Document:

EXHIBIT 10.3

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                           Carver Federal Savings Bank
                               401(k) Savings Plan
                                       In
                              RSI Retirement Trust
               (As Amended And Restated Effective January 1, 1997
           and including provisions effective through January 1, 2002)
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Incorporating Proposed Amendment Number One

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                                                               Table Of Contents
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                                TABLE OF CONTENTS

Table Of Contents..............................................................i

Introduction...................................................................1

Article I -  Definitions.......................................................3

Article II -  Eligibility and Participation...................................13
     2.1      Eligibility.....................................................13
     2.2      Ineligible Employees............................................13
     2.3      Participation...................................................14
     2.4      Termination of Participation....................................14
     2.5      Eligibility upon Reemployment...................................14
     2.6      Eligibility Upon Reemployment of Employees Subject to
               Section 16(b) of   the Securities Exchange Act of 1934.........15

Article III -  Contributions and Limitations on Contributions.................16
     3.1      Before-Tax Contributions........................................16
     3.2      Limitation on Before-Tax Contributions..........................16
     3.3      Changes in Before-Tax Contributions.............................19
     3.4      Matching Contributions..........................................20
     3.5      Special Contributions...........................................20
     3.6      Discretionary Employer Contributions............................21
     3.7      Limitation on Matching Contributions............................21
     3.8      Aggregate Limit; Multiple Use of Alternative Limitation.........23
     3.9      Interest on Excess Contributions................................24
     3.10     Payment of Contributions to the Trust and Separate Agency.......25
     3.11     Rollover Contributions..........................................25
     3.12     Section 415 Limits on Contributions.............................26
     3.13     Nonelective Employer Contributions..............................30

Article IV -  Vesting and Forfeitures.........................................32
     4.1      Vesting.........................................................32
     4.2      Forfeitures.....................................................33
     4.3      Vesting upon Reemployment.......................................34

Article V -  Trust Fund, Investment Accounts and voting rights................36
     5.1      Trust Fund......................................................36
     5.2      Interim Investments.............................................36
     5.3      Account Values..................................................37
     5.4      Voting Rights...................................................37
     5.5      Tender Offers and Other Offers..................................38
     5.6      Separate Assets.................................................39
     5.7      Power to Invest in Employer Securities..........................39

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Article VI -  Investment Directions, Changes of Investment Directions and
Transfers Between Investment Accounts.........................................40
     6.1      Investment Directions...........................................40
     6.2      Change of Investment Directions.................................40
     6.3      Transfers Between Investment Accounts...........................40
     6.4      Employees Other than Participants...............................41
     6.5      Restrictions on Investments in the Employer Stock Fund for
               Certain  Participants..........................................41

Article VII -  Payment of Benefits............................................43
     7.1      General.........................................................43
     7.2      Spousal Consent Requirements - Optional Forms of Benefit
               Payments, Loans, Withdrawals, Beneficiaries....................44
     7.3      Non-Hardship Withdrawals........................................46
     7.4      Hardship Distributions..........................................46
     7.5      Distribution of Benefits Following Retirement, Disability or
               Termination of Service.........................................50
     7.6      Optional Forms of Benefit Payment upon Retirement, Disability
               or Termination of Service......................................52
     7.7      Designation of Beneficiary......................................55
     7.8      Preretirement Death Benefits....................................56
     7.9      Direct Rollover of Eligible Rollover Distributions..............58
     7.10     Latest Commencement of Benefits.................................64
     7.11     Manner of Payment of Distributions from the Employer
               Stock Fund.....................................................65

Article VIII -  Loans to Participants.........................................66
     8.1      Definitions and Conditions......................................66
     8.2      Loan Amount.....................................................66
     8.3      Term of Loan....................................................66
     8.4      Operational Provisions..........................................67
     8.5      Repayments......................................................68
     8.6      Default.........................................................69
     8.7      Coordination of Outstanding Account and Payment of Benefits.....70

Article IX -  Administration..................................................71
     9.1      General Administration of the Plan..............................71
     9.2      Designation of Named Fiduciaries................................71
     9.3      Responsibilities of Fiduciaries.................................71
     9.4      Plan Administrator..............................................72
     9.5      Committee.......................................................72
     9.6      Powers and Duties of the Committee..............................73
     9.7      Certification of Information....................................74
     9.8      Authorization of Benefit Payments...............................75
     9.9      Payment of Benefits to Legal Custodian..........................75
     9.10     Service in More Than One Fiduciary Capacity.....................75

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     9.11     Payment of Expenses.............................................75
     9.12     Administration of Separate Assets...............................76

Article X -  Benefit Claims Procedure.........................................77
     10.1     Definition......................................................77
     10.2     Claims..........................................................77
     10.3     Disposition of Claim............................................77
     10.4     Denial of Claim.................................................77
     10.5     Inaction by Plan Administrator..................................78
     10.6     Right to Full and Fair Review...................................78
     10.7     Time of Review..................................................78
     10.8     Final Decision..................................................78

Article XI -  Amendment, Termination, and Withdrawal..........................79
     11.1     Amendment and Termination.......................................79
     11.2     Withdrawal from the Trust Fund..................................79

Article XII -  Top-Heavy Plan Provisions......................................80
     12.1     Introduction....................................................80
     12.2     Definitions.....................................................80
     12.3     Minimum Contributions...........................................84
     12.4     Impact on Section 415 Maximum Benefits..........................85
     12.5     Vesting.........................................................86

Article XIII -  Miscellaneous Provisions......................................87
     13.1     No Right to Continued Employment................................87
     13.2     Merger, Consolidation, or Transfer..............................87
     13.3     Nonalienation of Benefits.......................................87
     13.4     Missing Payee...................................................87
     13.5     Affiliated Employers............................................88
     13.6     Successor Employer..............................................88
     13.7     Return of Employer Contributions................................88
     13.8     Adoption of Plan by Affiliated Employer.........................88
     13.9     Construction of Language........................................89
     13.10    Headings........................................................89
     13.11    Governing Law...................................................89

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                                                                    Introduction
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                                  INTRODUCTION

Effective as of October 1, 1989, ("Effective Date"), Carver Federal Savings Bank
("Employer") adopted the Carver Federal Savings Bank 401(k) Savings Plan and
Trust ("1989 Plan").

Effective as of May 1, 1993, the Employer adopted resolutions wherein RSI
Retirement Trust was named successor trustee and the RSI Retirement Trust
Agreement and Declaration of Trust ("Agreement") was adopted.

Effective as of May 1, 1993, the 1989 Plan was amended and restated in its
entirety. The amended and restated plan became known as Carver Federal Savings
Bank 401(k) Savings Plan in RSI Retirement Trust ("Prior Plan"). Effective as of
October 24, 1994, the Employer (a) added an investment fund to the Prior Plan
consisting of common stock of the Employer, (b) established the Plan as a Plan
of Partial Participation as defined under the Agreement and (c) adopted a
Separate Agreement establishing a separate trust to hold the common stock of the
Employer and designated a Separate Agency to serve as trustee.

Effective as of January 1, 1997, the Prior Plan is amended and restated in its
entirety. The amended and restated plan shall be known as Carver Federal Savings
Bank 401(k) Savings Plan in RSI Retirement Trust ("Plan"), shall contain the
terms and conditions set forth herein, and shall in all respects be subject to
the provisions of the Agreement which are incorporated herein and made a part
hereof.

The Plan as amended and restated hereunder incorporates a cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code of 1986, as
amended ("Code").

The Plan shall constitute a profit-sharing plan within the meaning of Section
401(a) of the Code, without regard to current or accumulated profits of the
Employer, as provided in Section 401(a)(27) of the Code.

The Plan complies with all Internal Revenue Service legislation and regulations
issued to date addressing tax-qualified plans, including the Uniformed Services
Employment and Reemployment Rights Act of 1994, the Uruguay Round Agreements
Act, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of
1997, the Restructuring and Reform Act of 1998 and the Community Renewal Tax
Relief Act of 2000 (commonly referred to as GUST II), and "good faith"
compliance with the requirements of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA), as provided for under Internal Revenue
Service Notice 2001-57. In addition, the Plan complies with final regulations
under Code Section 401(a)(9).

Subject to any amendments that may subsequently be adopted by the Employer prior
to his Termination of Service, the provisions set forth in this Plan shall apply
to an Employee who is in the employment of the Employer on or after January 1,
1997. Except to the extent specifically required to the contrary under the terms
of this Plan, for terminations of employment prior to January 1, 1997, the
rights and benefits of a former participant shall be determined in accordance
with the provisions of the Prior Plan as in effect on the date of the former
participant's termination of employment.

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The Employer has herein restated the Plan with the intention that (i) the Plan
shall at all times be qualified under Section 401(a) of the Code, (ii) the
Agreement and any trust created under any Separate Agreement shall be tax-exempt
under Section 501(a) of the Code, and (iii) Employer contributions under the
Plan shall be tax deductible under Section 404 of the Code. The provisions of
the Plan and the Agreement, as well as any Separate Agreement shall be construed
to effectuate such intentions.

Effective January 1, 2002, the Plan is amended to meet the requirements for a
designed-based "safe harbor" arrangement under Sections 401(k)(12) and
401(m)(11) of the Code.

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                                                                     Article I -
                                                                     Definitions
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                                   ARTICLE I -
                                   DEFINITIONS

The following words and phrases shall have the meanings hereinafter ascribed to
them. Those words and phrases which have limited application are defined in the
respective Articles in which such terms appear.

1.1   Accounts means the Before-Tax Contribution Account (including Special
      Contributions, if any), Matching Contribution Account, Rollover
      Contribution Account, Discretionary Employer Contribution Account and
      commencing January 1, 2001, Nonelective Employer Contribution Account,
      established under the Plan on behalf of an Employee.

1.2   Actual Contribution Percentage means, prior to January 1, 2002, the ratio
      (expressed as a percentage) of the Matching Contributions under the Plan
      which are made on behalf of an Eligible Employee for the Plan Year to such
      Eligible Employee's compensation (as defined under Section 414(s) of the
      Code) for the Plan Year. An Eligible Employee's compensation hereunder
      shall include compensation receivable from the Employer for that portion
      of the Plan Year during which the Employee is an Eligible Employee, up to
      a maximum of one hundred sixty thousand dollars ($160,000) for the 1997,
      1998 and 1999 Plan Years and one hundred seventy thousand dollars
      ($170,000) for the 2000 and 2001 Plan Years, adjusted in multiples of ten
      thousand dollars ($10,000) for increases in the cost-of-living as
      prescribed by the Secretary of the Treasury under Section 401(a)(17)(B) of
      the Code.

1.3   Actual Deferral Percentage means, prior to January 1, 2002, the ratio
      (expressed as a percentage) of the sum of Before-Tax Contributions, and
      those Qualified Nonelective Contributions taken into account under the
      Plan for the purpose of determining the Actual Deferral Percentage, which
      are made on behalf of an Eligible Employee for the Plan Year to such
      Eligible Employee's compensation (as defined under Section 414(s) of the
      Code) for the Plan Year. An Eligible Employee's compensation hereunder
      shall include compensation receivable from the Employer for that portion
      of the Plan Year during which the Employee is an Eligible Employee, up to
      a maximum of one hundred sixty thousand dollars ($160,000) for the 1997,
      1998 and 1999 Plan Years and one hundred seventy thousand dollars
      ($170,000) for the 2000 and 2001 Plan Years, adjusted in multiples of ten
      thousand dollars ($10,000) for increases in the cost-of-living as
      prescribed by the Secretary of the Treasury under Section 401(a)(17)(B) of
      the Code.

1.4   Affiliated Employer means a member of an affiliated service group (as
      defined under Section 414(m) of the Code), a controlled group of
      corporations (as defined under Section 414(b) of the Code), a group of
      trades or businesses under common control (as defined under Section 414(c)
      of the Code) of which the Employer is a member, any leasing organization
      (as defined under Section 414(n) of the Code) providing the services of
      Leased Employees to the Employer, or any other group provided for under
      any and all Income Tax Regulations promulgated by the Secretary of the
      Treasury under Section 414(o) of the Code.

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1.5   Affiliated Service means employment with an employer during the period
      that such employer is an Affiliated Employer.

1.6   Agreement means the RSI Retirement Trust Agreement and Declaration of
      Trust as amended and restated August 1, 1990, as amended from time to
      time. The Agreement shall be incorporated herein and constitute a part of
      the Plan.

1.7   Average Actual Contribution Percentage means the average of the Actual
      Contribution Percentages of (a) the group comprised of Eligible Employees
      who are Highly Compensated Employees or (b) the group comprised of
      Eligible Employees who are Non-Highly Compensated Employees, whichever is
      applicable.

1.8   Average Actual Deferral Percentage means the average of the Actual
      Deferral Percentages of (a) the group comprised of Eligible Employees who
      are Highly Compensated Employees or (b) the group comprised of Eligible
      Employees who are Non-Highly Compensated Employees, whichever is
      applicable.

1.9   Before-Tax Contribution Account means the separate, individual account
      established on behalf of a Participant to which Before-Tax Contributions
      and Special Contributions if any, made on his behalf are credited,
      together with all earnings and appreciation thereon, and against which are
      charged any withdrawals, loans and other distributions made from such
      account and any losses, depreciation or expenses allocable to amounts
      credited to such account.

1.10  Before-Tax Contributions means the contributions of the Employer made in
      accordance with the Compensation Reduction Agreements of Participants
      pursuant to Section 3.1.

1.11  Beneficiary means any person who is receiving or is eligible to receive a
      benefit under Section 7.8 of the Plan upon the death of an Employee or
      former Employee.

1.12  Board means the board of trustees, directors or other governing body of
      the Sponsoring Employer.

1.13  Code means the Internal Revenue Code of 1986, as amended from time to
      time.

1.14  Committee means the person or persons appointed by the Employer in
      accordance with Section 9.2(b).

1.15  Compensation means with respect to Plan Years commencing on and after
      January 1, 1997, an Employee's wages, salary, fees and other amounts
      defined as compensation in Section 415(c)(3) of the Code and Income Tax
      Regulations Sections 1.415-2(d)(2), (3) and (6), received for personal
      services actually rendered in the course of employment with the Employer
      for the calendar year, prior to any reduction pursuant to a Compensation
      Reduction Agreement. Compensation shall include commissions, overtime,
      bonuses, wage continuation payments to an Employee absent due to illness
      or disability of a short-term nature, the amount of any Employer
      contributions under a flexible benefits program maintained by the Employer
      under Section 125 of the Code pursuant to a salary reduction agreement
      entered into by the Participant under Section 125

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                                                                     Article I -
                                                                     Definitions
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      of the Code, amounts paid or reimbursed by the Employer for Employee
      moving expenses (to the extent not deductible by the Employee), and the
      value of any nonqualified stock option granted to an Employee by the
      Employer (to the extent includable in gross income for the year granted).
      Commencing January 1, 1998, Compensation shall also include elective
      amounts that are not includable in the gross income of the Employee by
      reason of Section 132(f)(4) of the Code.

      Compensation does not include contributions made by the Employer to any
      other pension, deferred compensation, welfare or other employee benefit
      plan, amounts realized from the exercise of a nonqualified stock option or
      the sale of a qualified stock option, and other amounts which receive
      special tax benefits.

      Compensation shall not exceed one hundred sixty thousand dollars
      ($160,000) for the 1997, 1998 and 1999 Plan Years and one hundred seventy
      thousand dollars ($170,000) for the 2000 and 2001 Plan Years, adjusted in
      multiples of ten thousand dollars ($10,000) for increases in the
      cost-of-living as prescribed by the Secretary of the Treasury under
      Section 401(a)(17)(B) of the Code. For purposes of this Section 1.15, if
      the Plan Year in which a Participant's Compensation is being made is less
      than twelve (12) calendar months, the amount of Compensation taken into
      account for such Plan Year shall be the adjusted amount, as prescribed by
      the Secretary of the Treasury under Section 401(a)(17) of the Code, for
      such Plan Year, multiplied by a fraction, the numerator of which is the
      number of months taken into account for such Plan Year and the denominator
      of which is twelve (12). In determining the dollar limitation hereunder,
      compensation received from any Affiliated Employer shall be recognized as
      Compensation.

1.16  Compensation Reduction Agreement means an agreement between the Employer
      and an Eligible Employee whereby the Eligible Employee agrees to reduce
      his Compensation during the applicable payroll period by an amount equal
      to any whole percentage thereof, to the extent provided in Section 3.1,
      and the Employer agrees to contribute to the Trust, on behalf of such
      Eligible Employee, an amount equal to the specified reduction in
      Compensation.

