SOUND FEDERAL SAVINGS





                              AMENDED AND RESTATED
                            DIRECTOR RETIREMENT PLAN







                             White Plains, New York


                      Originally Effective January 1, 2004
                As Amended and Restated Effective January 1, 2005


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                              SOUND FEDERAL SAVINGS
                              AMENDED AND RESTATED
                            DIRECTOR RETIREMENT PLAN

     THIS AMENDED AND RESTATED DIRECTOR RETIREMENT PLAN (the "Plan"),  sponsored
by Sound  Federal  Savings,  a  federally  chartered  savings  association  (the
"Association"),   to  provide   Participants   (as  defined   herein)  or  their
beneficiaries  with  retirement  income  benefits,  amends and  restates  in its
entirety  the Sound  Federal  Savings  Director  Retirement  Plan.  The original
effective date of this Plan was January 1, 2004. This Plan is hereby amended and
restated effective as of January 1, 2005, in accordance with the terms set forth
herein.

     WHEREAS, the Association maintains the Directors Retirement Plan, effective
as of January 1, 2004 for the benefit of certain  directors of the  Association;
and

     WHEREAS,  the directors  serve the  Association  as members of the Board of
Directors (the "Board of Directors"); 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 of  Directors  now  desires  to amend and  restate  the
Directors  Retirement  Plan  effective as of January 1, 2005, in order to comply
with Code Section 409A, and for certain other purposes.

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

                                    Article I
                                   Definitions

Section 1.01      Definitions.
                  -----------

     In this  document,  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 a
beneficiary  of a  Participant,  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)  "Annual  Retirement  Benefit" means,  unless  otherwise set forth herein, a
     retirement  benefit  paid as 100% of the sum of the  annual  fees paid to a
     Director for attendance at regular monthly Board of Directors' meetings for
     the calendar year in which the Director's  Retirement Date occurs, plus the
     amount of any annual stipend paid to a Director in that year.

(b)  "Association" means Sound Federal Savings, White Plains, New York.

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(c)  "Board of Directors" means the Board of Directors of the Association.

(d)  "Change in Control" of the Association shall mean (i) a change in ownership
     of the Association under paragraph (1) below, or (ii) a change in effective
     control of the Association  under paragraph (2) below, or (iii) a change in
     the  ownership of a  substantial  portion of the assets of the  Association
     under paragraph (3) below:

     (1)  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.

     (2)  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.

     (3)  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)(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)  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.

     (4)  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  1.01(d)  only,  "Association"
          shall be construed to mean also "Company."

                                       2

<Page>

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

(f)  "Company" means Sound Federal Bancorp, Inc.

(g)  "Director" means a member of the Board of Directors serving on the Board of
     Directors on January 1, 2004.

(h)  "Participant"  means a Director who satisfies the eligibility  requirements
     set forth in Section 2.01 (a) of the Plan.

(i)  "Plan"  means this Sound  Federal  Savings  Amended and  Restated  Director
     Retirement Plan.

(j)  "Retirement Date" means the date on which a Director retires from the Board
     of  Directors.  For this  purpose,  a Director  shall be considered to have
     retired from the Board of Directors  upon his  Separation  from Service for
     any reason,  including but not limited to death or Disability,  unless such
     Separation  from  Service is as a result of the Board of  Directors  having
     "just cause," which shall be determined by the Board of Directors and shall
     include any of the following:  (i) gross negligence or gross neglect,  (ii)
     the commission of a felony or gross misdemeanor  involving moral turpitude,
     fraud,  or  dishonesty,  (iii) the willful  violation  of any law,  rule or
     regulation  (other  than a traffic  violation  or  similar  offense),  (iv)
     misappropriation  of  or  other  intentional  misconduct  damaging  to  the
     property or business of the  Association,  the Company or any subsidiary of
     the Association,  (v) an intentional  failure to perform stated duties,  or
     (vi) a breach of fiduciary duty involving personal profit.

(k)  "Separation from Service" means

     (1)  the Participant's death,  retirement or termination of employment with
          the Association.

     (2)  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 deemed to have a Separation  from Service on the
          first date immediately following such six-month period.

