:

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          (a) Any such  election  shall not take effect until twelve (12) months
     after it is received by the Committee; and

          (b) Any  such  election  to  defer a  payment  to be made on a date or
     pursuant  to a  schedule  specified  in a Deferral  Agreement  or Notice of
     Adjustment  of Deferral  shall be made at least twelve (12) months prior to
     the date of the first payment scheduled to be made; and

          (c) Any such  election  to defer a payment  scheduled  to be made,  or
     begin, upon Separation from Service, a Change in Control or on a fixed date
     or pursuant to a fixed schedule specified when the Deferral  Commitment was
     made must provide for an  additional  deferral  period of at least five (5)
     years  in  accordance  with  Section  409A  of  the  Code  and  regulations
     thereunder.

     5.7  Determination  of  Annual  Installments.  Benefits  payable  in annual
installments  hereunder  shall be due and payable on the date  specified  in the
applicable election. The amount of each annual installment shall be equal to the
balance credited to the Director's  Account,  as of the last business day of the
month ending  immediately  prior to the date on which the payment is to be made,
divided by the number of installment payments remaining to be made.

                                   ARTICLE VI

                               EARLY DISTRIBUTIONS

     6.1  Conflicts of Interest.  To the extent  necessary to effect  compliance
with a certificate of divestiture  (within the meaning of Section  1043(b)(2) of
the Code),  the  Committee  may permit a lump sum payment of all or a portion of
the  Director's  Plan  Benefit   otherwise   payable  to  the  Director  or  his
Beneficiary.  Such lump sum payment  shall be in lieu of the benefits that would
otherwise be payable to the Director or his Beneficiary.

     6.2 Domestic  Relations  Order.  To the extent  required to comply with the
terms of a domestic relations order (within the meaning of Section 414(p) of the
Code) directed to and served upon the Plan, the Committee may direct the payment
of all or any  portion of the  benefit to which a Director is entitled to at any
time or in accordance with any benefit payment schedule set forth in such order.
Such lump sum payment shall be in lieu of the benefits  that would  otherwise be
payable to the Director or his Beneficiary.

                                   ARTICLE VII

                                 ADMINISTRATION

     7.1 Committee;  Duties.  This Plan shall be  administered by the Committee,
which shall be appointed by the Board. The Committee shall have the authority to
make,  amend,  interpret,  and enforce all appropriate rules and regulations for
the  administration  of this Plan and decide or resolve  any and all  questions,
including  interpretations  of this Plan,  as may arise in  connection  with the
Plan. A majority vote of the Committee members shall control any decision.

                                       10
<Page>

     7.2 Agents.  The Committee may, from time to time,  employ other agents and
delegate to them such administrative duties as it sees fit, and may from time to
time consult with counsel who may be counsel to the Association.

     7.3 Binding  Effect of  Decisions.  The decision or action of the Committee
with  respect  to  any  question  arising  out  of or  in  connection  with  the
administration,  interpretation  and  application  of the Plan and the  rules of
regulations  promulgated  hereunder shall be final,  conclusive and binding upon
all persons having any interest in the Plan.

     7.4  Indemnity of  Committee.  The  Association  shall  indemnify  and hold
harmless the members of the Committee against any and all claims,  loss, damage,
expense or  liability  arising from any action or failure to act with respect to
this Plan, except in the case of gross negligence or willful misconduct.

                                  ARTICLE VIII

                                CLAIMS PROCEDURE

     8.1 Claim. Any person claiming a benefit,  requesting an  interpretation or
ruling under the Plan,  or requesting  information  under the Plan shall present
the request in writing to the  Committee,  which shall respond in writing within
thirty (30) days.

     8.2 Denial of Claim. If the claim or request is denied,  the written notice
of denial shall state:

          (a) The  reasons  for  denial,  with  specific  reference  to the Plan
     provisions on which the denial is based.

          (b) A description of any additional  material or information  required
     and an explanation of why it is necessary.

          (c) An explanation of the Plan's claim review procedure.