1.17  Conversion Date means October 24, 1994, the date of conversion of the
      Employer from mutual to stock ownership.

1.18  Disability means a physical or mental condition, determined after review
      of those medical reports deemed satisfactory for this purpose, which
      renders the Participant totally and permanently incapable of engaging in
      any substantial gainful employment based on his education, training and
      experience.

1.19  Discretionary Employer Contribution Account means the separate, individual
      account established on behalf of a Participant to which Discretionary
      Employer Contributions, if any, are credited, together with all earnings
      and appreciation thereon, and against which are charged any

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                                                                     Article I -
                                                                     Definitions
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      withdrawals, loans and other distributions made from such account, as well
      as any losses, depreciation, or expenses allocable to amounts credited to
      such account.

1.20  Discretionary Employer Contributions means the amounts, if any,
      contributed by the Employer on behalf of an Eligible Employee, pursuant to
      Section 3.6.

1.21  Early Retirement Date means the first day of any month coincident with or
      following the Participant's attainment of age sixty (60) and the
      completion of a five (5) year Period of Service.

      Notwithstanding any provisions of the plan to the contrary, if a
      Participant incurs a Termination of Service after having completed a five
      (5) year Period of Service but before attaining age sixty (60), the
      Participant's Early Retirement Date shall be the date as of which the
      Participant attains age sixty (60).

1.22  Effective Date means October 1, 1989.

1.23  Eligible Employee means an Employee who is eligible to participate in the
      Plan pursuant to the provisions of Article II.

1.24  Employee means any person employed by the Employer.

1.25  Employer means Carver Federal Savings Bank and any Participating Affiliate
      or any successor organization which shall continue to maintain the Plan
      set forth herein.

1.26  Employer Resolutions means resolutions adopted by the Board.

1.27  Employer Stock Fund means commencing upon the Conversion Date, the
      Separate Assets consisting of common stock of the Employer which shall be
      maintained in an Investment Account established for such purpose.

1.28  Employment Commencement Date means the date on which an Employee first
      performs an Hour of Service for the Employer upon initial employment or,
      if applicable, upon reemployment.

1.29  ERISA means the Employee Retirement Income Security Act of 1974, as
      amended from time to time.

1.30  Forfeitures means any amounts forfeited pursuant to Section 4.2.

1.31  Hardship means the condition described in Section 7.4.

1.32  Highly Compensated Employee means, with respect to a Plan Year commencing
      January 1, 1997, an Employee or an employee of an Affiliated Employer who
      is such an Employee or employee during the Plan Year for which a
      determination is being made and who:

      (a)   during the Plan Year immediately preceding the Plan Year for which a
            determination is being made, received compensation as defined under
            Section 414(q)(4) of the Code

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                                                                     Article I -
                                                                     Definitions
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            ("Section 414(q) Compensation") from the Employer, in excess of
            eighty thousand dollars ($80,000) and effective for the 2000 Plan
            Year, eighty-five thousand dollars ($85,000), adjusted as prescribed
            by the Secretary of the Treasury under Section 415(d) of the Code,
            or

      (b)   at any time during the Plan Year for which a determination is being
            made or at any time during the Plan Year immediately preceding the
            Plan Year for which a determination is being made, was a
            five-percent owner as described under Section 414(q)(2) of the Code.

      For purposes of subsection (a) above, effective for Plan Years commencing
      after December 31, 1997, Section 414(q) Compensation shall include (A) any
      elective deferral (as defined in Section 402(g)(3) of the Code, and (B)
      any amount which is contributed or deferred by the Employer at the
      election of the Employee and which is not includable in the gross income
      of the Employee by reason of Section 125, 132(f)(4) or 457 of the Code.

      Highly Compensated Employee also means a former Employee who (A) incurred
      a Termination of Service prior to the Plan Year of the determination, (B)
      is not credited with an Hour of Service during the Plan Year of the
      determination and (C) satisfied the requirements of subsection (a) or (b)
      during either the Plan Year of his Termination of Service or any Plan Year
      ending coincident with or subsequent to the Employee's attainment of age
      fifty-five (55).

1.33  Hour of Service means each hour for which an Employee is paid or entitled
      to be paid by the Employer for the performance of duties.

1.34  Investment Accounts means any and all of the investment accounts
      established by Board resolution and presented to the Trustees, for the
      purpose of investing contributions made to the Plan Funds in accordance
      with the provisions of the Agreement or Separate Agreement, as applicable.
      The securities and other property in which contributions to the Investment
      Accounts of the Plan Funds may be invested shall be specified in the
      Agreement or the Separate Agreement, and the rights of the Trustees or
      Separate Agency shall be established in accordance with the provisions of
      such Agreement and Separate Agreement.

1.35  Leased Employee means with respect to Plan Years commencing on and after
      January 1, 1997, any individual (other than an Employee of the Employer or
      an employee of an Affiliated Employer) who, pursuant to an agreement
      between the Employer or any Affiliated Employer and any other person
      ("leasing organization"), has performed services for the Employer or any
      Affiliated Employer on a substantially full-time basis for a period of at
      least one (1) year, and such services are performed under the primary
      direction of and control by the Employer or any Affiliated Employer. A
      determination as to whether a Leased Employee shall be treated as an
      Employee of the Employer or an Affiliated Employer shall be made as
      follows: a Leased Employee shall not be considered an Employee of the
      Employer if: (a) such employee is a participant in a money purchase
      pension plan providing (i) a nonintegrated Employer contribution rate of
      at least ten percent (10%) of compensation, as defined in Section
      415(c)(3)

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                                                                     Definitions
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      of the Code, however, including amounts contributed pursuant to a
      compensation reduction agreement which are excludable from the employee's
      gross income under Section 125, Section 402(e)(3), Section 402(h)(1)(B) or
      Section 403(b) of the Code, and effective January 1, 1998, including
      elective amounts that are excludable from the gross income of an Employee
      by reason of Section 132(f)(4) of the Code; (ii) immediate plan
      participation; and (iii) full and immediate vesting; and (b) Leased
      Employees do not constitute more than twenty percent (20%) of the
      Employer's Non-Highly Compensated Employees.

1.36  Matching Contribution Account means the separate, individual account
      established on behalf of a Participant to which the Matching Contributions
      made on such Participant's behalf are credited, together with all earnings
      and appreciation thereon, and against which are charged any withdrawals,
      loans and other distributions made from such account and any losses,
      depreciation or expenses allocable to amounts credited to such account.

1.37  Matching Contributions means the contributions made by the Employer
      pursuant to Section 3.4.

1.38  Named Fiduciaries means the Trustees, the Committee, the Separate Agency
      and such other parties who are designated by the Sponsoring Employer to
      control and manage the operation and administration of the Plan.

1.39  Net Value means the value of an Employee's Accounts as determined as of
      the Valuation Date coincident with or next following the event requiring
      such determination.

1.40  Nonelective Employer Contribution Account means the separate, individual
      account established on behalf of a Participant to which Nonelective
      Employer Contributions, if any, made on such Participant's behalf are
      credited, together with all earnings and appreciation thereon, and against
      which are charged any withdrawals, loans and other distributions made from
      such account and any losses, depreciation or expenses allocable to amounts
      credited to such account.

1.41  Nonelective Employer Contributions means the contributions made by the
      Employer pursuant to Section 3.13.

1.42  Non-Highly Compensated Employee means, with respect to a Plan Year, an
      Employee who is not a Highly Compensated Employee.

1.43  Normal Retirement Age means the date an Employee attains age sixty-five
      (65).

1.44  Normal Retirement Date means the first day of the month coincident with or
      next following the Participant's Normal Retirement Age.

1.45  One Year Period of Severance means, a twelve (12) consecutive month period
      following an Employee's Termination of Service with the Employer during
      which the Employee did not perform an Hour of Service.

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                                                                     Definitions
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      Notwithstanding the foregoing, if an Employee is absent from employment
      for maternity or paternity reasons, such absence during the twenty-four
      (24) month period commencing on the first date of such absence shall not
      constitute a One Year Period of Severance. An absence from employment for
      maternity or paternity reasons means an absence (a) by reason of pregnancy
      of the Employee, or (b) by reason of a birth of a child of the Employee,
      or (c) by reason of the placement of a child with the Employee in
      connection with the adoption of such child by such Employee, or (d) for
      purposes of caring for such child for a period beginning immediately
      following such birth or placement.

1.46  Participant means an Eligible Employee who participates in accordance with
      the provisions of Section 2.3, and whose participation in the Plan has not
      been terminated in accordance with the provisions of Section 2.4.

1.47  Participating Affiliate means any corporation that is a member of a
      controlled group of corporations (within the meaning of Section 414(b) of
      the Code) of which the Sponsoring Employer is a member and any
      unincorporated trade or business that is a member of a group of trades or
      businesses under common control (within the meaning of Section 414(c) of
      the Code) of which the Sponsoring Employer is a member, which, with the
      prior approval of the Sponsoring Employer and subject to such terms and
      conditions as may be imposed by such Sponsoring Employer and the Trustees,
      shall adopt this Plan in accordance with the provisions of Section 13.8
      and the Agreement. Such entity shall continue to be a Participating
      Affiliate until such entity terminates its participation in the Plan in
      accordance with Section 13.8.

1.48  Period of Service means a period commencing with an Employee's Employment
      Commencement Date and ending on the date such Employee first incurs a
      Termination of Service.

      Notwithstanding the foregoing, the period between the first and second
      anniversary of the first date of a maternity or paternity absence
      described under Section 1.45 shall not be included in determining a Period
      of Service.

      A period during which an individual was not employed by the Employer shall
      nevertheless be deemed to be a Period of Service if such individual
      incurred a Termination of Service and:

      (a)   such Termination of Service was the result of resignation, discharge
            or retirement and such individual is reemployed by the Employer
            within one (1) year after such Termination of Service; or

      (b)   such Termination of Service occurred when the individual was
            otherwise absent for less than one (1) year and he was reemployed by
            the Employer within one (1) year after the date such absence began.

      All Periods of Service not disregarded under Sections 2.5 and 4.3 shall be
      aggregated.

--------------------------------------------------------------------------------
787                                   9              Carver Federal Savings Bank
<PAGE>

                                                                     Article I -
                                                                     Definitions
--------------------------------------------------------------------------------

      Wherever used in the Plan, a Period of Service means the quotient obtained
      by dividing the days in all Periods of Service not disregarded hereunder
      by three hundred sixty-five (365) and disregarding any fractional
      remainder.

1.49  Plan means the Carver Federal Savings Bank 401(k) Savings Plan in RSI
      Retirement Trust, as herein restated and as it may be amended from time to
      time. The Plan shall be a Plan of Partial Participation as defined under
      the Agreement.

1.50  Plan Administrator means the person or persons who have been designated as
      such by the Employer in accordance with the provisions of Section 9.4.

1.51  Plan Funds means the assets of the Plan held in the Trust Fund and
      Separate Assets held under any Separate Agreement.

1.52  Plan Year means the calendar year.

1.53  Postponed Retirement Date means the first day of the month coincident with
      or next following a Participant's date of actual retirement which occurs
      after his Normal Retirement Date.

1.54  Prior Plan means the Carver Federal Savings Bank 401(k) Savings Plan in
      RSI Retirement Trust as in effect on the date immediately preceding the
      Restatement Date.

1.55  Qualified Nonelective Contributions means contributions, other than
      Matching Contributions and Discretionary Employer Contributions, made by
      the Employer, which (a) Participants may not elect to receive in cash in
      lieu of their being contributed to the Plan; (b) are one hundred percent
      (100%) nonforfeitable when made; and (c) are not distributable under the
      terms of the Plan to Participants or their Beneficiaries until the
      earliest of:

      (i)   the Participant's death, Disability or separation from service for
            other reasons;

      (ii)  the Participant's attainment of age fifty-nine and one-half
            (59-1/2); or

      (iii) termination of the Plan.

      Special Contributions defined under Section 1.63 are Qualified Nonelective
      Contributions.

1.56  Restatement Date means January 1, 1997.

1.57  Retirement Date means the Participant's Normal Retirement Date, Early
      Retirement Date or Postponed Retirement Date, whichever is applicable.

1.58  Rollover Contribution means (a) a contribution to the Plan of money
      received by an Employee from a qualified plan or (b) a contribution to the
      Plan of money transferred directly from another qualified plan on behalf
      of the Employee, which the Code permits to be rolled over into the Plan.

--------------------------------------------------------------------------------
787                                  10              Carver Federal Savings Bank
<PAGE>

                                                                     Article I -
                                                                     Definitions
--------------------------------------------------------------------------------

1.59  Rollover Contribution Account means the separate, individual account
      established on behalf of an Employee to which his Rollover Contributions
      are credited together with all earnings and appreciation thereon, and
      against which are charged any withdrawals, loans and other distributions
      made from such account and any losses, depreciation or expenses allocable
      to amounts credited to such account.

1.60  Separate Agency means any trustee holding Plan Funds under a Separate
      Agreement.

1.61  Separate Agreement means the trust agreement governing the investment and
      administration of any Separate Assets. Such Separate Agreement shall be
      incorporated herein and constitute a part of the Plan.

1.62  Separate Assets means assets of the Plan as described in Article V which
      are held in a trust other than the Trust.

1.63  Special Contributions means the contributions made by the Employer
      pursuant to Section 3.5. Special Contributions are Qualified Nonelective
      Contributions as defined under Section 1.55.

1.64  Sponsoring Employer means Carver Federal Savings Bank or any successor
      organization which shall continue to maintain the Plan set forth herein.

1.65  Spouse means a person to whom the Employee was legally married and which
      marriage had not been dissolved by formal divorce proceedings that had
      been completed prior to the date on which payments to the Employee are
      scheduled to commence.

1.66  Termination of Service means the earlier of (a) the date on which an
      Employee's service is terminated by reason of his resignation, retirement,
      discharge, death or Disability or (b) the first anniversary of the date on
      which such Employee's active service ceases for any other reason.

      Service in the Armed Forces of the United States of America shall not
      constitute a Termination of Service but shall be considered to be a period
      of employment by the Employer provided that (i) such military service is
      caused by war or other emergency or the Employee is required to serve
      under the laws of conscription in time of peace, (ii) the Employee returns
      to employment with the Employer within six (6) months following discharge
      from such military service and (iii) such Employee is reemployed by the
      Employer at a time when the Employee had a right to reemployment at his
      former position or substantially similar position upon separation from
      such military duty in accordance with seniority rights as protected under
      the laws of the United States of America. Notwithstanding any provision of
      the Plan to the contrary,[ effective December 12, 1994, contributions,
      benefits and calculation of Periods of Service with respect to qualified
      military service will be provided in accordance with Section 414(u) of the
      Code

      A leave of absence granted to an Employee by the Employer shall not
      constitute a Termination of Service provided that the Participant returns
      to the active service of the Employer at the expiration of any such period
      for which leave has been granted.

--------------------------------------------------------------------------------
787                                  11              Carver Federal Savings Bank
<PAGE>

                                                                     Article I -
                                                                     Definitions
--------------------------------------------------------------------------------

      Notwithstanding the foregoing, an Employee who is absent from service with
      the Employer beyond the first anniversary of the first date of his absence
      for maternity or paternity reasons set forth in Section 1.45 shall incur a
      Termination of Service for purposes of the Plan on the second anniversary
      of the date of such absence.

1.67  Trust means the trust established or maintained under the Agreement with
      respect to the Plan.

1.68  Trust Fund means the assets held in accordance with the Agreement.

1.69  Trustees means the Trustees of the RSI Retirement Trust.

1.70  Units means the units of measure of an Employee's proportionate undivided
      beneficial interest in one or more of the Investment Accounts, valued as
      of the close of business.

1.71  Valuation Date means each business day.

--------------------------------------------------------------------------------
787                                  12              Carver Federal Savings Bank
<PAGE>

                                                                    Article II -
                                                   Eligibility and Participation
--------------------------------------------------------------------------------

                                   ARTICLE II -
                          ELIGIBILITY AND PARTICIPATION

2.1   Eligibility

      (a)   Every Employee who was a Participant in the Prior Plan immediately
            prior to the Restatement Date shall continue to be a Participant on
            the Restatement Date.

      (b)   Every other Employee who is not excluded under the provisions of
            Section 2.2 shall become an Eligible Employee upon satisfying all of
            the following conditions:

            (i)   completion of a Period of Service of one (1) year;

            (ii)  attainment of age twenty-one (21); and

            (iii) classification as a salaried Employee.