     (3)  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

                                       3
<Page>

          treated as not being  insignificant  if such 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).

     (4)  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 immediately 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).

(l)  "Specified  Employee"  means a "key employee" of a publicly traded company,
     as defined in Code Section  416(i) or, if different,  within the meaning of
     Code Section 409A and the Proposed  Regulations  or other  guidance  issued
     thereunder.

                                   Article II
                            Eligibility and Benefits

Section 2.01      Eligibility.
                  -----------

(a)  All Directors  shall be eligible to participate in this Plan.  Service with
     the board of directors of any entity other than the  Association  shall not
     be credited for any purpose under this Plan.

(b)  A Director's  participation  in the Plan shall  terminate upon his death or
     upon his ceasing to be a member of the Board of Directors, unless a benefit
     is otherwise payable pursuant to the terms of the Plan.

Section 2.02      Determination of Benefits.
                  --------------------------

(a)  A Director who retires or dies at or after age 70 with fifteen (15) or more
     years of continuous service on the Board of Directors shall receive 100% of
     his or her Annual  Retirement  Benefit,  payable in accordance with Section
     2.03(a) herein.

(b)  A  Director  who  retires  or dies at or after age 60 with five (5) or more
     years of  continuous  service on the Board of  Directors  shall  receive an
     Annual Retirement Benefit equal to the amount calculated by multiplying the
     Annual  Retirement  Benefit  by the  lesser  of 100%,  or a  fraction,  the
     numerator of which is the number of years of service and the denominator of
     which is fifteen (15).  The maximum Annual  Retirement  Benefit is equal to
     100% of the Director's Annual Retirement Benefit.

                                       4

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(c)  Directors who retire before age 60 (other than due to  Disability)  receive
     no benefits under this Plan, regardless of years of continuous service.

(d)  A  Director  who  incurs a  Disability  shall  be  entitled  to the  Annual
     Retirement  Benefit  calculated in accordance with Section 2.02(b) upon his
     Separation  from Service with the Board of Directors,  notwithstanding  his
     age upon termination due to Disability. For this purpose,  "Disability" has
     the   meaning   set  forth  in   Proposed   Treasury   Regulation   Section
     1.409A-3(g)(4).

(e)  A Director who is terminated  for just cause pursuant to Section 5.05 shall
     forfeit all benefits hereunder.

Section 2.03      Time and Manner of Payment.
                  --------------------------

(a)  The Annual Retirement Benefits provided in Section 2.02(a), (b), (c) or (d)
     of the Plan shall be payable for twenty (20) years.  Said benefit  shall be
     paid to the Director (or his beneficiary or estate, as applicable) in equal
     monthly  installments  commencing  upon the first business day of the month
     coincident with or immediately  following the Director's  Retirement  Date,
     and shall continue for a period of twenty (20) years.

(b)  In the  following  circumstances  and to the  following  extent,  the  Plan
     administrator  may, in its sole  discretion,  authorize the acceleration of
     the payment of benefits under the Plan:

     (1)  Unforeseeable Emergency.
          ----------------------

          In  the  event  that  a  Participant  has  suffered  an  unforeseeable
          emergency,  the Plan  administrator may, in its sole discretion and to
          the  extent  permitted  under  Section  409A of the Code,  allow  such
          Participant  to obtain a lump sum  payment  of an amount not to exceed
          the  lesser  of the  present  value  of the  then  remaining  benefits
          otherwise  payable  to the  Participant  and the amount  necessary  to
          alleviate the unforeseeable emergency.  Such lump sum payment shall be
          in lieu of the equivalent  benefits that would otherwise be payable to
          a Participant. For these purposes an "unforeseeable emergency" means a
          severe financial hardship to the Participant resulting from an illness
          or  accident  of  the  Participant,  the  Participant's  spouse,  or a
          dependent (as defined in Code Section 152(a)) of the Participant, loss
          of the  Participant's  property  due to  casualty,  or  other  similar
          extraordinary and unforeseeable  circumstances  arising as a result of
          events  beyond the control of the  Participant.  Amounts  allowed as a
          hardship  distribution may not exceed the amounts necessary to satisfy
          such  emergency  plus  amounts   necessary  to  pay  taxes  reasonably
          anticipated as a result of the distribution, after taking into account
          the  extent  to which  such  hardship  is or may be  relieved  through
          reimbursement  or  compensation  by  insurance  or  otherwise,  or  by
          liquidation of the Participant's assets (to the extent the liquidation
          of such assets would not itself cause severe financial hardship).