     8.3 Review of Claim. Any person whose claim or request is denied or who has
not  received a response  within  thirty (30) days may request  review by notice
given in writing to the Committee. The claim or request shall be reviewed by the
Committee  who may,  but shall not be required to, grant the claimant a hearing.
On review, the claimant may have  representation,  examine pertinent  documents,
and submit issues and comments in writing.

     8.4 Final  Decision.  The decision on review shall  normally be made within
sixty (60) days.  If an  extension  of time is  required  for a hearing or other
special  circumstances,  the claimant shall be notified and the time limit shall
be one hundred  twenty (120) days.  The  decision  shall be in writing and shall
state the reasons and the relevant Plan provisions.

                                       11

<Page>
     8.5  Arbitration.  If a claimant  continues  to dispute the benefit  denial
based upon completed  performance of this Plan and the Deferral Agreement or the
meaning and effect of the terms and  conditions  thereof,  then the claimant may
submit the  dispute  to  mediation,  administered  by the  American  Arbitration
Association  ("AAA") (or a mediator  selected by the parties) in accordance with
the  AAA's  Commercial  Mediation  Rules.  If  mediation  is not  successful  in
resolving the dispute,  it shall be settled by arbitration  administered  by the
AAA under its Commercial  Arbitration  Rules, and judgment on the award rendered
by the arbitrator(s) may be entered in any court having jurisdiction thereof.

                                   ARTICLE IX

                        AMENDMENT AND TERMINATION OF PLAN

     9.1  Amendment.  The  Board  may at any time  amend the Plan in whole or in
part,  provided,  however,  that no amendment  shall be effective to decrease or
restrict the amount  accrued to the date of Amendment in any Account  maintained
under the Plan.

     9.2  Termination of the Plan.  Subject to the  requirements of Code Section
409A, in the event of complete  termination of the Plan, the Plan shall cease to
operate and the  Association  shall pay out to the Participant his benefit as if
the  Participant  had  terminated  employment  as of the  effective  date of the
complete  termination.  Such complete  termination  of the Plan shall occur only
under the following circumstances and conditions:

          (a) The Board may  terminate  the Plan within 12 months of a corporate
     dissolution  taxed under Code Section 331, or with approval of a bankruptcy
     court  pursuant  to 11 U.S.C.  ss.503(b)(1)(A),  provided  that the amounts
     deferred under the Plan are included in the  Participant's  gross income in
     the latest of (i) the calendar year in which the Plan terminates;  (ii) the
     calendar  year in which the amount is no longer  subject  to a  substantial
     risk of  forfeiture;  or (iii) the first calendar year in which the payment
     is administratively practicable.

          (b) The Board may  terminate  the Plan within the 30 days  preceding a
     Change in Control (but not  following a Change in Control),  provided  that
     the Plan shall only be treated as terminated if all  substantially  similar
     arrangements  sponsored  by the  Association  are  terminated  so that  the
     Participant and all participants under substantially  similar  arrangements
     are  required  to receive all amounts of  compensation  deferred  under the
     terminated  arrangements within 12 months of the date of the termination of
     the arrangements.

          (c)  The  Board  may   terminate   the  Plan  provided  that  (i)  all
     arrangements  sponsored by the  Association  that would be aggregated  with
     this Plan under Proposed Regulations Section 1.409A-1(c) if the Participant
     covered by this Plan was also  covered by any of those  other  arrangements
     are also  terminated;  (ii) no payments  other than  payments that would be
     payable  under  the terms of the  arrangement  if the  termination  had not
     occurred are made within 12 months of the  termination of the  arrangement;
     (iii) all  payments  are made  within 24 months of the  termination  of the
     arrangements;  and (iv) the  Association  does not adopt a new  arrangement
     that would be aggregated  with any  terminated  arrangement  under Proposed
     Regulations  Section  1.409A-1(c) if the  Participant  participated in both
     arrangements,  at  any  time  within  five  years  following  the  date  of
     termination of the arrangement.