      (c)   For purposes of determining (i) if an Employee completed a Period of
            Service of one (1) year and (ii) Periods of Service pursuant to
            Section 2.5, employment with (A) an Affiliated Employer and (B)
            effective October 1, 1989 and November 19, 1990 respectively, prior
            employment with either Crossland Savings, FSB or Nassau Federal
            Savings and Loan Association, shall be deemed employment with the
            Employer.

      (d)   An Employee who otherwise satisfies the requirements of this Section
            2.1 and who is no longer excluded under the provisions of Section
            2.2 shall immediately become an Eligible Employee.

2.2   Ineligible Employees

      The following classes of Employees are ineligible to participate in the
      Plan:

      (a)   Employees compensated on an hourly basis;

      (b)   Leased Employees;

      (c)   Employees in a unit of Employees covered by a collective bargaining
            agreement with the Employer pursuant to which employee benefits were
            the subject of good faith bargaining and which agreement does not
            expressly provide that Employees of such unit be covered under the
            Plan; and

      (d)   Owner-Employees. For purposes of this Section 2.2(d), Owner-Employee
            means an individual who is a sole proprietor or who is a partner
            owning more than ten percent (10%) of either the capital or profits
            interest of a partnership which adopted the Plan.

--------------------------------------------------------------------------------
787                                  13              Carver Federal Savings Bank
<PAGE>

                                                                    Article II -
                                                   Eligibility and Participation
--------------------------------------------------------------------------------

2.3   Participation

      Participation in the Plan is voluntary with respect to an election for
      Before-Tax Contributions. An Eligible Employee may elect to make
      Before-Tax Contributions in accordance with Section 3.1, as of the first
      full payroll period of any calendar month with or next following
      satisfaction of the eligibility requirements set forth in Section 2.1. In
      addition, an Eligible Employee will participate in the Plan upon
      satisfaction of the eligibility requirements set forth in Section 2.1,
      with respect to eligibility for (a) Special Contributions in accordance
      with Section 3.5 or (b) Discretionary Employer Contributions in accordance
      with Section 3.9 or (c) Nonelective Employer Contributions in accordance
      with Section 3.13.

      An election for Before-Tax Contributions shall be evidenced by completing
      and filing the form prescribed by the Committee not less than ten (10)
      days prior to the date participation is to commence. Such form shall
      include, but not be limited to, a Compensation Reduction Agreement, a
      designation of Beneficiary, and an investment direction as described in
      Section 6.1. By completing and filing such form, the Eligible Employee
      authorizes the Employer to make the applicable payroll deductions from
      Compensation, commencing on the first applicable payday coincident with or
      next following the effective date of the Eligible Employee's election to
      participate. In the case of Special Contributions or Discretionary
      Employer Contributions and effective January 1, 2001, Nonelective Employer
      Contributions, a Participant shall complete a form prescribed by the
      Committee, designating a Beneficiary and an investment direction as
      described in Section 6.1.

      Effective January 1, 2001, for any Plan Year in which a Nonelective
      Employer Contribution is made in accordance with Section 3.13, all
      Employees who meet the requirements of an Eligible Employee during such
      Plan Year and who are employed by the Employer on the last day of the Plan
      Year shall participate in the Plan.

2.4   Termination of Participation

      Participation in the Plan shall terminate on the earlier of the date a
      Participant dies or the entire vested interest in the Net Value of such
      Participant's Accounts has been distributed.

2.5   Eligibility upon Reemployment

      If an Employee incurs a One Year Period of Severance prior to satisfying
      the eligibility requirements of Section 2.1, service prior to such One
      Year Period of Severance shall be disregarded and such Employee must
      satisfy the eligibility requirements of Section 2.1 as a new Employee.

      If an Employee incurs a One Year Period of Severance after satisfying the
      eligibility requirements of Section 2.1 and:

      (a)   if such Employee is not vested in any Matching Contributions and/or
            Discretionary Employer Contributions and/or Nonelective Employer
            Contributions, incurs a One Year

--------------------------------------------------------------------------------
787                                  14              Carver Federal Savings Bank
<PAGE>

                                                                    Article II -
                                                   Eligibility and Participation
--------------------------------------------------------------------------------

            Period of Severance and again performs an Hour of Service, the
            Employee shall receive credit for Periods of Service prior to a One
            Year Period of Severance only if the number of consecutive One Year
            Periods of Severance is less than the greater of: (i) five (5) years
            or (ii) the aggregate number of such Employee's Periods of Service
            credited before his One Year Period of Severance. If such former
            Employee's Periods of Service prior to his One Year Period of
            Severance are recredited under this Section 2.5, such former
            Employee shall be eligible to participate immediately upon
            reemployment, provided such Employee is not excluded from
            participating under the provisions of Section 2.2. If such former
            Employee's Periods of Service prior to his One Year Period of
            Severance are not recredited under this Section 2.5, such Employee
            must satisfy the eligibility requirements of Section 2.1 as a new
            Employee;

      (b)   if such Employee is vested in any Matching Contributions and/or
            Discretionary Employer Contributions and/or Nonelective Employer
            Contributions, incurs a One Year Period of Severance and again
            performs an Hour of Service, the Employee shall receive credit for
            Periods of Service prior to his One Year Period of Severance and
            shall be eligible to participate in the Plan immediately upon
            reemployment, provided such Employee is not excluded from
            participating under the provisions of Section 2.2.

2.6   Eligibility Upon Reemployment of Employees Subject to Section 16(b) of the
      Securities Exchange Act of 1934

      Notwithstanding anything contained in the Plan to the contrary, if an
      Employee subject to the provisions of Section 16(b) of the Securities
      Exchange Act of 1934 incurs a Termination of Service and again performs an
      Hour of Service, such Employee shall not be eligible to participate in the
      Plan until the later of: (a) the date which is six (6) months from the
      date such Employee incurred a Termination of Service or (b) the date such
      Employee again performs an Hour of Service with the Employer; provided
      such Employee is not excluded from participating under the provisions of
      Section 2.2.

--------------------------------------------------------------------------------
787                                  15              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

                                  ARTICLE III -
                 CONTRIBUTIONS AND LIMITATIONS ON CONTRIBUTIONS

3.1   Before-Tax Contributions

      The Employer shall make Before-Tax Contributions for each payroll period
      in an amount equal to the amount by which a Participant's Compensation has
      been reduced with respect to such period under his Compensation Reduction
      Agreement. Subject to the limitations set forth in Sections 3.2 and 3.12,
      the amount of reduction authorized by the Eligible Employee shall be
      limited to whole percentages of Compensation and shall not be less than
      one percent (1%) nor greater than fifteen percent (15%). The Before-Tax
      Contributions made on behalf of a Participant shall be credited to such
      Participant's Before-Tax Contribution Account and shall be invested in
      accordance with Article VI of the Plan.

3.2   Limitation on Before-Tax Contributions

      Sections 3.2(a), (b), (c) and (d), below, shall apply with respect to Plan
      Years beginning prior to January 1, 2002. Commencing January 1, 2002, the
      alternative method of meeting the non-discrimination requirements set
      forth in Section 401(k)(12) of the Code shall apply.

      For any year in which the alternative method, referred to above, applies,
      the Employer shall provide each Eligible Employee a comprehensive notice
      of the Employee's rights and obligations under the Plan, written in a
      manner calculated to be understood by the average Eligible Employee. This
      notice will be provided at least thirty (30) days but not more than ninety
      (90) days before the beginning of the Plan Year. In the event the Employee
      becomes an Eligible Employee after the ninetieth (90th) day before the
      beginning of the Plan Year and does not receive the notice for that
      reason, the notice must be provided no more than ninety (90) days before
      the Employee becomes an Eligible Employee, but not later than the date the
      Employee actually becomes an Eligible Employee.

      In addition to any other election periods provided under the Plan, each
      Eligible Employee may make or modify a deferral election during the thirty
      (30)-day period immediately following receipt of the notice described in
      the above paragraph.

      (a)   Commencing January 1, 1997, the percentage of Before-Tax
            Contributions made on behalf of a Participant who is a Highly
            Compensated Employee shall be limited so that the Average Actual
            Deferral Percentage for the group of such Highly Compensated
            Employees for the Plan Year does not exceed the greater of:

            (i)   the Average Actual Deferral Percentage for the group of
                  Eligible Employees who were Non-Highly Compensated Employees
                  for the preceding Plan Year multiplied by 1.25; or

--------------------------------------------------------------------------------
787                                  16              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            (ii)  the Average Actual Deferral Percentage for the group of
                  Eligible Employees who were Non-Highly Compensated Employees
                  for the preceding Plan Year multiplied by two (2); provided,
                  that the difference in the Average Actual Deferral Percentage
                  for eligible Highly Compensated Employees and eligible
                  Non-Highly Compensated Employees does not exceed two percent
                  (2%). Use of this alternative limitation shall be subject to
                  the provisions of Income Tax Regulations issued under Code
                  Section 401(m)(9) regarding the multiple use of the
                  alternative limitation set forth in Sections 401(k) and 401(m)
                  of the Code.

            The preceding Plan Year testing method can only be modified if the
            Plan meets the requirements for changing to current Plan Year
            testing as set forth in Internal Revenue Service Notice 98-1, or any
            successor future guidance issued by the Internal Revenue Service.

            The above subsections (i) and (ii) shall be subject to the
            distribution provisions of the last paragraph of Section 3.12(f).

            If the Average Actual Deferral Percentage for the group of eligible
            Highly Compensated Employees exceeds the limitations set forth in
            the preceding paragraph, the amount of excess Before-Tax
            Contributions for a Highly Compensated Employee shall be determined
            by "leveling" (as hereafter defined), the highest Before-Tax
            Contributions made by Highly Compensated Employees until the Average
            Actual Deferral Percentage test for the group of eligible Highly
            Compensated Employees complies with such limitations. For purposes
            of this paragraph, "leveling" means reducing the Before-Tax
            Contribution of the Highly Compensated Employee with the highest
            Before-Tax Contribution amount to the extent required to:

            (A)   enable the Average Actual Deferral Percentage limitations to
                  be met, or

            (B)   cause such Highly Compensated Employee's Before-Tax
                  Contribution amount to equal the dollar amount of the
                  Before-Tax Contribution of the Highly Compensated Employee
                  with the next highest Before-Tax Contribution amount by
                  distribution of such excess Before-Tax Contributions, as
                  described below, to the Highly Compensated Employee, whose
                  Before-Tax Contributions equal the highest dollar amount,

            and repeating such process until the Average Actual Deferral
            Percentage for the group of eligible Highly Compensated Employees
            complies with the Average Actual Deferral Percentage limitations.

            If Before-Tax Contributions made on behalf of a Participant during
            any Plan Year exceed the maximum amount applicable to a Participant
            as set forth above, any such contributions, including any earnings
            thereon as determined under Section 3.9, shall be characterized as
            Compensation payable to the Participant and shall be paid to the

--------------------------------------------------------------------------------
787                                  17              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            Participant from his Before-Tax Contribution Account no later than
            two and one-half (2-1/2) months after the close of such Plan Year.

            If Before-Tax Contributions during any Plan Year exceed the maximum
            amount applicable to a Participant as set forth above, any Matching
            Contributions, including any earnings thereon as determined under
            Section 3.9, that are attributable to Before-Tax Contributions which
            are returned to the Participant as provided hereunder, shall be
            treated as Forfeitures under Section 4.2.

            In the event that the Plan satisfies the requirements of Section
            401(k), 401(a)(4) or 410(b) of the Code only if aggregated with one
            or more other plans, or if one or more other plans satisfy the
            requirements of Section 401(k), 401(a)(4) or 410(b) of the Code only
            if aggregated with the Plan, then this Section 3.2 shall be applied
            by determining the Actual Deferral Percentages of Eligible Employees
            as if all such plans were a single plan.

            If any Highly Compensated Employee is a Participant in two (2) or
            more cash or deferred arrangements of the Employer, for purposes of
            determining the Actual Deferral Percentage with respect to such
            Highly Compensated Employee, all cash or deferred arrangements shall
            be treated as one (1) cash or deferred arrangement.

      (b)   Before-Tax Contributions under this Plan, and elective deferrals (as
            defined under Section 402(g) of the Code) under all other plans,
            contracts or arrangements of the Employer made on behalf of any
            Participant during the 1997 Plan Year shall not exceed nine thousand
            five hundred dollars ($9,500). During the 1998 and 1999 Plan Years,
            such amount shall be increased to ten thousand dollars ($10,000).
            During the 2000 and 2001 Plan Years, such amount shall be increased
            to ten thousand five hundred dollars ($10,500). For Plan Years
            commencing after December 31, 2001, Before-Tax Contributions and
            elective deferrals (as defined under Section 402(g) of the Code)
            under all other plans, contracts or arrangements of the Employer
            shall be further adjusted as prescribed by the Secretary of the
            Treasury under Section 415(d) of the Code. This Section 3.2(b) shall
            be subject to the distribution provisions of the last paragraph of
            Section 3.12(f).

      (c)   If Before-Tax Contributions made on behalf of a Participant during
            any Plan Year exceed the dollar limitation set forth in subsection
            (b), such contributions, including any earnings thereon as
            determined under Section 3.9, shall be characterized as Compensation
            payable to the Participant and shall be paid to the Participant from
            his Before-Tax Contribution Account no later than April 15th of the
            calendar year following the close of such Plan Year.

            If Before-Tax Contributions during any Plan Year exceed the maximum
            dollar amount applicable to a Participant as set forth in subsection
            (b), any Matching Contributions, including any earnings thereon as
            determined under Section 3.9, that are attributable to

--------------------------------------------------------------------------------
787                                  18              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            Before-Tax Contributions which are returned to the Participant as
            provided hereunder, shall be treated as Forfeitures under Section
            4.2.

      (d)   Subject to the requirements of Sections 401(a) and 401(k) of the
            Code, the maximum amounts under subsections (a) and (b) may differ
            in amount or percentage as between individual Participants or
            classes of Participants, and any Compensation Reduction Agreement
            may be terminated, amended, or suspended without the consent of any
            such Participant or Participants in order to comply with the
            provisions of such subsections (a) and (b).

3.3   Changes in Before-Tax Contributions

      Unless (a) an election is made to the contrary, or (b) a Participant
      receives a Hardship distribution pursuant to Section 7.4(c)(iii), the
      percentage of Before-Tax Contributions made under Section 3.1 shall
      continue in effect so long as the Participant has a Compensation Reduction
      Agreement in force. A Participant may, by completing the applicable form,
      prospectively increase or decrease the rate of Before-Tax Contributions
      made on his behalf to any of the percentages authorized under Section 3.1
      or suspend Before-Tax Contributions without withdrawing from participation
      in the Plan. Such form must be filed at least ten (10) days prior to the
      first day of the payroll period with respect to which such change is to
      become effective. A Participant who has Before-Tax Contributions made on
      his behalf suspended may resume such contributions by completing and
      filing the applicable form. Not more often than once in any calendar
      quarter may an election be made which would prospectively increase,
      decrease, suspend or resume Before-Tax Contributions made on behalf of a
      Participant. A Participant may terminate his Before-Tax Contributions at
      any time.

      Notwithstanding the foregoing, a Participant who receives a Hardship
      distribution pursuant to Section 7.4(c)(iii) shall have his Compensation
      Reduction Agreement deemed null and void and all Before-Tax Contributions
      made on behalf of such Participant shall be suspended until the later to
      occur of: (i) twelve (12) months after receipt of the Hardship
      distribution and (ii) the first payroll period which occurs ten (10) days
      following the completion and filing of a Compensation Reduction Agreement
      authorizing the resumption of Before-Tax Contributions to be made on his
      behalf. Before-Tax Contributions following a Hardship distribution made
      pursuant to Section 7.4(c)(iii) shall be subject to the following
      limitations:

      (A)   Before-Tax Contributions for the Participant's taxable year
            immediately following the taxable year of the Hardship distribution
            shall not exceed the applicable limit under Section 402(g) of the
            Code for such next taxable year less the amount of such
            Participant's Before-Tax Contributions for the taxable year of the
            Hardship distribution, and

      (B)   the percentage of Before-Tax Contributions for the twelve (12) month
            period following the mandatory twelve (12) month suspension period
            shall not exceed the percentage of

--------------------------------------------------------------------------------
787                                  19              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            Before-Tax Contributions made on behalf of the Participant as set
            forth in the last Compensation Reduction Agreement in effect prior
            to the Hardship distribution.

      Before-Tax Contributions based on Compensation for the period during which
      such contributions had been suspended or decreased may not be made up at a
      later date.