                                       5
<Page>

     (2)  Compliance with 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 Plan  administrator  may
          direct  the  payment of all or any  portion of the  benefit to which a
          Participant  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 a Participant.

     (3)  Compliance with Certificate of Divestiture.
          ------------------------------------------

          To the extent  necessary to effect  compliance  with a certificate  of
          divestiture  (within the meaning of Section  1043(b)(2)  of the Code),
          the Plan  administrator  may permit a lump sum payment in an amount up
          to the present value of the then remaining  benefits otherwise payable
          to the Participant  under this Plan. Such lump sum payment shall be in
          lieu of the benefits that would otherwise be payable to a Participant.

(c)  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  shall be made  sooner  than six (6) months  after such
     Specified Employee's Separation from Service.

                                   Article III
                                Change in Control

Section 3.01      Change in Control.
                  -----------------

(a)  Notwithstanding  any other  provision in this Plan to the contrary,  in the
     event of a  Change  in  Control,  each  Director  serving  on the  Board of
     Directors on the date of the Change in Control will be credited  with years
     of service  assuming the Director would have remained a member of the Board
     of Directors  until age 70. The lump sum equivalent to the present value of
     the benefit due under  Article II shall be paid to the Director at the time
     of the Change in Control.  Notwithstanding the foregoing,  the Director may
     elect to  receive  his  Annual  Retirement  Benefit  following  a Change in
     Control in annual  installments  over a 5, 10 or 15 year period  (provided,
     however, that such alternative forms of distribution shall be the actuarial
     equivalent of monthly  installments for 20 years).  The Director shall make
     this election on the Change in Control  Election  Form  attached  hereto as
     Exhibit A. Such election, if made, shall be made no later than December 31,
     2005.

(b)  A  Director  who has  retired  prior to a Change in Control  shall  receive
     immediately  upon a  Change  in  Control  a lump sum  payment  equal to the
     present value of the then remaining  Annual  Retirement  Benefit payable to
     such Director.

                                       6
<Page>

                                   Article IV
                                 Administration

     The  administration  of the Plan, the exclusive  power to interpret it, and
the responsibility for carrying out its provisions are vested in the Association
or its designee.  The  Association  or its designee  shall have the authority to
resolve any question under the Plan. The determination of the Association or its
designee as to the  interpretation of the Plan or any disputed question shall be
conclusive  and final to the extent  permitted  by  applicable  law.  Claims for
benefits  under the Plan shall be submitted in writing to the  Association or to
an individual designated by the Association for this purpose.

                                    Article V
                               General Provisions

Section 5.01      No Funding.
                  ----------

(a)  All amounts payable in accordance with the Plan shall  constitute a general
     unsecured  obligation  of the  Association.  Such  amounts,  as well as any
     administrative costs relating to the Plan, shall be paid out of the general
     assets of the Association.

(b)  The Association may, for administrative reasons,  establish a grantor trust
     with an independent  trustee for the benefit of  Participants  in the Plan.
     The assets,  if any,  placed in said trust shall be held separate and apart
     from other Association funds and shall be used exclusively for the purposes
     set forth in the Plan and the applicable trust  agreement.  The Association
     shall be treated as  "grantor" of said trust for purposes of Section 677 of
     the Code.  The agreement of said trust shall provide that its assets may be
     used upon the insolvency or bankruptcy of the Association to satisfy claims
     of the Association's  general creditors and that the rights of such general
     creditors   are   enforceable   by  them  under   federal  and  state  law.
     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  present  value  of the  Annual
     Retirement Benefit of each Director.

Section 5.02      Amendment of the Plan.
                  ---------------------

     The Association reserves the right to modify or amend the Plan, in whole or
in part,  at any  time,  and from  time to time.  However,  no  modification  or
amendment shall adversely affect the right of any Participant hereunder.