                                       12
<Page>

                                    ARTICLE X

                                  MISCELLANEOUS

     10.1 Unfunded Plan. This Plan is intended to be an unfunded plan maintained
primarily  to  provide  deferred  compensation  benefits  for a select  group of
management or highly compensated employees.  This Plan is not intended to create
an investment contract, but to provide tax planning opportunities and retirement
benefits to eligible  individuals  who have elected to  participate in the Plan.
Eligible  individuals  are select members of management  who, by virtue of their
position with the  Association,  are uniquely  informed as to the  Association's
operations  and  have  the  ability  to  materially   affect  the  Association's
profitability and operations.

     10.2 Unsecured General Creditor. Directors and their Beneficiaries,  heirs,
successors  and assigns  shall have no legal or  equitable  rights,  interest or
claims  in any  property  or  assets  of the  Association,  nor  shall  they  be
Beneficiaries of, or have any rights,  claims or interests in any life insurance
policies,  annuity  contracts  or the proceeds  therefrom  owned or which may be
acquired by the  Association.  Such policies or other assets of the  Association
shall  not be  held  under  any  trust  for  the  benefit  of  Directors,  their
Beneficiaries,  heirs,  successors or assigns,  or held in any way as collateral
security for the  fulfilling of the  obligations of the  Association  under this
Plan. Any and all of the Association's assets and policies shall be, and remain,
the  general,   unpledged,   unrestricted   assets  of  the   Association.   The
Association's  obligation  under  the  Plan  shall  be that of an  unfunded  and
unsecured promise of the Association to pay money in the future.

     10.3 Trust Fund. The  Association  shall be responsible  for the payment of
all benefits  provided under the Plan. At its  discretion,  the  Association may
establish one or more trusts,  with such trustees as the Board may approve,  for
the purpose of providing for the payment of such benefits.  Such trust or trusts
may be irrevocable, but the assets thereof shall be subject to the claims of the
Association's  creditors. To the extent any benefits provided under the Plan are
actually  paid  from any such  trust,  the  Association  shall  have no  further
obligation  with respect  thereto,  but to the extent not so paid, such benefits
shall remain the obligation of, and shall be paid by, the Association.

     10.4 Payment to Director, Legal Representative or Beneficiary.  Any payment
to any Director or the legal representative,  Beneficiary, or to any guardian or
committee  appointed for such  Director or  Beneficiary  in accordance  with the
provisions hereof,  shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Association,  which may require the Director, legal
representative,  Beneficiary, guardian or committee, as a condition precedent to
such payment,  to execute a receipt and release thereof in such form as shall be
determined by the Association.

                                       13
<Page>

     10.5  Minimum  Regulatory  Capital  Requirement.  Notwithstanding  anything
herein to the contrary,  to the extent  required by applicable  law, no benefits
hereunder shall be earned or distributed in any year in which the Association is
not meeting its fully phased-in capital requirements.

     10.6  Nonassignability.  Neither a Director nor any other person shall have
any right to commute, sell, assign,  transfer,  hypothecate or convey in advance
of actual receipt the amounts,  if any, payable hereunder,  or any part thereof,
which are, and all rights to which are,  expressly  declared to be  unassignable
and  nontransferable.  No part of the  amounts  payable  shall,  prior to actual
payment,  be subject to seizure or  sequestration  for the payment of any debts,
judgments,  alimony or  separate  maintenance  owed by a  Director  or any other
person,  nor be transferable by operation of law in the event of a Director's or
any other person's bankruptcy or insolvency.

     10.7 Terms. Whenever any words are used herein in the masculine, they shall
be  construed  as though they were used in the  feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in the
plural,  they shall be  construed  as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

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

     10.9  Governing  Law. The  provisions  of this Plan shall be construed  and
interpreted according to the laws of the State of New York.

     10.10 Validity. In case any provision of this Plan shall be held illegal or
invalid for any  reason,  said  illegality  or  invalidity  shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.