3.4   Matching Contributions

      (a)   The Employer shall make contributions on behalf of each Participant
            in an amount equal to fifty percent (50%) of such Participant's
            Before-Tax Contribution. Commencing January 1, 2002, the Employer
            shall make contributions on behalf of each Participant, in an amount
            equal to one hundred percent (100%) of such Participant's Before-Tax
            Contributions, up to the first four percent (4%) of the
            Participant's Compensation.

      (b)   Matching Contributions shall be credited to the Participant's
            Matching Contribution Account and shall be invested in accordance
            with Article VI of the Plan.

      (c)   If a Participant terminates his Before-Tax Contributions, Matching
            Contributions attributable to such contributions will also cease. If
            Before-Tax Contributions are suspended, the Matching Contributions
            attributable to such contributions will be suspended for the same
            period. Subject to the limitations set forth in subsection (a), if
            Before-Tax Contributions are increased or decreased, Matching
            Contributions attributable to such contributions will be increased
            or decreased during the same period. Matching Contributions for the
            period during which Before-Tax Contributions had been suspended or
            decreased may not be made up at a later date.

      (d)   Matching Contributions may be reviewed and modified by the
            Employer's Board from time to time. Commencing January 1, 2002, this
            Section 3.4(d) shall no longer apply.

3.5   Special Contributions

      In addition to any other contributions, the Employer may, in its
      discretion, make Special Contributions for a Plan Year to the Before-Tax
      Contribution Account of any Eligible Employees. Such Special Contributions
      may be limited to the amount necessary to insure that the Plan complies
      with the requirements of Section 401(k) of the Code. The Special
      Contributions made on behalf of a Participant shall be invested in
      accordance with Article VI of the Plan.

      The Employer may provide that Special Contributions be made only on behalf
      of each Eligible Employee who is a Non-Highly Compensated Employee on the
      last day of the Plan Year. Such Special Contributions shall be allocated
      in proportion to each such Eligible Employee's Compensation for the Plan
      Year.

      Any other provision of the Plan to the contrary notwithstanding, no
      Matching Contributions shall be made with respect to any Special
      Contributions.

--------------------------------------------------------------------------------
787                                  20              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

3.6   Discretionary Employer Contributions

      Subject to the limitations of Section 3.12, the Employer may, in its sole
      and absolute discretion, make Discretionary Employer Contributions to the
      Plan for a Plan Year. Discretionary Employer Contributions shall be
      allocated on an annual basis in an amount up to fifteen percent (15%)
      determined by the Board, as a percentage of the Compensation of each
      Eligible Employee who is in the employ of the Employer on the last day of
      the Plan Year.

      Notwithstanding the foregoing, an Eligible Employee who incurs a
      Termination of Service prior to the last day of the Plan Year for reasons
      of death, Disability or retirement on a Retirement Date shall receive a
      Discretionary Employer Contribution pursuant to the foregoing paragraph,
      for the Plan Year up to the date of his Termination of Service.

      The Discretionary Employer Contributions allocated to each Eligible
      Employee shall be credited to such Participant's Discretionary Employer
      Contribution Account and shall be invested in accordance with Article VI
      of the Plan. Any and all withdrawals, distributions or payments from a
      Participant's Discretionary Employer Contribution Account shall be made in
      accordance with Article VII, or Article VIII of the Plan, whichever is
      applicable.

3.7   Limitation on Matching Contributions

      This Section 3.7 shall apply with respect to Plan Years beginning prior to
      January 1, 2002. Commencing January 1, 2002, the alternative method of
      meeting the non-discrimination requirements set forth in Section
      401(m)(11) of the Code shall apply.

      Commencing January 1, 1997, the Actual Contribution Percentage made on
      behalf of a Participant who is a Highly Compensated Employee shall be
      limited so that the Average Actual Contribution Percentage for the group
      of such Highly Compensated Employees for the Plan Year shall not exceed
      the greater of:

      (a)   the Average Actual Contribution Percentage for the group of Eligible
            Employees who were Non-Highly Compensated Employees for the
            preceding Plan Year multiplied by 1.25; or

      (b)   the Average Actual Contribution Percentage for the group of Eligible
            Employees who were Non-Highly Compensated Employees for the
            preceding Plan Year, multiplied by two (2); provided, that the
            difference in the Average Actual Contribution Percentage for Highly
            Compensated Employees and Non-Highly Compensated Employees does not
            exceed two percent (2%). Use of this alternative limitation shall be
            subject to the provisions of Income Tax Regulations issued under
            Code Section 401(m)(9) regarding the multiple use of the alternative
            limitation set forth in Sections 401(k) and 401(m) of the Code.

--------------------------------------------------------------------------------
787                                  21              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      The preceding Plan Year testing method can only be modified if the Plan
      meets the requirements for changing to current Plan Year testing as set
      forth in Internal Revenue Service Notice 98-1, or any successor future
      guidance issued by the Internal Revenue Service.

      The above subsections (a) and (b) shall be subject to the distribution
      provisions of the last paragraph of Section 3.12(f).

      If the Average Actual Contribution Percentage for the group of eligible
      Highly Compensated Employees exceeds the limitations set forth in the
      preceding paragraph, the amount of excess Matching Contributions for a
      Highly Compensated Employee shall be determined by "leveling" (as
      hereafter defined) the highest Matching Contributions until the Average
      Actual Contribution Percentage test for the group of eligible Highly
      Compensated Employees complies with such limitations. For purposes of this
      paragraph, "leveling" means reducing the Matching Contributions made on
      behalf of the Highly Compensated Employee with the highest Matching
      Contribution amount to the extent required to:

      (i)   enable the Average Actual Contribution Percentage limitations to be
            met, or

      (ii)  cause such Highly Compensated Employee's Matching Contribution
            amount to equal the dollar amount of the Matching Contribution made
            on behalf of the Highly Compensated Employee with the next highest
            Matching Contribution amount

      and repeating such process until the Average Actual Contribution
      Percentage for the group of eligible Highly Compensated Employees complies
      with the Average Actual Contribution Percentage limitations.

      If Matching Contributions during any Plan Year exceed the maximum amount
      applicable to a Participant as set forth above, any such contributions,
      including any earnings thereon as determined under Section 3.9, shall,
      whether or not vested, be treated as Forfeitures under Section 4.2.

      In the event that the Plan satisfies the requirements of Section 401(m),
      401(a)(4) or 410(b) of the Code only if aggregated with one or more other
      plans, or if one or more other plans satisfy the requirements of Section
      401(m), 401(a)(4) or 410(b) of the Code only if aggregated with the Plan,
      then this Section 3.7 shall be applied by determining the Actual
      Contribution Percentages of Eligible Employees as if all such plans were a
      single plan.

      If any Highly Compensated Employee is a Participant in two (2) or more
      plans of the Employer, for purposes of determining the Actual Contribution
      Percentage with respect to such Highly Compensated Employee, all such
      plans shall be treated as one (1) plan.

--------------------------------------------------------------------------------
787                                  22              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

3.8   Aggregate Limit; Multiple Use of Alternative Limitation

      This Section 3.8 shall apply with respect to Plan Years beginning prior to
      January 1, 2002. Commencing January 1, 2002, the alternative method of
      meeting the non-discrimination requirements set forth in Sections
      401(k)(12) and 401(m)(11) of the Code shall apply.

      Commencing January 1, 1997, multiple use of the alternative limitation in
      determining the Average Actual Deferral Percentage and Average Actual
      Contribution Percentage shall not be permitted.

      Multiple use of the alternative limitation occurs if, for the group of
      Eligible Employees who are Highly Compensated Employees, the sum of the
      Average Actual Deferral Percentage and the Average Actual Contribution
      Percentage exceeds the Aggregate Limit.

      For purposes of this Section 3.8, Aggregate Limit shall mean the greater
      of (a) or (b), where (a) and (b) are as follows:

      (a)   the sum of:

            (i)   one hundred twenty-five percent (125%) of the greater of:

                  (A)   the Average Actual Deferral Percentage for the group of
                        Eligible Employees who were Non-Highly Compensated
                        Employees for the preceding Plan Year; or

                  (B)   the Average Actual Contribution Percentage for the group
                        of Eligible Employees who were Non-Highly Compensated
                        Employees for the preceding Plan Year; and

            (ii)  two (2) plus the lesser of subsection (a)(i)(A) or (a)(i)(B).
                  In no event shall this amount exceed two hundred percent
                  (200%) of the lesser of subsection (a)(i)(A) or (a)(i)(B).

      (b)   the sum of:

            (i)   one hundred twenty-five percent (125%) of the lesser of:

                  (A)   the Average Actual Deferral Percentage for the group of
                        Eligible Employees who were Non-Highly Compensated
                        Employees for the preceding Plan Year; or

                  (B)   the Average Actual Contribution Percent age for the
                        group of Eligible Employees who were Non-Highly
                        Compensated Employees for the preceding Plan Year; and

--------------------------------------------------------------------------------
787                                  23              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            (ii)  two (2) plus the greater of subsection (b)(i)(A) or (b)(i)(B).
                  In no event shall this amount exceed two hundred percent
                  (200%) of the greater of subsection (b)(i)(A) or (b)(i)(B).

      If multiple use of the alternative limitation occurs, the excess
      Before-Tax Contributions for Highly Compensated Employees under the Plan
      shall be reduced in accordance with Section 3.2(a).

3.9   Interest on Excess Contributions

      In the event Before-Tax Contributions and/or Matching Contributions made
      on behalf of a Participant during a Plan Year exceed the maximum allowable
      amount as described in Section 3.2(a), 3.2(b) or 3.7 ("Excess
      Contributions") and such Excess Contributions and earnings thereon are
      payable to the Participant under the applicable provisions of the Plan,
      earnings on such Excess Contributions for the period commencing with the
      first day of the Plan Year in which the Excess Contributions were made and
      ending with the date of payment to the Participant ("Allocation Period")
      shall be determined in accordance with the provisions of this Section 3.9.

      The earnings allocable to excess Before-Tax Contributions for an
      Allocation Period shall be equal to the sum of (a) plus (b) where (a) and
      (b) are determined as follows:

      (a)   The amount of earnings attributable to the Participant's Before-Tax
            Contribution Account for the Plan Year multiplied by a fraction, the
            numerator of which is the excess Before-Tax Contributions and
            Special Contributions for the Plan Year, and the denominator of
            which is the sum of (i) the Net Value of the Participant's
            Before-Tax Contribution Account as of the last day of the
            immediately preceding Plan Year and (ii) the contributions
            (including the Excess Contributions) made to the Before-Tax
            Contribution Account on the Participant's behalf during such Plan
            Year.

      (b)   The amount of earnings attributable to the Participants Before-Tax
            Contribution Account for the period commencing with the first day of
            the Plan Year in which payment is made to the Participant and ending
            with the date of payment to the Participant multiplied by a
            fraction, the numerator of which is the excess Before-Tax
            Contributions and Special Contributions made to the Before-Tax
            Contribution Account on the Participant's behalf during the Plan
            Year immediately preceding the Plan Year in which the payment is
            made to the Participant, and the denominator of which is the Net
            Value of the Participant's Before-Tax Contribution Account on the
            first day of the Plan Year in which the payment is made to the
            Participant.

      The earnings allocable to excess Matching Contributions for an Allocation
      Period shall be equal to the sum of (A) and (B) where (A) and (B) are
      determined as follows:

--------------------------------------------------------------------------------
787                                  24              Carver Federal Savings Bank
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                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      (A)   The amount of earnings attributable to the Participants Matching
            Contribution Account for the Plan Year multiplied by a fraction, the
            numerator of which is the excess Matching Contributions for the Plan
            Year, and the denominator of which is the sum of (I) the Net Value
            of the Participant's Matching Contribution Account as of the last
            day of the immediately preceding Plan Year and (II) the
            contributions (including the Excess Contributions) made to the
            Matching Contribution Account on the Participant's behalf during
            such Plan Year.

      (B)   The amount of earnings attributable to the Participants Matching
            Contribution Account for the period commencing with the first day of
            the Plan Year in which payment is made to the Participant and ending
            with the date of payment to the Participant multiplied by a
            fraction, the numerator of which is the excess Matching
            Contributions made to the Matching Contribution Account on the
            Participant's behalf during the Plan Year immediately preceding the
            Plan Year in which the payment is made to the Participant, and the
            denominator of which is the Net Value of the Participant's Matching
            Contribution Account on the first day of the Plan Year in which the
            payment is made to the Participant.

3.10  Payment of Contributions to the Trust and Separate Agency

      As soon as possible after each payroll period, but not less often than
      once a month, the Employer shall deliver (a) to the Trustees: (i) the
      Before-Tax Contributions required to be made to the Trust during such
      payroll period under the applicable Compensation Reduction Agreements and
      (ii) the amount of all Matching Contributions required to be made to the
      Trust for such payroll period and (b) to the Separate Agency: (i) the
      Before-Tax Contributions required to be made to the Separate Agency during
      such payroll period under the applicable Compensation Reduction Agreement,
      and (ii) the amount of all Matching Contributions required to be made to
      the Separate Agency during such payroll period.

      Special Contributions, Discretionary Employer Contributions and effective
      January 1, 2001, Nonelective Employer Contributions to the Trust and to
      the Separate Agency shall be forwarded by the Employer to the Trustees and
      to the Separate Agency no later than the time for filing the Employer's
      federal income tax return, plus any extensions thereon, for the Plan Year
      to which they are attributable.

3.11  Rollover Contributions

      Subject to such terms and conditions as may from time to time be
      established by the Committee, the Trustees and the Separate Agency, an
      Employee, whether or not a Participant, may contribute a Rollover
      Contribution to the Plan Fund; provided, however, that such Employee shall
      submit a written certification, in form and substance satisfactory to the
      Committee, that the contribution qualifies as a Rollover Contribution. The
      Committee shall be entitled to rely on such certification and shall accept
      the contribution on behalf of the Trustees.

--------------------------------------------------------------------------------
787                                  25              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      Rollover Contributions shall be credited to an Employee's Rollover
      Contribution Account and shall be invested in accordance with Article VI
      of the Plan.

3.12  Section 415 Limits on Contributions

      (a)   For purposes of this Section 3.12, the following terms and phrases
            shall have the meanings hereafter ascribed to them:

            (i)   "Annual Additions" shall mean the sum of the following amounts
                  credited to a Participant's Accounts for the Limitation Year:
                  (A) Employer contributions, including Before-Tax
                  Contributions, Matching Contributions, Special Contributions,
                  Discretionary Employer Contributions and Nonelective Employer
                  Contributions; (B) any Employee contributions; (C)
                  forfeitures; and (D) (1) amounts allocated to an individual
                  medical account, as defined in Section 415(l)(2) of the Code,
                  which is part of a pension or annuity plan maintained by the
                  Employer and (2) amounts derived from contributions, paid or
                  accrued, which are attributable to post-retirement medical
                  benefits allocated to the separate account of a key employee,
                  as defined in Section 419A(d)(3) of the Code, under a welfare
                  benefit fund as defined in Section 419(e) of the Code,
                  maintained by the Employer are treated as Annual Additions.
                  Annual Additions include the following contributions credited
                  to a Participant's Accounts for the Limitation Year,
                  regardless of whether such contributions have been distributed
                  to the Participant:

                  (I)   Before-Tax Contributions which exceed the limitations
                        set forth in Section 3.2(a);

                  (II)  Before-Tax Contributions made on behalf of a Highly
                        Compensated Employee which exceed the limitations set
                        forth in Section 3.2(b); and

                  (III) Matching Contributions made on behalf of a Highly
                        Compensated Employee which exceed the limitations set
                        forth in Section 3.7.

            (ii)  "Current Accrued Benefit" shall mean a Participant's annual
                  accrued benefit under a defined benefit plan, determined in
                  accordance with the meaning of Section 415(b)(2) of the Code,
                  as if the Participant had separated from service as of the
                  close of the last Limitation Year beginning before January 1,
                  1987. In determining the amount of a Participant's Current
                  Accrued Benefit, the following shall be disregarded:

                  (A)   any change in the terms and conditions of the defined
                        benefit plan after May 5, 1986; and

                  (B)   any cost of living adjustment occurring after May 5,
                        1986.

--------------------------------------------------------------------------------
787                                  26              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

            (iii) "Defined Benefit Plan" and "Defined Contribution Plan" shall
                  have the meanings set forth in Section 415(k) of the Code.