Section 5.03      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:

                                       7
<Page>

          (1) The Board of Directors  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.

          (2) The Board of Directors  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.

          (3) The Board of Directors  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.

Section 5.04      Non-alienation.
                  --------------

     Subject to any  applicable  law, no benefit under the Plan shall be subject
in any manner to anticipation,  alienation, sale, transfer,  assignment, pledge,
encumbrance or charge, and any attempt to do so shall be void.

Section 5.05      Forfeiture for Just Cause.
                  -------------------------

     In the event that the  Director's  service as a Director  is  involuntarily
terminated for reason of serious  misconduct,  including by way of example,  and
not by way of limitation, dishonesty or fraud on the part of such Participant in
his  relationship  with the  Association,  all benefits that would  otherwise be
payable to him under the Plan shall be forfeited.

Section 5.06      Construction.
                  ------------

(a)  The Plan shall be construed,  regulated and enforced  under the laws of the
     State  of New  York,  without  giving  regard  to  any  conflicts  of  laws
     principles thereof.

                                       8
<Page>

(b)  The masculine pronoun shall mean the feminine wherever appropriate, and the
     singular shall include the plural.

(c)  The  illegality or  unenforceability  of any  particular  provision of this
     document  shall not  affect  the  other  provisions  and the Plan  shall be
     construed in all respects as if such invalid provision were omitted.

(d)  The headings and subheadings in the Plan have been inserted for convenience
     of  reference  only,  and  are to be  ignored  in any  construction  of the
     provisions thereof.

Section 5.07      12 U.S.C. ss. 1828(k).
                  ---------------------

     Any payments made to a Director  pursuant to this Plan,  or otherwise,  are
subject to and conditioned  upon their compliance with 12 U.S.C. ss. 1828(k) and
any regulations promulgated thereunder.

Section 5.08      Effective Date.
                  --------------

     The original  effective  date of the Plan was January 1, 2004.  The Plan is
hereby  amended and restated  effective  January 1, 2005 in order to comply with
Code Section 409A.

Section 5.09      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.

Section 5.10      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.

Section 5.11      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.  Section  1818(e)(3)  or  1818(g)(1),  the
     Association's obligations under this Plan shall be suspended as of the date
                                       9

<Page>

     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.  Section  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.  Section  1813(x)(1)),  all  prospective  obligations of the
     Association under this Plan shall terminate as of the date of default,  but
     vested rights and obligations of the Association and the Director shall not
     be affected.

(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.  Section 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.

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.

Section 5.12      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.

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<page>

In addition,  the Plan shall be subject to  amendment,  with or without  advance
notice to Participants  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.


                            [Signature Page Follows]








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<PAGE>


     IN WITNESS  WHEREOF,  the parties  hereto have hereunto set their hands the
day and year first written above.



Attested to:                                      SOUND FEDERAL SAVINGS




/s/ Anthony J. Fabiano                      By:    /s/s Bruno J. Gioffre
-------------------------------                   ------------------------------
                                                  For the Board of Directors

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<PAGE>


                                    Exhibit A

                              SOUND FEDERAL SAVINGS
                  AMENDED AND RESTATED DIRECTOR RETIREMENT PLAN

                         CHANGE IN CONTROL ELECTION FORM


     According to the terms of Section  3.01 of this Plan, I understand  that in
the event of a Change in Control, unless I elect to receive my Annual Retirement
Benefit in installments, I shall receive a lump sum payment equal to the present
value of my Annual Retirement Benefit at the time of the Change in Control.

     I may elect to receive my Annual  Retirement  Benefit  in  installments  in
connection  with or following a Change in Control and that such election must be
made no later than December 31, 2005.

     In the event of a Change in Control of the  Association,  I hereby elect to
receive my Annual Retirement Benefit in the following form (check one):

         ________ Lump Sum Distribution

         ________ Substantially equal monthly payments over a period of:

                           __________        5 Years

                           __________       10 Years

                           __________       15 Years





Signature   ______________________________

Date   __________________________________


Received by the Association this ______ day of _________________, 20___.

By  ____________________________________
Title  __________________________________

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