     10.11 Notice. Any notice or filing required or permitted to be given to the
Committee  under the Plan shall be sufficient if in writing and hand  delivered,
or sent by registered or certified  mail,  to any member of the  Committee,  the
Plan  Administrator,  or the Secretary of the Association.  Such notice shall be
deemed given as of the date of delivery  or, if delivery is made by mail,  as of
the date shown on the postmark on the receipt for registration or certification.

     10.12  Successors.  The provisions of this Plan shall bind and inure to the
benefit of the Association and its successors and assigns. The term "successors"
as used herein shall include any corporate or other business entity which shall,
whether  by  merger,  consolidation,   purchase  or  otherwise  acquire  all  or
substantially all of the business and assets of the Association,  and successors
of any such corporation or other business entity.

     10.13 Late  Payments.  Any payment due and payable  under this Plan that is
not made  within  thirty  (30) days  after the date on which it is first due and
payable shall  continue to bear  interest or other  earnings from the date it is
first due through the date of actual payment unless the delay in payment results
solely from an act or failure to act on the part of the payment recipient. Where
a delay in excess of thirty (30) days has  occurred in the  commencement  of any
series of  payments,  the first  payment  made shall also  include any  previous
installments that are due.

                                       14
<Page>

     10.14  Cashout of Small  Benefits If at any time the total present value of
the payment due and payable to a person under this Plan equals  $10,000 or less,
such entire present value shall be paid to the recipient as soon as practicable.
Any such payment shall be in full  settlement of such  person's  interest  under
this Plan.

     10.15  Compliance with Section 409A of the Code. The Plan is intended to be
a  non-qualified  deferred  compensation  plan  described in Section 409A of the
Code. The Plan shall be operated,  administered  and construed to give effect to
such  intent.  To the extent that a  provision  of the Plan fails to comply with
Code Section 409A and a  construction  consistent  with Code Section 409A is not
possible, such provision shall be void ab initio. In addition, the Plan shall be
subject to  amendment,  with or without  advance  notice to Directors  and other
interested parties, and on a prospective or retroactive basis, including but not
limited  to  amendment  in  a  manner  that  adversely  affects  the  rights  of
participants  and other  interested  parties,  to the extent necessary to effect
such compliance.

     10.16 Required Regulatory Provisions. The following provisions are included
for  the  purposes  of  complying  with  various  laws,  rules  and  regulations
applicable to the Association:

          (a) Notwithstanding  anything herein contained to the contrary, if the
     Director  is  suspended  from office  and/or  temporarily  prohibited  from
     participating in the conduct of the affairs of the Association  pursuant to
     a notice  served under  section  8(e)(3) or 8(g)(1) of the Federal  Deposit
     Insurance Act (the "FDI Act"), 12 U.S.C.  ss.1818(e)(3) or 1818(g)(1),  the
     Association's obligations under this Plan shall be suspended as of the date
     of service of such notice, unless stayed by appropriate proceedings. If the
     charges in such notice are dismissed,  the Association,  in its discretion,
     may (i) pay to the Director all or part of the compensation  withheld while
     the Association's  obligations hereunder were suspended and (ii) reinstate,
     in whole or in part, any of the obligations which were suspended.

          (b) Notwithstanding  anything herein contained to the contrary, if the
     Director is removed and/or permanently prohibited from participating in the
     conduct of the  Association's  affairs  by an order  issued  under  section
     8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C.  ss.1818(e)(4) or (g)(1),  all
     prospective  obligations of the Association under this Plan shall terminate
     as of the effective date of the order, but vested rights and obligations of
     the Association and the Director shall not be affected.

          (c) Notwithstanding  anything herein contained to the contrary, if the
     Association is in default (within the meaning of section 3(x)(1) of the FDI
     Act,  12  U.S.C.   ss.1813(x)(1),   all  prospective   obligations  of  the
     Association under this Agreement shall terminate as of the date of default,
     but vested rights and obligations of the Association and the Director shall
     not be affected.