            (iv)  "Defined Benefit Plan Fraction" for a Limitation Year shall
                  mean a fraction, (A) the numerator of which is the aggregate
                  projected annual benefit (determined as of the last day of the
                  Limitation Year) of the Participant under all defined benefit
                  plans (whether or not terminated) maintained by the Employer,
                  and (B) the denominator of which is the lesser of: (I) the
                  product of 1.25 (or such adjustment as required under Section
                  12.4) and the dollar limitation in effect under Section
                  415(b)(1)(A) of the Code, adjusted as prescribed by the
                  Secretary of the Treasury under Section 415(d) of the Code, or
                  (II) the product of 1.4 and the amount which may be taken into
                  account with respect to such Participant under Section
                  415(b)(1)(B) of the Code for such Limitation Year.
                  Notwithstanding the above, if the Participant was a
                  participant in one or more defined benefit plans of the
                  Employer in existence on May 6, 1986, the dollar limitation of
                  the denominator of this fraction will not be less than the
                  Participant's Current Accrued Benefit.

            (v)   "Defined Contribution Plan Fraction" for a Limitation Year
                  shall mean a fraction, (A) the numerator of which is the sum
                  of the Participant's Annual Additions under all defined
                  contribution plans (whether or not terminated) maintained by
                  the Employer for the current year and all prior Limitation
                  Years (including annual additions attributable to the
                  Participant's nondeductible employee contributions to all
                  defined benefit plans (whether or not terminated) maintained
                  by the Employer), and (B) the denominator of which is the sum
                  of the maximum aggregate amounts for the current year and all
                  prior Limitation Years with the Employer (regardless of
                  whether a defined contribution plan was maintained by the
                  Employer). "Maximum aggregate amounts" shall mean the lesser
                  of (I) the product of 1.25 (or such adjustment as required
                  under Section 12.4) and the dollar limitation in effect under
                  Section 415(c)(1)(A) of the Code, adjusted as prescribed by
                  the Secretary of the Treasury under Section 415(d) of the
                  Code, or (II) the product of 1.4 and the amount that may be
                  taken into account under Section 415(c)(1)(B) of the Code;
                  provided, however, that the Committee may elect, on a uniform
                  and nondiscriminatory basis, to apply the special transition
                  rule of Section 415(e)(7) of the Code applicable to Limitation
                  Years ending before January 1, 1983 in determining the
                  denominator of the Defined Contribution Plan Fraction.

                  If the Employee was a Participant as of the end of the first
                  day of the first Limitation Year beginning after December 31,
                  1986, in one or more defined contribution plans maintained by
                  the Employer which were in existence on May 6, 1986, the
                  numerator of this fraction will be adjusted if the sum of this
                  fraction and the defined benefit fraction would otherwise
                  exceed 1.0 under the terms of

--------------------------------------------------------------------------------
787                                  27              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

                  this Plan. Under the adjustment, an amount equal to the
                  product of (1) the excess of the sum of the fractions over 1.0
                  times (2) the denominator of this fraction, will be
                  permanently subtracted from the numerator of this fraction.
                  The adjustment is calculated using the fractions as they would
                  be computed as of the end of the last Limitation Year
                  beginning before January 1, 1987, and disregarding any changes
                  in the terms and conditions of the Plan made after May 5,
                  1986, but using the Section 415 limitation applicable to the
                  first Limitation Year beginning on or after January 1, 1987.
                  The annual addition for any Limitation Year beginning before
                  January 1, 1987, shall not be recomputed to treat all Employee
                  contributions as Annual Additions.

            (vi)  "Limitation Year" shall mean the calendar year.

            (vii) "Section 415 Compensation" shall be with respect to a Plan
                  Year commencing January 1, 1997, a Participant's remuneration
                  as defined in Income Tax Regulations Sections 1.415-2(d)(2),
                  (3) and (6). For purposes of this Section, effective for Plan
                  Years commencing after December 31, 1997, Section 415
                  Compensation shall include (A) any elective deferral (as
                  defined in Section 402(g)(3) of the Code, and (B) any amount
                  which is contributed or deferred by the Employer at the
                  election of the Employee and which is not includable in the
                  gross income of the Employee by reason of Section 125 or 457
                  of the Code.

                  For purposes of this Section 3.12(a)(vii), effective for
                  Limitation Years commencing on or after January 1, 1998, for
                  purposes of applying the Limitations described in this Section
                  3.12, compensation paid or made available during such
                  Limitation Years shall include elective amounts that are not
                  includable in the gross income of an Employee by reason of
                  Section 132(f)(4) of the Code.

      (b)   For purposes of applying the Section 415 limitations, the Employer
            and all members of a controlled group of corporations (as defined
            under Section 414(b) of the Code as modified by Section 415(h) of
            the Code), all commonly controlled trades or businesses (as defined
            under Section 414(c) of the Code as modified by Section 415(h) of
            the Code), all affiliated service groups (as defined under Section
            414(m) of the Code) of which the Employer is a member, any leasing
            organization (as defined under Section 414(n) of the Code) that
            employs any person who is considered an Employee under Section
            414(n) of the Code and any other group provided for under any and
            all Income Tax Regulations promulgated by the Secretary of the
            Treasury under Section 414(o) of the Code, shall be treated as a
            single employer.

      (c)   If the Employer maintains more than one qualified Defined
            Contribution Plan on behalf of its Employees, such plans shall be
            treated as one Defined Contribution Plan for purposes of applying
            the Section 415 limitations of the Code.

--------------------------------------------------------------------------------
787                                  28              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      (d)   Notwithstanding anything contained in the Plan to the contrary, in
            no event shall the Annual Additions to a Participant's Accounts for
            a Limitation Year exceed the lesser of:

            (i)   thirty thousand dollars ($30,000), and with respect to a
                  Limitation Year commencing on and after January 1, 1995, as
                  adjusted in multiples of five thousand dollars ($5,000) for
                  increases in the cost-of-living as prescribed by the Secretary
                  of the Treasury under Section 415(d) of the Code; or

            (ii)  twenty-five percent (25%) of the Participants Section 415
                  Compensation for such Limitation Year. For purposes of this
                  subsection (d)(ii), Section 415 Compensation shall not include
                  (A) any contribution for medical benefits within the meaning
                  of Section 419A(f)(2) of the Code after separation from
                  service, which is otherwise treated as an Annual Addition, and
                  (B) any amount otherwise treated as an Annual Addition under
                  Section 415(l)(1) of the Code.

      (e)   If, as a result of the allocation of forfeitures, a reasonable error
            in estimating a Participant's annual Compensation, a reasonable
            error in determining the amount of elective deferrals that may be
            made with respect to any Participant, or as otherwise permitted by
            the Internal Revenue Service, the Annual Additions to a
            Participant's Accounts for a Limitation Year exceed the limitation
            set forth in subsection (d) above during the Limitation Year, any or
            all of the following contributions on behalf of such Participant
            shall be immediately adjusted to that amount which will result in
            such Annual Additions not exceeding the limitation set forth in
            subsection (d):

            (i)   Discretionary Employer Contributions;

            (ii)  Nonelective Employer Contributions;

            (iii) Before-Tax Contributions;

            (iv)  Special Contributions; and

            (v)   Matching Contributions.

      (f)   If the Annual Additions to a Participant's Accounts for a Limitation
            Year exceed the limitations set forth in subsection (d) above at the
            end of a Limitation Year, such excess amounts shall not be treated
            in accordance with the following:

            (i)   such excess amounts shall be used to reduce the Before-Tax
                  Contributions, Discretionary Employer Contributions, Matching
                  Contributions and/or Special Contributions to be made on
                  behalf of such Participant in the succeeding Limitation Year,
                  provided that such Participant is an Eligible Employee during
                  such succeeding Limitation Year. If such Participant is not an
                  Eligible Employee or ceases to be an Eligible Employee during
                  such succeeding Limitation Year, any remaining excess amounts
                  from the preceding Limitation Year shall be

--------------------------------------------------------------------------------
787                                  29              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

                  allocated during such succeeding Limitation Year to each
                  Participant then actively participating in the Plan. Such
                  allocation shall be in proportion to the Before-Tax
                  Contributions made to date on his behalf for such Limitation
                  Year, or the prior Limitation Year with respect to an
                  allocation as of the beginning of a Limitation Year, before
                  any other contributions are made in such succeeding Limitation
                  Year; or

            (ii)  such excess amounts may be reduced by the distribution of such
                  Participant's Before-Tax Contributions to such Participant.

            The Employer will, at the end of the Limitation Year in which such
            excess amounts were made, choose the manner in which to treat such
            excess amounts on a uniform and nondiscriminatory basis on behalf of
            all affected Participants. If such excess amounts are reduced by the
            distribution described in subsection (ii), the amounts of such
            distribution shall not be taken into account for purposes of
            Sections 3.2(a)(i) and (ii), 3.7(a) and (b), or in determining the
            limitation in Section 3.2(b). In addition, any Matching
            Contributions attributable to such amounts shall constitute
            Forfeitures as described in Section 4.2.

      (g)   If a Participant participates in both (i) the Plan and/or any other
            defined contribution plan maintained by the Employer and (ii) any
            defined benefit plan or plans maintained by the Employer, the sum of
            the Defined Contribution Plan Fraction and the Defined Benefit Plan
            Fraction shall not exceed the sum of l.0. This subsection (g) shall
            not apply with respect to Plan Years beginning on or after January
            1, 2000.

      (h)   If, for any Plan Year commencing prior to January 1, 2000, the sum
            determined under subsection (g) for any Participant exceeds 1.0, the
            Defined Benefit Plan Fraction of such Participant as provided in the
            defined benefit plan or plans maintained by the Employer shall be
            reduced in order that such sum shall not exceed 1.0.

3.13  Nonelective Employer Contributions

      Effective with respect to the period beginning January 1, 2001, in
      addition to other contributions, if any, the Employer will make a
      Nonelective Employer Contribution in accordance with Section 401(k)(12) of
      the Code, for a Plan Year, in order to meet the nondiscrimination
      requirements of Code Section 401(k). For any Plan Year in which the
      Employer makes a Nonelective Employer Contribution, such contribution
      shall be in the amount of two percent (2%) of each Eligible Employee's
      Compensation who is employed by the Employer on the last day of the Plan
      Year.

      Nonelective Employer Contributions made to the Plan on behalf of each
      Eligible Employee, shall be credited to such Eligible Employee's
      Nonelective Employer Contribution Account and shall be invested in
      accordance with Article VI of the Plan. Any and all withdrawals,
      distributions or

--------------------------------------------------------------------------------
787                                  30              Carver Federal Savings Bank
<PAGE>

                                                                   Article III -
                                  Contributions and Limitations on Contributions
--------------------------------------------------------------------------------

      payments from a Participant's Nonelective Employer Contribution Account
      shall be made in accordance with Article VII, or Article VIII of the Plan,
      whichever is applicable.

--------------------------------------------------------------------------------
787                                  31              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

                                   ARTICLE IV -
                             VESTING AND FORFEITURES

4.1   Vesting

      (a)   An Employee shall always be fully vested in the Net Value of his
            Before-Tax Contribution Account and the Net Value of his Rollover
            Contribution Account. Commencing January 1, 2002, an Employee shall
            always be fully vested in the Net Value of the portion of his
            Matching Contribution Account which consists of Matching
            Contributions made on and after January 1, 2002, and the earnings
            thereon.

      (b)   A Participant shall become fully vested in the Net Value of that
            portion of his Matching Contribution Account as in effect prior to
            January 1, 2002, the Net Value of his Discretionary Employer
            Contribution Account and the Net Value of his Nonelective Employer
            Contribution Account upon the earlier of such Participant's (i)
            Normal Retirement Age or (ii) termination of employment by reason of
            death, Disability or reaching his Retirement Date.

      (c)   Prior to September 15, 1998, a Participant who is not fully vested
            under subsection (b) shall be vested in the Net Value of his
            Matching Contribution Account and the Net Value of his Matching
            Contribution Account in accordance with the following schedule:

                    Period of Service                          Vested Percentage
                    -----------------                          -----------------

                    Less than 3 years                                  0%
                    3 years but less than 4 years                     20%
                    4 years but less than 5 years                     40%
                    5 years but less than 6 years                     60%
                    6 years but less than 7 years                     80%
                    7 or more years                                  100%

            Effective September 15, 1998, the vesting schedule was amended as
            follows:

                     Period of Service                         Vested Percentage
                     -----------------                         -----------------

                     Less than 1 year                                   0%
                     1 year but less than 2 years                      20%
                     2  years but less than 3 years                    40%
                     3 years but less than 4 years                     60%
                     4 years but less than 5 years                     80%
                     5 or more years                                  100%

            For purposes of determining a Participant's Period of Service under
            this subsection (c) and under Section 4.3, employment with an
            Affiliated Employer shall be deemed employment with the Employer.

--------------------------------------------------------------------------------
787                                  32              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

            For purposes of determining a Participant's vested percentage of the
            Net Value of his Matching Contribution Account and the Net Value of
            his Discretionary Employer Contribution Account, all Periods of
            Service shall be recognized, including, effective October 1, 1989
            and November 19, 1990 respectively, employment with CrossLand
            Savings, FSB and Nassau Federal Savings and Loan Association which
            preceded employment with the Employer.

      (d)   The vested Net Value of a Participant's Matching Contribution
            Account, Discretionary Employer Contribution Account and Nonelective
            Employer Contribution Account shall be determined as follows:

            (i)   the Participant's Matching Contribution Account, Discretionary
                  Employer Contribution Account and Nonelective Employer
                  Contribution Account shall first be increased to include (A)
                  that portion of such Account which had been previously
                  withdrawn in accordance with Sections 7.3 and 7.4 and (B) that
                  portion of such Account which had been borrowed in accordance
                  with Article VIII and is outstanding on the date of this
                  determination;

            (ii)  the applicable vested percentage determined in accordance with
                  subsection (c) shall then be applied to such Account as
                  determined in accordance with clause (i);

            (iii) the amount determined in accordance with clause (ii) shall
                  then be reduced by (A) that portion of such Account which had
                  been previously withdrawn in accordance with Sections 7.2 and
                  7.3 and (B) that portion of such Account which had been
                  borrowed in accordance with Article VIII and is outstanding on
                  the date of this determination.

4.2   Forfeitures

      If a Participant who is not fully vested in the Net Value of his Accounts
      terminates employment, the Units representing the nonvested portion of his
      Accounts shall constitute Forfeitures. Forfeitures shall be treated as
      Matching Contributions, Discretionary Employer Contributions and
      Nonelective Employer Contributions and shall be applied to reduce the
      amount of subsequent Matching Contributions, Discretionary Employer
      Contributions and Nonelective Employer Contributions otherwise required to
      be made.

      With respect to a Participant's Matching Contribution Account, anything in
      Section 4.1 to the contrary notwithstanding, any Matching Contribution
      forfeited in accordance with the sixth paragraph of Section 3.2(a), the
      second paragraph of Section 3.2(c), the sixth paragraph of Section 3.7 or
      the second paragraph of Section 3.12(f), shall be applied to reduce the
      amount of subsequent Matching Contributions otherwise required to be made.

--------------------------------------------------------------------------------
787                                  33              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

      If a former Participant who is not fully vested in the Net Value of his
      Accounts receives a distribution of his vested interest in the Net Value
      of his Accounts and is subsequently reemployed by the Employer prior to
      incurring five (5) consecutive One Year Periods of Severance, he shall
      have the Net Value of his Accounts as of the date he previously terminated
      employment reinstated provided he repays the full amount of his
      distribution in cash or cash equivalents before the end of the five (5)
      consecutive One Year Periods of Severance commencing with the date of
      distribution. The reinstated amount shall be unadjusted by any gains or
      losses occurring subsequent to the Participant's termination of employment
      and prior to repayment of such distribution. Any forfeited amounts
      required to be reinstated hereunder shall be made by an additional
      Employer contribution for such Plan Year. If such former Participant does
      not repay the full amount of his distribution in cash or cash equivalents
      before the end of the five (5) consecutive One Year Periods of Severance
      commencing with the date of distribution, the Net Value of his Accounts as
      of the date he previously terminated employment shall not be reinstated.

      If a former Participant who is not fully vested in the Net Value of his
      Accounts elects to defer distribution of his vested account interest or
      elects to receive installment payments pursuant to Section 7.6(e), the
      nonvested portion of such former Participant's Account shall be forfeited
      as of the date of his Termination of Service; provided, however, that if
      such former Participant is reemployed before incurring five (5)
      consecutive One Year Periods of Severance, the nonvested portion of his
      Accounts shall be reinstated in its entirety, unadjusted by any gains or
      losses occurring subsequent to the distribution.

4.3   Vesting upon Reemployment

      (a)   For purposes of this Section 4.3, "Period of Service" means an
            Employee's Period of Service determined in accordance with Section
            4.1(c).

      (b)   For the purpose of determining a Participant's vested interest in
            the Net Value of his Matching Contribution Account, Discretionary
            Employer Contribution Account and Nonelective Employer Contribution
            Account:

            (i)   if an Employee is not vested in any Matching Contributions
                  and/or Discretionary Employer Contributions and/or Nonelective
                  Employer Contributions, incurs a One Year Period of Severance
                  and again performs an Hour of Service, such Employee shall
                  receive credit for his Periods of Service prior to his One
                  Year Period of Severance only if the number of consecutive One
                  Year Periods of Severance is less than the greater of: (A)
                  five (5) years or (B) the aggregate number of his Periods of
                  Service credited before his One Year Period of Severance.

            (ii)  if a Participant is partially vested in any Matching
                  Contributions and/or Discretionary Employer Contributions
                  and/or Nonelective Employer Contributions, incurs a One Year
                  Period of Severance and again performs an

--------------------------------------------------------------------------------
787                                  34              Carver Federal Savings Bank
<PAGE>

                                                                    Article IV -
                                                         Vesting and Forfeitures
--------------------------------------------------------------------------------

                  Hour of Service, such Participant shall receive credit for his
                  Periods of Service prior to his One Year Period of Severance;
                  provided, however, that after five (5) consecutive One Year
                  Periods of Severance, a former Participant's vested interest
                  in the Net Value of the Matching Contribution Account and/or
                  Discretionary Employer Contribution Account and/or Nonelective
                  Employer Contribution Account attributable to Periods of
                  Service prior to his One Year Period of Severance shall not be
                  increased as a result of his Periods of Service following his
                  reemployment date.

            (iii) if a Participant is fully vested in any Matching Contributions
                  and/or Discretionary Employer Contributions and/or Nonelective
                  Employer Contributions, incurs a One Year Period of Severance
                  and again performs an Hour of Service, such Participant shall
                  receive credit for all his Periods of Service prior to his One
                  Year Period of Severance.

--------------------------------------------------------------------------------
787                                  35              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

                                    ARTICLE V -
                TRUST FUND, INVESTMENT ACCOUNTS AND VOTING RIGHTS

5.1   Trust Fund

      The Employer has adopted the Agreement as the funding vehicle with respect
      to the Investment Accounts. Commencing on the Conversion Date, the
      Employer has adopted the Separate Agreement as the funding vehicle with
      respect to the Employer Stock Fund.

      All contributions forwarded by the Employer to the Trustees pursuant to
      the Agreement shall be held by them in trust and shall be used to purchase
      Units on behalf of the Plan in accordance with the terms and provisions of
      the Agreement. Contributions designated for investment in any Investment
      Account of the Trust Fund shall be allocated proportionately to and among
      the classes of Units so selected for such Investment Account.

      All contributions forwarded by the Employer to the Separate Agency
      pursuant to the Separate Agreement shall be held by them in trust in
      accordance with the terms and provisions of the Separate Agreement.

      All assets of the Plan shall be held for the exclusive benefit of
      Participants, Beneficiaries or other persons entitled to benefits. No part
      of the corpus or income of the Plan Funds shall be used for, or diverted
      to, purposes other than for the exclusive benefit of Participants,
      Beneficiaries or other persons entitled to benefits and for defraying
      reasonable administrative expenses of the Plan, Trust and Separate Agency.
      No person shall have any interest in or right to any part of the earnings
      of the Plan Funds, or any rights in, to or under the Plan Funds or any
      part of its assets, except to the extent expressly provided in the Plan.

      The Trustees and the Separate Agency shall invest and reinvest the Plan
      Fund, and the income therefrom, without distinction between principal and
      income, in accordance with the terms and provisions of the Agreement and
      Separate Agreement, respectively. The Trustees and the Separate Agency may
      maintain such part of the Trust Fund and the Separate Assets, respectively
      in cash uninvested as they shall deem necessary or desirable. The Trustees
      shall be the owner of and have title to all the assets of the Plan Funds
      other than the Separate Assets and shall have full power to manage the
      same, except as otherwise specifically provided in the Agreement. The
      Separate Agency shall be the owner of and shall have title to the Separate
      Assets, and shall have full power to manage the same, except as otherwise
      specifically provided in the Separate Agreement.

5.2   Interim Investments

      The Trustees may temporarily invest any amounts designated for investment
      in any of the Investment Accounts of the Trust Fund identified herein in
      the Investment Account which provides for short-term investments and
      retain the value of such contributions therein pending

--------------------------------------------------------------------------------
787                                  36              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

      the allocation of such values to the Investment Accounts designated for
      investment. The Separate Agency may temporarily invest any amounts in
      short-term investment pending investment in the Employer Stock Fund.

5.3   Account Values

      The Net Value of the Accounts of an Employee means the sum of the total
      Net Value of each Account maintained on behalf of the Employee in the
      Trust and Separate Agency as determined as of the Valuation Date
      coincident with or next following the event requiring the determination of
      such Net Value. The assets of any Account shall consist of the Units
      credited to such Account. The applicable Units shall be valued from time
      to time by the Trustees and Separate Agency, respectively, in accordance
      with the Agreement and Separate Agreement, but not less often than
      monthly. On the basis of such valuations, each Employee's Accounts shall
      be adjusted to reflect the effect of income collected and accrued,
      realized and unrealized profits and losses, expenses and all other
      transactions during the period ending on the applicable Valuation Date.

      Upon receipt by the Trustees of Before-Tax Contributions, Matching
      Contributions, and, if applicable, Discretionary Employer Contributions,
      Rollover Contributions, Special Contributions and Nonelective Employer
      Contributions, and upon receipt by a Separate Agency of any Before-Tax
      Contributions, Matching Contributions, and, if applicable, Discretionary
      Employer Contributions, Rollover Contributions, Special Contributions and
      Nonelective Employer Contributions, such contributions shall be applied to
      purchase for such Employee's Account (a) Units other than Units of the
      Employer Stock Fund, using the value of such Units as of the close of
      business on the date received and (b) Units of the Employer Stock Fund
      using the value of such Units as of the preceding Valuation Date. Whenever
      a distribution is made to a Participant, Beneficiary or other person
      entitled to benefits, the appropriate number of Units credited to such
      Employee shall be reduced accordingly and each such distribution shall be
      charged against the Units of the Investment Accounts of such Employee pro
      rata according to their respective values.

      For the purposes of this Section 5.3, fractions of Units as well as whole
      Units may be purchased or redeemed for the Account of an Employee.

5.4   Voting Rights

      Each Participant with Units in the Employer Stock Fund shall have the
      right to participate confidentially in the exercise of voting rights
      appurtenant to shares held in such Investment Account, provided that such
      person had Units in such Account as of the most recent Valuation Date
      coincident with or preceding the applicable record date for which records
      are available. Such participation shall be achieved by completing and
      filing with the inspector of elections, or such other person who shall be
      independent of the issuer of shares as the Committee shall designate, at
      least ten (10) days prior to the date of the meeting of holders of shares
      at which such voting rights will be exercised, a written direction in the
      form and manner prescribed by the

--------------------------------------------------------------------------------
787                                  37              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

      Committee. The inspector of elections, or other such person designated by
      the Committee shall tabulate the directions given on a strictly
      confidential basis, and shall provide the Committee with only the final
      results of the tabulation. The final results of the tabulation shall be
      followed by the Committee in the direction as to the manner in which such
      voting rights shall be exercised. As to each matter in which the holders
      of shares are entitled to vote:

      (a)   a number of affirmative votes shall be cast equal to the product of:

            (i)   the total number of shares held in the Employer Stock Fund as
                  of the applicable record date; and

            (ii)  a fraction, the numerator of which is the aggregate value (as
                  of the Valuation Date coincident with or immediately preceding
                  the applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that an affirmative vote be
                  cast, and the denominator of which is the aggregate value (as
                  of the Valuation Date coincident with or immediately preceding
                  the applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that an affirmative or negative
                  vote be cast; and

      (b)   a number of negative votes shall be cast equal to the product of:

            (i)   the total number of shares held in the Employer Stock Fund as
                  of the applicable record date; and

            (ii)  a fraction, the numerator of which is the aggregate value (as
                  of the Valuation Date coincident with or immediately preceding
                  the applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that a negative vote be cast,
                  and the denominator of which is the aggregate value (as of the
                  Valuation Date coincident with or immediately preceding the
                  applicable record date) of the Units in the Employer Stock
                  Fund of all persons directing that an affirmative or negative
                  vote be cast.

      The Committee shall furnish, or cause to be furnished, to each person with
      Units in the Employer Stock Fund, all annual reports, proxy materials and
      other information known to have been furnished by the issuer of the shares
      or by any proxy solicitor, to the holders of shares.

5.5   Tender Offers and Other Offers

      Each Participant with Units in the Employer Stock Fund shall have the
      right to participate confidentially in the response to a tender offer, or
      any other offer, made to the holders of shares generally, to purchase,
      exchange, redeem or otherwise transfer shares; provided that such person
      has Units in the Employer Stock Fund as of the Valuation Date coincident
      with or immediately preceding the first day for delivering shares or
      otherwise responding to such tender or other offer. Such participation
      shall be achieved by completing and filing with the inspector of
      elections, or such other person who shall be independent of the issuer of
      shares as the

--------------------------------------------------------------------------------
787                                  38              Carver Federal Savings Bank
<PAGE>

                                                                     Article V -
                               Trust Fund, Investment Accounts and voting rights
--------------------------------------------------------------------------------

      Committee shall designate, at least ten (10) days prior to the last day
      for delivering shares or otherwise responding to such tender or other
      offer, a written direction in the form and manner prescribed by the
      Committee. The inspector of elections, or other such person designated by
      the Committee shall tabulate the directions given on a strictly
      confidential basis, and shall provide the Committee with only the final
      results of the tabulation. The final results of the tabulation shall be
      followed by the Committee in the direction as to the number of shares to
      be delivered. On the last day for delivering shares or otherwise
      responding to such tender or other offer, a number of shares equal to the
      product of:

      (a)   the total number of shares held in the Employer Stock Fund; and

      (b)   a fraction, the numerator of which is the aggregate value (as of the
            Valuation Date coincident with or immediately preceding the first
            day for delivering shares or otherwise responding to such tender or
            other offer) of the Units in the Employer Stock Fund of all persons
            directing that shares be delivered in response to such tender or
            other offer, and the denominator of which is the aggregate value (as
            of the Valuation Date coincident with or immediately preceding the
            first day for delivering shares or otherwise responding to such
            tender or other offer) of the Units in the Employer Stock Fund of
            all persons directing that shares be delivered or that the delivery
            of shares be withheld;

      shall be delivered in response to such tender or other offer. Delivery of
      the remaining shares then held in the Employer Stock Fund shall be
      withheld. The Committee shall furnish, or cause to be furnished, to each
      person whose Account is invested in whole or in part in the Employer Stock
      Fund, all information concerning such tender offer furnished by the issuer
      of shares, or information furnished by or on behalf of the person making
      the tender or such other offer.

5.6   Separate Assets

      Subject to the terms and conditions of the Agreement and upon approval by
      the Trustees, a designated portion of the assets of the Plan may be held
      as Separate Assets under the Separate Agreement pursuant to investment
      elections made by Plan Participants from time to time. The Trustees shall
      have no responsibility or liability with respect to the management and
      control of any Separate Assets and shall have only those administrative
      duties with respect to such Separate Assets as are set forth in the Plan
      and the Agreement.

5.7   Power to Invest in Employer Securities

      The Committee may direct the Separate Agency to acquire or hold any
      security issued by the Employer or any Affiliated Employer which is a
      "qualifying employer security" as such term is defined under ERISA and to
      invest that portion of the assets of the Plan Funds in such securities.

--------------------------------------------------------------------------------
787                                  39              Carver Federal Savings Bank
<PAGE>

                                                                    Article VI -
                         Investment Directions, Changes of Investment Directions
                                       and Transfers Between Investment Accounts
--------------------------------------------------------------------------------

                                  ARTICLE VI -
             INVESTMENT DIRECTIONS, CHANGES OF INVESTMENT DIRECTIONS
                    AND TRANSFERS BETWEEN INVESTMENT ACCOUNTS

6.1   Investment Directions

      Upon electing to participate, each Participant shall direct that the
      contributions made to his Accounts shall be applied to purchase Units in
      any one or more of the Investment Accounts of the Trust Fund, and
      commencing on the Conversion Date, purchase Units in the Employer Stock
      Fund. Such direction shall indicate the percentage, in multiples of ten
      percent (10%), in which Before-Tax Contributions, Matching Contributions,
      Special Contributions, Discretionary Employer Contributions and Rollover
      Contributions shall be made to the designated Investment Accounts.
      Commencing January 1, 2001, such direction shall indicate the percentage,
      in multiples of one percent (1%), in which Before-Tax Contributions,
      Matching Contributions, Special Contributions, Discretionary Employer
      Contributions, Rollover Contributions and Nonelective Employer
      Contributions shall be made to the designated Investment Accounts.

      To the extent a Participant shall fail to make an investment direction,
      contributions made on his behalf shall be applied to purchase Units in the
      Investment Account which provides for short-term investments.

6.2   Change of Investment Directions

      A Participant may change any investment direction not more often than once
      in any calendar quarter by completing and filing a notice in the form and
      manner prescribed by the Committee at least ten (10) days prior to the
      effective date of such direction. Commencing January 1, 2001, a
      Participant may change any investment direction, at any time, in the form
      and manner prescribed by the Committee either: (a) by completing and
      filing a notice at least ten (10) days prior to the effective date of such
      direction, or (b) by telephone or other electronic medium. Any such change
      shall be subject to the same conditions as if it were an initial direction
      and shall be applied only to any contributions to be invested on or after
      the effective date of such direction.

6.3   Transfers Between Investment Accounts

      By filing a notice in the form and manner prescribed by the Committee at
      least ten (10) days prior to the effective date of such change, a
      Participant or Beneficiary may, not more often than once in any calendar
      quarter, direct that multiples of ten percent (10%) of the Net Value of
      any one or more Investment Accounts be transferred to any one or more of
      the other Investment Accounts. Commencing January 1, 2001, a Participant
      or Beneficiary may, at any time, redirect the investment of his Investment
      Accounts such that a percentage of any one or more Investment Accounts may
      be transferred to any one or more other

--------------------------------------------------------------------------------
787                                  40              Carver Federal Savings Bank
<PAGE>

                                                                    Article VI -
                         Investment Directions, Changes of Investment Directions
                                       and Transfers Between Investment Accounts
--------------------------------------------------------------------------------

      Investment Accounts in the form and manner prescribed by the Committee,
      either: (a) by filing a notice at least ten (10) days prior to the
      effective date of such change, or (b) by telephone or other electronic
      medium. The requisite transfers shall be valued as of the Valuation Date
      on which the direction is received by the Trustees and shall be affected
      within seven (7) days of the Trustees' receipt of such direction.

6.4   Employees Other than Participants

      (a)   Investment Direction

            An Employee who is not a Participant but who has made a Rollover
            Contribution in accordance with the provisions of Section 3.11,
            shall direct, in the form and manner prescribed by the Committee,
            that such contribution be applied to the purchase of Units in any
            one or more of the Investment Accounts, and commencing on the
            Conversion Date, to purchase Units in the Employer Stock Fund. Such
            direction shall indicate the percentage, in multiples of ten percent
            (10%), in which contributions shall be made to the designated
            Investment Accounts. Commencing January 1, 2001, such direction
            shall indicate the percentage, in multiples of one percent (1%), in
            which contributions shall be made to the designated Accounts. To the
            extent any Employee shall fail to make an investment direction, the
            Rollover Contributions shall be applied to the purchase of Units in
            the Investment Account which provides for short-term investments.

      (b)   Transfers Between Investment Accounts

            An Employee who is not a Participant may, subject to the provisions
            of Section 6.3, not more often than once in any calendar quarter,
            direct that multiples of ten percent (10%) of the Net Value of any
            one or more Investment Accounts be transferred to any one or more of
            the other Investment Accounts. Commencing January 1, 2001, an
            Employee who is not a Participant may, subject to the provisions of
            Section 6.3, at any time, redirect the investment of his Investment
            Accounts such that a percentage of any one or more Investment
            Accounts may be transferred to any one or more other Investment
            Accounts. The requisite transfers shall be valued as of the
            Valuation Date on which the direction is received by the Trustees
            and shall be affected within seven (7) days of the Trustees' receipt
            of such direction.