                                       15
<Page>

          (d)  Notwithstanding  anything herein  contained to the contrary,  all
     prospective  obligations of the Association  hereunder shall be terminated,
     except to the extent that a continuation  of this Plan is necessary for the
     continued  operation of the Association as determined:  (i) by the Director
     of the OTS or his  designee or the Federal  Deposit  Insurance  Corporation
     ("FDIC"),  at the  time  the  FDIC  enters  into an  agreement  to  provide
     assistance to or on behalf of the Association under the authority contained
     in  section  13(c) of the FDI Act,  12  U.S.C.  ss.1823(c);  or (ii) by the
     Director of the OTS or his  designee at the time such  Director or designee
     approves a supervisory  merger to resolve problems related to the operation
     of the  Association or when the  Association is determined by such Director
     to be in an unsafe or unsound condition.  The vested rights and obligations
     of the parties shall not be affected.

          (e) Any  payments  made  pursuant  to this  Plan  are  subject  to and
     conditioned  upon their  compliance  with section  18(k) of the FDI Act, 12
     U.S.C. ss.1828(k) and any regulations promulgated thereunder.

If and to the extent  that any of the  foregoing  provisions  shall  cease to be
required  or by  applicable  law,  rule or  regulation,  the same  shall  become
inoperative as though eliminated by formal amendment of this Plan.

                                       16
<PAGE>


     IN WITNESS WHEREOF, and pursuant to resolution of the Board of Directors of
Sound Federal Savings,  the parties hereto have hereunto set their hands the day
and year first written above.



ATTEST:                                              SOUND FEDERAL SAVINGS



By:   /s/ Anthony J. Fabiano         By:  /s/ Richard P. McStravick
      -----------------------             ------------------------------------
      Anthony J. Fabiano,                  Richard P. McStravick,
      Secretary                            President and Chief Executive Officer






                                       17

<PAGE>

                                    Exhibit A

                              SOUND FEDERAL SAVINGS
                         2005 DIRECTOR DEFERRED FEE PLAN
             INITIAL DEFERRAL AGREEMENT WITH DISTRIBUTION ELECTIONS

     I, ____________________________, and SOUND FEDERAL SAVINGS hereby agree for
good and valuable consideration, the value of which is hereby acknowledged, that
I shall  participate  in the  2005  Director  Deferred  Fee Plan  (the  "Plan"),
initially  effective  as of  January  1,  2005,  as such Plan may be  amended or
modified, and do further agree to the terms and conditions thereof.

                                ELECTION TO DEFER

     Pursuant to the  provisions  of the Plan, I  understand  that I may make an
irrevocable  election  to  defer  the  receipt  of board  fees due to me  during
calendar year 200__. Accordingly, I hereby make an irrevocable election to defer
_____ % of my board fees and/or _____% of my retainer due to me during  calendar
year 200__.  I  understand  that once  elected,  I may not change my election to
defer such board fees and/or any retainer due to me during  calendar year 200__.
Such deferrals shall commence on  _____________  200__, and shall renew annually
unless  changed at least  thirty  (30) days prior to January 1 of any year under
the Plan,  such changes to be effective  beginning  that January 1. I understand
and agree that my deferral election applies only to compensation attributable to
services I have not yet performed.

     I understand that my election to defer shall continue for subsequent  years
in accordance with this Deferral Agreement until such time as I submit a "Notice
of  Adjustment  of Deferral"  (Exhibit C hereto) to the  Administrator  at least
thirty (30) days prior to January 1 of any year under the Plan.  Such adjustment
will only take effect January 1 of the calendar year following the year in which
it is  executed.  A Notice of  Adjustment  of Deferral can be used to adjust the
amount of board fees and/or retainer to be deferred or to discontinue  deferrals
altogether.

                          DISTRIBUTION ELECTION OPTIONS

     In accordance  with the Plan, I understand and agree that all Plan benefits
shall be paid in the form I selected below, and that such election, once made by
me, shall be irrevocable with respect to such Plan year.