6.5   Restrictions on Investments in the Employer Stock Fund for Certain
      Participants

      Notwithstanding anything in the Plan to the contrary, any Participant
      subject to the provisions of Section 16(b) of the Securities Exchange Act
      of 1934, as amended: (a) may direct that his Accounts be transferred into
      or out of the Employer Stock Fund, subject to the provisions of Section
      6.3, only once during each quarter, during the period beginning on the
      third (3rd)

--------------------------------------------------------------------------------
787                                  41              Carver Federal Savings Bank
<PAGE>

                                                                    Article VI -
                         Investment Directions, Changes of Investment Directions
                                       and Transfers Between Investment Accounts
--------------------------------------------------------------------------------

      business day following the date of release of the quarterly and annual
      statements of sales and earnings by the issuer of the shares, and ending
      on the twelfth (12th) business day following such date; and (b) may not
      make a transfer in accordance with the provisions of Section 6.3 within
      six (6) months of the next preceding transfer into or out of the Employer
      Stock Fund. In addition, any Participant subject to the provisions of
      Section 16(b) of the Securities Exchange Act of 1934 who elects to receive
      a distribution of shares from the Plan in accordance with Section 7.11
      hereof, including withdrawals under Sections 7.3 and 7.4 and loans under
      Article VIII, or who substantially decreases his rate of Before-Tax
      Contributions pursuant to Section 3.3 with respect to the amounts to be
      invested in the Employer Stock Fund, or his investment direction with
      respect to the Employer Stock Fund pursuant to Section 6.2, must either
      (i) in the case of a distribution, hold such shares for a period of six
      (6) months commencing with the date of distribution, or (ii) refrain from
      directing the purchase of additional Units in the Employer Stock Fund for
      a period of six (6) months beginning with the date of a decrease in rate
      or a change in investment direction. However, unless otherwise required by
      rules and regulations of the Securities and Exchange Commission, the
      restrictions under this Section 6.5 shall not apply to distributions of
      shares made in connection with a Participant's death, Disability,
      termination of employment or reaching his Retirement Date; pursuant to a
      qualified domestic relations order described under Section 414(p) of the
      Code; as a result of the minimum distribution requirements described under
      Section 401(a)(9) of the Code; or as a result of the limitations described
      under Section 401(k), 401(m), 402(g) and 415 of the Code.

--------------------------------------------------------------------------------
787                                  42              Carver Federal Savings Bank
<PAGE>

                                                                   Article VII -
                                                             Payment of Benefits
--------------------------------------------------------------------------------

                                  ARTICLE VII -
                               PAYMENT OF BENEFITS

7.1   General

      (a)   For purposes of this Article VII, the following terms and phrases
            shall have the meanings hereinafter ascribed to them:

            (i)   "Beneficiary" shall mean (A) in the case of a married
                  Participant, the Spouse. Notwithstanding the foregoing, such
                  Participant may, subject to the spousal consent requirements
                  of Section 7.2(a), effectively elect to designate a person or
                  persons other than the Spouse as Beneficiary; (B) in the case
                  of a single Participant, a person or persons who have been
                  designated under the Plan by such Participant or who are
                  otherwise entitled to a benefit under the Plan.

            (ii)  "Straight Life Annuity" shall mean a benefit payable in equal
                  monthly installments to the Participant for his life with no
                  benefits payable after his death.

            (iii) "100% Joint and Survivor Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his life
                  with the same benefit continuing after his death to and for
                  the life of a surviving Beneficiary.

            (iv)  "75% Joint and Survivor Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his life
                  with a benefit equal to three-quarters (3/4) of the benefit
                  paid to the Participant continuing after his death to and for
                  the life of a surviving Beneficiary.

            (v)   "50% Joint and Survivor Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his life
                  with a benefit equal to one-half (1/2) of the benefit paid to
                  the Participant continuing after his death to and for the life
                  of a surviving Beneficiary.

            (vi)  "Period Certain and Life Annuity" shall mean a benefit payable
                  in equal monthly installments to the Participant for his
                  lifetime. If the Participant's death occurs on or after the
                  expiration of the period certain, no further benefits will be
                  payable. If, however, the Participant's death occurs before
                  the expiration of the period certain, equal monthly
                  installments in the same amount as paid to the Participant
                  prior to his death will be paid to his designated Beneficiary.
                  In the event neither the Participant nor the designated
                  Beneficiary survive to the end of said period certain, a final
                  lump sum distribution equal to the commuted value of any
                  installments shall be made to the estate of the last to die of
                  (A) the Participant and (B) his Beneficiary.

--------------------------------------------------------------------------------
787                                  43              Carver Federal Savings Bank
<PAGE>

                                                                   Article VII -
                                                             Payment of Benefits
--------------------------------------------------------------------------------

      (b)   The vested interest in the Net Value of any one or more of the
            Accounts of a Participant, Beneficiary or any other person entitled
            to benefits under the Plan shall be paid only at the times, to the
            extent, in the manner, and to the persons provided in this Article
            VII.

      (c)   Notwithstanding the foregoing, if payments are to be made on a
            monthly basis and if payments are fifty dollars ($50.00) or less,
            the Committee, in its sole discretion, may determine to make such
            payments in a lump sum or in quarterly, semi-annual, or annual
            installments.

      (d)   Any distribution of the vested interest in the Net Value of a
            Participant's Accounts which is made by the purchase of any annuity
            shall be made by the purchase of a nontransferable annuity contract
            from a legal reserve life insurance company licensed to do business
            in the state of New York. Such annuity contract shall comply with
            the provisions of this Plan.

      (e)   The Net Value of any one or more of the Accounts of a Participant
            shall be subject to the provisions of Section 8.7.

      (f)   Notwithstanding any provisions of the Plan to the contrary, any and
            all withdrawals, distributions or payments made under the provisions
            of this Article VII shall be made in accordance with Section
            401(a)(9) of the Code and any and all Income Tax Regulations
            promulgated thereunder.

            With respect to distributions under the Plan made in calendar years
            beginning on or after January 1, 2001, the Plan will apply the
            minimum distribution requirements of Section 401(a)(9) of the Code
            in accordance with the regulations under Section 401(a)(9) that were
            proposed in January 2001, notwithstanding any provision of the Plan
            to the contrary. This amendment shall continue in effect until the
            end of the 2002 calendar year. For calendar years beginning with the
            2003 calendar year, the Plan will apply the minimum distribution
            requirements of Section 401(a)(9) of the Code, in accordance with
            final regulations, as set forth in Section 7.10.

      (g)   Notwithstanding any provisions of the Plan to the contrary, the
            provisions of this Article VII shall also apply to a person who is
            not a Participant but who has made a contribution to and maintains a
            Rollover Contribution Account under the Plan.

      (h)   Distributions from the Employer Stock Fund under this Article VII,
            shall be made in accordance with Section 7.11 hereunder.

7.2   Spousal Consent Requirements - Optional Forms of Benefit Payments, Loans,
      Withdrawals, Beneficiaries

      (a)   An election by the Participant (i) to receive benefit payments in a
            form other than the normal form of benefit payment set forth in
            Section 7.5(a), (ii) to receive a loan in

--------------------------------------------------------------------------------
787                                  44              Carver Federal Savings Bank
<PAGE>

                                                                   Article VII -
                                                             Payment of Benefits
--------------------------------------------------------------------------------

            accordance with the provisions of Article VIII or to revise,
            renegotiate, renew or extend an existing loan, (iii) to receive a
            withdrawal in accordance with the provisions of Section 7.3 or
            Section 7.4, (iv) to designate a Beneficiary who is other than his
            Spouse, or (v) under any other provision of the Plan which is
            subject to spousal consent, shall not be effective unless: (A) the
            Participant's Spouse irrevocably consents to such election in
            writing, (B) such election designates a Beneficiary or form of
            benefit payment, which may not be changed without spousal consent
            unless the consent of the Spouse expressly permits designation by
            the Participant without any requirement of further consent by the
            Spouse, (C) the Spouse's consent acknowledges understanding of the
            effect of such election, and (D) the consent is witnessed by a Plan
            representative or a notary public. Notwithstanding this consent
            requirement, if the Participant establishes to the satisfaction of
            the Plan representative that such written consent cannot be obtained
            because there is no Spouse or the Spouse cannot be located, such
            election shall be deemed a qualified election.

            Any consent necessary under this provision shall be valid only with
            respect to the Spouse who signs the consent. Notwithstanding the
            foregoing sentence, a consent to receive a loan or withdrawal which
            had been executed by a Spouse shall be binding with respect to such
            loan or withdrawal on any subsequent Spouse.

      (b)   (i)   A married Participant who has submitted to the Committee an
                  election form in accordance with the provisions of subsection
                  (a)(i) may, without the consent of his Spouse, revoke such
                  prior election by submitting written notification of such
                  revocation to the Committee before the date benefit payments
                  are scheduled to commence. Upon revocation, the 50% Joint and
                  Survivor Annuity, with the Participant's Spouse as
                  Beneficiary, shall be reinstated unless the Participant files
                  another election form in accordance with the provisions of
                  subsection (a). The number of election forms and revocations
                  shall not be limited.

            (ii)  A married Participant who has submitted to the Committee an
                  election form in accordance with the provisions of subsection
                  (a)(iv), may, without the consent of his Spouse, revoke such
                  prior election by submitting written notification of such
                  revocation to the Committee before the date benefit payments
                  are scheduled to commence. Such revocation shall result in the
                  reinstatement of the Spouse as the designated Beneficiary
                  unless the Participant effectively designates another person
                  as Beneficiary in accordance with the provisions of subsection
                  (a) and Section 7.7. The number of election forms and
                  revocations shall not be limited.

      (c)   The terms and conditions of any election form shall, unless
            otherwise indicated, become effective on the date benefit payments
            are scheduled to commence, or, if applicable, the date of
            distribution.

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7.3   Non-Hardship Withdrawals

      (a)   Subject to the spousal consent requirements of Section 7.2(a) and
            the terms and conditions contained in this Section 7.3, upon ten
            (10) days prior written notice to the Committee each Participant who
            has attained age fifty-nine and one-half (59-1/2) shall be entitled
            to withdraw not more often than once during any Plan Year all or any
            portion of his vested interest in the Net Value of his Accounts in
            the following order of priority:

            (i)   the Before-Tax Contribution Account;

            (ii)  the Net Value of the Participant's Rollover Contribution
                  Account provided that such Participant shall have satisfied
                  such additional terms and conditions, if any, as the Committee
                  may deem necessary;

            (iii) the vested interest in the Net Value of his Matching
                  Contribution Account;

            (iv)  the vested interest in the Net Value of his Discretionary
                  Employer Contribution Account; and

            (v)   the Net Value of his Nonelective Employer Contribution
                  Account.

      (b)   Withdrawals under this Section 7.3 shall be made in the following
            order of priority:

            (i)   by the redemption of Units from each of the Participant's
                  Accounts in the Trust Fund in the order set forth in Section
                  7.3(a), on a pro rata basis from the Investment Accounts
                  thereunder, as were selected by the Participant pursuant to
                  Article VI; and

            (ii)  by the redemption of Units invested in the Employer Stock Fund
                  from each of the Participant's Accounts invested under the
                  Separate Agreement, in the order set forth in Section 7.3(a),
                  if selected by the Participant pursuant to Article VI.

      (c)   Any withdrawals under this Section 7.3 shall be subject to the
            restrictions of Section 6.5.

7.4   Hardship Distributions

      (a)   For purposes of this Section 7.4, a "Hardship" distribution shall
            mean a distribution that is (i) made on account of a condition which
            has given rise to immediate and heavy financial need of a
            Participant and (ii) necessary to satisfy such financial need. A
            determination of the existence of an immediate and heavy financial
            need and the amount necessary to meet the need shall be made by the
            Committee in accordance with uniform nondiscriminatory standards
            with respect to similarly situated persons.

      (b)   Immediate and Heavy Financial Need:

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            A Hardship distribution shall be deemed to be made on account of an
            immediate and heavy financial need if the distribution is on account
            of:

            (i)   expenses for medical care described under Section 213(d) of
                  the Code which were previously incurred by the Participant,
                  the Participant's Spouse or any of the Participant's
                  dependents as defined under Section 152 of the Code or
                  expenses which are necessary to obtain medical care described
                  under Section 213(d) of the Code for the Participant, the
                  Participant's Spouse or any of the Participant's dependents as
                  defined under Section 152 of the Code; or

            (ii)  purchase (excluding mortgage payments) of a principal
                  residence of the Participant; or

            (iii) payment of tuition and related educational fees for the next
                  twelve (12) months of post-secondary education for the
                  Participant, the Participant's Spouse, children or any of the
                  Participant's dependents as defined under Section 152 of the
                  Code; or

            (iv)  the need to prevent the eviction of the Participant from his
                  principal residence or foreclosure on the mortgage of the
                  Participant's principal residence; or

            (v)   any other condition which the Commissioner of Internal
                  Revenue, through the publication of revenue rulings, notices
                  and other documents of general applicability, deems to be an
                  immediate and heavy financial need.

      (c)   Necessary to Satisfy Such Financial Need:

            (i)   A distribution will be treated as necessary to satisfy an
                  immediate and heavy financial need of a Participant if: (A)
                  the amount of the distribution is not in excess of (1) the
                  amount required to relieve the financial need of the
                  Participant and (2) if elected by the Participant, an amount
                  necessary to pay any federal, state or local income taxes, or
                  penalties reasonably anticipated to result from such
                  distribution, and (B) such need may not be satisfied from
                  other resources that are reasonably available to the
                  Participant.

            (ii)  A distribution will be treated as necessary to satisfy a
                  financial need if the Committee reasonably relies upon the
                  Participant's representation that the need cannot be relieved:

                  (A)   through reimbursement or compensation by insurance or
                        otherwise,

                  (B)   by reasonable liquidation of the Participant's assets,
                        to the extent such liquidation would not itself cause an
                        immediate and heavy financial need,

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                  (C)   by cessation of Before-Tax Contributions or Employee
                        contributions, if any, under the Plan, or

                  (D)   by other distributions or nontaxable loans from plans
                        maintained by the Employer or by any other employer, or
                        by borrowing from commercial sources on reasonable
                        commercial terms.

                  For purposes of this subsection (c)(ii), the Participant's
                  resources shall be deemed to include those assets of his
                  Spouse and minor children that are reasonably available to the
                  Participant.

            (iii) Alternatively, a Hardship distribution will be deemed to be
                  necessary to satisfy an immediate and heavy financial need of
                  a Participant if (A) or (B) are met:

                  (A)   all of the following requirements are satisfied:

                        (I)   the distribution is not in excess of (1) the
                              amount of the immediate and heavy financial need
                              of the Participant and (2) if elected by the
                              Participant, an amount necessary to pay any
                              federal, state or local income taxes or penalties
                              reasonably anticipated to result from such
                              distribution;

                        (II)  the Participant has obtained all distributions,
                              other than Hardship distributions, and all
                              nontaxable loans currently available under all
                              plans maintained by the Employer;

                        (III) the Plan, and all other plans maintained by the
                              Employer, provide that the Participant's elective
                              contributions and Employee contributions, if any,
                              will be suspended for twelve (12) months after
                              receipt of the Hardship distribution; and

                        (IV)  the Plan, and all other plans maintained by the
                              Employer, provide that the Participant may not
                              make elective contributions for the Participant's
                              taxable year immediately following the taxable
                              year of the Hardship distribution in excess of the
                              applicable limit under Section 402(g) of the Code
                              for such next taxable year, less the amount of
                              such Participant's elective contributions for the
                              taxable year of the Hardship distribution; or

                  (B)   the requirements set forth in additional methods, if
                        any, prescribed by the Commissioner of Internal Revenue
                        (through the publication of revenue rulings, notices and
                        other documents of general applicability) are satisfied.

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      (d)   A Participant who has withdrawn the maximum amounts available to
            such Participant under Section 7.3 or a Participant who is not
            eligible for a withdrawal thereunder, may, in case of Hardship (as
            defined under this Section 7.4), apply not more often than once in
            any Plan Year to the Committee for a Hardship distribution. Any
            application for a Hardship distribution shall be subject to the
            spousal consent requirements of Section 7.2(a) and be made in
            writing to the Committee at least ten (10) days prior to the
            requested date of payment. Hardship distributions may be made by a
            distribution of all or a portion of a Participant's (i) Before-Tax
            Contributions, (ii) Net Value of his Rollover Contribution Account,
            (iii) vested interest in the Net Value of his Matching Contribution
            Account and (iv) the vested interest in the Net Value of his
            Discretionary Employer Contribution Account.

      (e)   Distributions under this Section 7.4 shall be made in the following
            order of priority:

            (i)   Participant's Before-Tax Contributions;

            (ii)  the Net Value of the Participant's Rollover Contribution
                  Account;

            (iii) the vested interest in the Net Value of the Participant's
                  Matching Contribution Account; and

            (iv)  the vested interest in the Net Value of the Participant's
                  Discretionary Employer Contribution Account; and

            (v)   the vested interest in the Net Value of the Participant's
                  Nonelective Employer Contribution Account.