         Select either (i) or (ii) below:

         (i)      Fixed Distribution Schedule at Specified Date

         In accordance with the terms of the Plan, I hereby elect a deferral
period of _____ years. Payments hereunder shall commence in the year 20__. In
accordance therewith, I hereby elect to receive the amount of my deferred Board
fees and/or retainer in the following form (check one):

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years


<Page>

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

         (ii)     Separation from Service

     In the event of my  Separation  from  Service with the Board for any reason
other than cause,  I hereby elect to receive my Plan  Benefits in the  following
form (check one):

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

                           Optional Distribution Forms

     Notwithstanding the foregoing,  in the event of my Disability,  death prior
to  Separation  from  Service,  or in the  event of a Change in  Control  of the
Association  or the  Company,  as such terms are  defined in the Plan,  I hereby
elect the following  alternative  distribution  forms.  I understand  that these
elections are optional,  and that if not made, any relevant distribution will be
made in accordance with my selection under either (i) or (ii) above.

         Disability

     In the event that my service  on the Board is  terminated  on account of my
Disability,  I hereby elect to receive my Plan  Benefits in the  following  form
(check one):

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

         Death

     In the event of my death prior to Separation  from Service on the Board,  I
hereby elect that my Plan Benefits be distributed to my  beneficiary(ies) in the
following form (check one):

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years


<Page>


           _____  Substantially equal monthly payments over a period of 15 years

         Change in Control

     In the event of a Change in Control of the  Association  or the Company,  I
hereby elect to receive my Plan Benefits in the following form (check one):

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

     Notwithstanding  anything  in this  Deferral  Agreement  or the Plan to the
contrary,  all Plan distributions shall be made hereunder in accordance with new
Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

     This Deferral Agreement shall become effective upon execution below by both
the Director and a duly authorized officer of the Association.

Dated this _____ day of _______________, 200__.



 -------------------                  -------------------------------------
(Director)                           (Association duly authorized Officer)




<PAGE>
                                    Exhibit B

                              SOUND FEDERAL SAVINGS
                         2005 DIRECTOR DEFERRED FEE PLAN
                             BENEFICIARY DESIGNATION

The Director, under the terms of the 2005 Director Deferred Fee Plan executed by
Sound Federal Savings,  hereby  designates the following  Beneficiary to receive
any guaranteed payments or death benefits under such Plan, following his death:

PRIMARY BENEFICIARY:

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

Check here if you want the  offspring  of any  Primary  Beneficiary  who dies to
receive  the  share  that  otherwise  would  have  been  paid  to  that  Primary
Beneficiary:_____________

SECONDARY BENEFICIARY (if all Primary Beneficiaries pre-decease the individual):

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

Check here if you want the  offspring of any Secondary  Beneficiary  who dies to
receive  the  share  that  otherwise  would  have  been  paid to that  Secondary
Beneficiary:__________


     This  Beneficiary   Designation   hereby  revokes  any  prior   Beneficiary
Designation  which may have been in effect and this  Beneficiary  Designation is
revocable.



------------------------                      ---------------------------------
Date                                                 Participant





<PAGE>
                                    Exhibit C

                              SOUND FEDERAL SAVINGS
                         2005 DIRECTOR DEFERRED FEE PLAN
                        NOTICE OF ADJUSTMENT OF DEFERRAL


To:                   Sound Federal Savings
Attention:            Administrative Committee, 2005 Director Deferred Fee Plan


     I hereby give notice of my election to adjust the amount of my Compensation
deferral  in  accordance  with my  Deferral  Agreement,  dated  the  ____ day of
__________,  20__.  This notice is submitted no later than  December  15th,  and
shall become effective January 1st, as specified below.


         Adjust deferral as of:                               January 1st, 20__

         Previous Deferral Amount             ____________ per month
         New Deferral Amount                  ____________ per month
                                             (to discontinue deferral, enter $0)

                                            ------------------------------------
                                            DIRECTOR

                                            ------------------------------------
                                            DATE

                                            ACKNOWLEDGED
                                            BY:_________________________________


                                            TITLE: _____________________________


                                            ------------------------------------
                                            DATE