      (f)   Withdrawals under this Section 7.4 shall be made in the following
            order of priority:

            (i)   by the redemption of Units from each of the Participant's
                  Accounts in the Trust Fund in the order set forth in Section
                  7.4(e), on a pro rata basis from the Investment Accounts
                  thereunder, as were selected by the Participant pursuant to
                  Article VI; and

            (ii)  by the redemption of Units invested in the Employer Stock Fund
                  from each of the Participant's Accounts invested under the
                  Separate Agreement, in the order set forth in Section 7.4(e),
                  if selected by the Participant pursuant to Article VI.

      (g)   A Participant who receives a Hardship distribution under this
            Section 7.4 may have his Before-Tax Contributions suspended in
            accordance with Section 3.3.

      (h)   Any withdrawals under this Section 7.4 shall be subject to the
            restrictions of Section 6.5.

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7.5   Distribution of Benefits Following Retirement, Disability or Termination
      of Service

      (a)   If a Participant incurs a Termination of Service for any reason
            other than death, a distribution of the vested interest in the Net
            Value of his Accounts shall be made by the purchase of (i) a 50%
            Joint and Survivor Annuity with his Spouse as the designated
            Beneficiary or (ii) a Straight Life Annuity if the Participant does
            not have a Spouse. Payment of benefits to the Participant shall
            commence as of the later of the Participant's Normal Retirement Date
            or his Postponed Retirement Date.

      (b)   The Committee shall make every reasonable effort to furnish each
            Participant, by personal delivery or first class mail, the following
            information not less than thirty (30) days nor more than ninety (90)
            days prior to the date benefit payments are scheduled to commence:

            (i)   the terms and conditions of the 50% Joint and Survivor
                  Annuity,

            (ii)  the Participant's right to make, and the effect of, an
                  election to waive the 50% Joint and Survivor Annuity,

            (iii) the rights of the Participant's Spouse under the Plan,

            (iv)  the right to make, and the effect of, a revocation of a
                  previous election to waive the 50% Joint and Survivor Annuity,
                  and

            (v)   the relative values of the various optional forms of benefit
                  payments under the Plan.

            The Employer may also permanently post in the Employers office or
            offices the information described in (i) through (v) above in a
            manner that is reasonably calculated to reach the attention of each
            Participant.

      (c)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), the Participant may file an election form to receive his
            vested interest in the Net Value of his Accounts in any one of the
            optional forms of benefit payment set forth in Section 7.6. Such
            form must be filed with the Committee during the ninety (90) day
            election period ending on the date benefit payments are scheduled to
            commence.

      (d)   If a Participant who incurs a Termination of Service for any reason
            other than death, files an election with the Committee to receive an
            optional form of benefit payment in accordance with the provisions
            of Section 7.6, and dies before the entire vested interest in the
            Net Value of his Accounts has been distributed:

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            (i)   if the Net Value of a Participant's Accounts was distributed
                  by the purchase of an annuity contract, the remainder, if any,
                  of such vested interest shall be paid in accordance with the
                  provisions of such annuity contract;

            (ii)  if the Participant had elected to receive and had begun
                  receiving a distribution in the form of installments, the
                  Beneficiary shall receive distributions over the remaining
                  installment period, at the times set forth in such election.
                  If the Beneficiary designated to receive payments under the
                  installment form of benefit payments dies after the
                  commencement of payments to the Participant but prior to the
                  earlier of the end of the installment period or the date of
                  the Participant's death, the Participant shall, subject to the
                  spousal consent requirements of Section 7.2(a), have the right
                  to designate another Beneficiary, provided such designation is
                  executed and filed with the Committee prior to the
                  Participant's death. If there is no Beneficiary, the remaining
                  vested interest in the Net Value of his Accounts shall be
                  payable in a lump sum to the executor or administrator of his
                  estate, or, if no such executor or administrator is appointed
                  and qualifies within a time which the Committee shall, in its
                  sole and absolute discretion, deem to be reasonable, then to
                  such one or more of the descendants and blood relatives of
                  such deceased Participant as the Committee, in its sole and
                  absolute discretion, may select;

            (iii) if the Participant had elected to receive a deferred lump sum
                  distribution, the Participant's Beneficiary shall receive a
                  lump sum distribution as of the earlier of: (A) the Valuation
                  Date set forth in the Participant's election or (B) the last
                  Valuation Date which occurs within one (1) year of the
                  Participant's death;

            (iv)  if the Participant had elected to receive an immediate lump
                  sum distribution, the Participant's Beneficiary shall receive
                  a lump sum distribution as of the Valuation Date set forth in
                  the Participant's election;

            (v)   if the Participant had elected to receive an annuity and the
                  annuity contract had not yet been purchased, the Participant's
                  Beneficiary shall, by completing and filing the election form
                  prescribed by the Committee, elect to receive the distribution
                  as a Straight Life Annuity or one of the optional forms of
                  benefit payment set forth in Section 7.8(f));

            (vi)  if the Participant had elected that a lump sum distribution be
                  paid in a Direct Rollover pursuant to Section 7.9 and such
                  distribution had not yet been made, the Participant's
                  Beneficiary shall, by completing and filing the election form
                  prescribed by the Committee, elect to receive the distribution
                  as a Straight Life Annuity or in one of the optional forms of
                  benefit payment set forth in Section 7.8(f));

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            (vii) Notwithstanding the foregoing, if the Beneficiary is the
                  Participant's Spouse and if benefits are payable to such
                  Beneficiary as an immediate or deferred lump sum distribution,
                  such Spouse may defer the distribution up to the date on which
                  the Participant would have attained age seventy and one-half
                  (70-1/2).

      (e)   If an Participant who incurs a Termination of Service is reemployed
            by the Employer, upon such Participant's subsequent Termination of
            Service his prior election to receive a distribution in a form other
            than the normal form of benefit payment set forth in subsection (a)
            shall be null and void and the vested interest in the Net Value of
            his Accounts shall be distributed to him in accordance with the
            provisions of subsection (a).

      (f)   An Employee who incurs a Termination of Service, has elected to
            receive a distribution in the form of installments and is reemployed
            by the Employer prior to the distribution of the entire vested
            interest in the Net Value of his Accounts in accordance with the
            provisions of Section 7.6(e), shall not be eligible to receive or to
            continue to receive such distribution during his period of
            reemployment with the Employer. Upon such Employee's subsequent
            Termination of Service, his prior election to receive a distribution
            in the form of installments shall be null and void and the vested
            interest in the Net Value of his Accounts shall be distributed to
            him in accordance with the provisions of subsection (a).

      (g)   If a Participant incurs a Termination of Service for any reason and
            the vested interest in the Net Value of the Participant's Accounts
            is equal to or less than three thousand five hundred dollars
            ($3,500), (and effective January 1, 1998, five thousand dollars
            ($5,000)), a lump sum distribution of the vested interest in the Net
            Value of his Accounts shall be made to the Participant within seven
            (7) days of the Valuation Date coincident with the date of receipt
            by the Trustees of the proper documentation that such Participant
            incurred a Termination of Service.

      (d)   A Participant's vested interest in the Net Value of his Accounts in
            the Employer Stock Fund shall be distributed to the Participant by
            the Separate Agency as soon as administratively possible following
            the date the Employer is informed by the Trustees of the
            Participant's vested interest in such Investment Accounts. The
            distribution shall be made in accordance with Section 7.11 and the
            terms and provisions of the Separate Agreement.

7.6   Optional Forms of Benefit Payment upon Retirement, Disability or
      Termination of Service

      (a)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may file an
            election form to receive a distribution of the vested interest in
            the Net Value of his Accounts by the purchase of a 100% Joint and
            Survivor Annuity, a 75% Joint and

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            Survivor Annuity or a 50% Joint and Survivor Annuity or a Period
            Certain and Life Annuity. Such form may, subject to the spousal
            consent requirements of Section 7.2(a), include an election to
            designate a Beneficiary who is other than his Spouse. Payment of
            benefits to the Participant shall commence as of the later of the
            Participant's Normal Retirement Date or his Postponed Retirement
            Date. Notwithstanding the foregoing sentence, such form may include
            an election to receive a distribution commencing on any date
            coincident with or next following his Early Retirement Date or, if
            applicable, the date of his Disability.

      (b)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), file an
            election form to receive a distribution of the vested interest in
            the Net Value of his Accounts by the purchase of a Straight Life
            Annuity. Payment of benefits to the Participant shall commence as of
            the later of the Participant's Normal Retirement Date or his
            Postponed Retirement Date. Notwithstanding the foregoing sentence,
            such form may include an election to receive a distribution
            commencing on any date coincident with or next following his Early
            Retirement Date or, if applicable, the date of his Disability.

      (c)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a) and the
            required minimum distribution provisions of Sections 7.10(b) and
            7.10(c), file an election form to receive the vested interest in the
            Net Value of his Accounts as a lump sum distribution as of any
            Valuation Date following his Termination of Service and prior to his
            Normal Retirement Date; provided, however, that the Valuation Date
            may not be later than thirteen (13) months following his Termination
            of Service. The vested interest in the Net Value of his Accounts
            shall be distributed to such Participant as a lump sum distribution
            within seven (7) days of the Valuation Date coincident with the date
            of receipt by the Trustees of the proper documentation indicating
            the Participant's distribution date.

      (d)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), elect to
            defer receipt of the vested interest in the Net Value of his
            Accounts beyond his Normal Retirement Date or Postponed Retirement
            Date. If such an election is made, the vested interest in the Net
            Value of his Accounts shall continue to be held in the Trust Fund.
            Subject to the required minimum distribution provisions of Sections
            7.10(b) and 7.10(c), the vested interest in the Net Value of his
            Accounts shall be distributed to such Participant as a lump sum
            distribution within seven (7) days of the Valuation Date coincident
            with the

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            date of receipt by the Trustees of the proper documentation
            indicating the Employee's deferred distribution date.

      (e)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a) and the
            required minimum distribution provisions of Sections 7.10(b) and
            7.10(c), file an election form to receive the vested interest in the
            Net Value of his Accounts in the form of equal monthly, quarterly or
            annual installments over a period not to exceed ten (10) years. If a
            Participant elects to receive his benefit pursuant to this
            subsection (e), the installment period may not extend beyond the
            life expectancy of such Participant or the life expectancy of such
            Participant and his Beneficiary. The vested interest in the Net
            Value of his Accounts shall be determined as of such Valuation Date
            or Valuation Dates in each such Plan Year as may be elected by such
            Participant and shall be based on the respective values of the
            Participant's Units in each Investment Account as of such Valuation
            Date or Valuation Dates. The amount of the installment payment shall
            be distributed by the redemption of Units from the Participant's
            Accounts on a pro rata basis among such Participant's Investment
            Accounts. Any portion of the vested interest in the Net Value of the
            Accounts of such Participant which shall not have been so paid shall
            continue to be held for his benefit or for the benefit of his
            Beneficiary in the Participant's Investment Accounts.

      (f)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), file an
            election form that a lump sum distribution equal to the vested
            interest in the Net Value of his Accounts be paid in a Direct
            Rollover pursuant to Section 7.9. The amount of such lump sum
            distribution shall be determined as of the Valuation Date coincident
            with the date of receipt by the Trustees of the proper
            documentation.

      (g)   In lieu of the normal form of benefit payment set forth in Section
            7.5(a), a Participant who incurs a Termination of Service as of his
            Retirement Date or incurs a Termination of Service due to Disability
            or incurs a Termination of Service for any other reason may, subject
            to the spousal consent requirements of Section 7.2(a), file an
            election form to receive the vested interest in the Net Value of his
            Accounts in the form of a partial lump sum distribution as of some
            Valuation Date following his Termination of Service. Subject to the
            required minimum distribution provisions of Sections 7.10(b) and
            7.10(c), the partial lump sum distribution shall be distributed to
            such Employee within seven (7) days of the Valuation Date coincident
            with the date of receipt by the Trustees of the proper documentation
            indicating the Employee's distribution date; and the balance

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            of the vested interest in the Net Value of his Accounts shall be
            payable in the form of one (1) of the following:

            (i)   monthly, quarterly or annual installments over a period not to
                  exceed ten (10) years, as set forth in subsection (e); or

            (ii)  the purchase of an annuity, as set forth in Section
                  7.1(a)(ii), (iii), (iv), (v) or (vi).

7.7   Designation of Beneficiary

      (a)   Subject to the spousal consent requirements of Section 7.2(a), a
            Participant may, from time to time, designate any person or persons
            as Beneficiary or contingent Beneficiary to receive a benefit under
            Section 7.5 or Section 7.8 upon the death of the Participant. For
            purposes of this Section 7.7, "person" includes an individual, a
            trust, an estate, or any other entity designated as a Beneficiary.

      (b)   The designation of a Beneficiary or contingent Beneficiary shall be
            made in writing by the Participant in the form and manner prescribed
            by the Committee and shall not be effective unless such form is (i)
            filed prior to the death of such person and (ii) complies with the
            spousal consent requirements of Section 7.2(a). If more than one (1)
            person is designated as a Beneficiary, each designated Beneficiary
            in such Beneficiary classification shall have an equal share, unless
            the Participant directs otherwise.

      (c)   The designation of a Beneficiary or contingent Beneficiary which is
            filed with the Committee will revoke all prior Beneficiary
            designations filed with the Committee. The number of Beneficiary
            designations and revocations shall not be limited.

      (d)   If the Beneficiary or contingent Beneficiary designated to receive
            payments under an optional form of benefit set forth in Section 7.6
            dies prior to the commencement of benefit payments to the
            Participant, the terms and conditions of such election shall be
            deemed null and void and the normal form of benefit set forth in
            Section 7.5(a) shall be reinstated. Subject to the spousal consent
            requirements of Section 7.2(a), the Participant shall have the right
            to elect another optional form of benefit payment and another
            Beneficiary, provided such election is completed and filed with the
            Committee prior to the earlier of: (i) the Participant's death, or
            (ii) the date the Participant's benefit payments are scheduled to
            commence. Such election shall become effective on the date the
            Participant's benefit payments are scheduled to commence.

      (e)   If the Spouse or other Beneficiary designated to receive payments
            under Section 7.8(b) or Section 7.8(e), dies prior to the death of
            the Participant, the terms and conditions of such election shall be
            null and void. If the Participant is married, the normal form of
            benefit set forth in Section 7.8(b)(ii) shall be reinstated. Subject
            to the spousal consent requirements of Section 7.2(a), the
            Participant shall have the right to elect another Beneficiary,
            provided such election is completed and filed with the Committee
            prior to

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            the earlier of: (i) the Participant's death, or (ii) the date the
            Participant's benefit payments are scheduled to commence. Such
            election shall become effective on the date the Participant's
            benefit payments are scheduled to commence.

      (f)   If a Participant fails to designate a Beneficiary other than a
            Spouse to receive the Preretirement Death Benefit set forth in
            Section 7.8, or if the Beneficiary and contingent Beneficiary
            designated by a Participant die prior to such Participant's death
            and before the entire vested interest in the Net Value of the
            Participant's Accounts has been distributed, such Participant's
            benefits shall be paid as a lump sum to the executor or
            administrator of his estate.

7.8   Preretirement Death Benefits

      (a)   If a Participant dies prior to the date benefits are to commence and
            the vested interest in the Net Value of the Participant's Accounts
            is equal to or less than three thousand five hundred dollars
            ($3,500) (and effective January 1, 1998, five thousand dollars
            ($5,000)), a lump sum distribution of the vested interest in the Net
            Value of his Accounts shall be made to the Participant's Beneficiary
            within seven (7) days of the Valuation Date coincident with the date
            of receipt by the Trustees of the proper documentation indicating
            the date of the Participant's death.

      (b)   If a Participant dies prior to the date benefits are to commence and
            the vested interest in the Net Value of the Participant's Accounts
            exceeds three thousand five hundred dollars ($3,500) (and effective
            January 1, 1998, five thousand dollars ($5,000)), the Preretirement
            Death Benefit for a Participant shall be as follows:

            (i)   if a Participant had a vested interest in the Net Value of his
                  Accounts and died (A) prior to the date benefit payments are
                  scheduled to commence and (B) with no surviving Spouse, the
                  vested interest in the Net Value of his Accounts shall be made
                  to the Participant's designated Beneficiary by the purchase of
                  a Straight Life Annuity. Payment of benefits shall commence
                  within one (1) year of the Participant's death;

            (ii)  if a Participant had a vested interest in the Net Value of his
                  Accounts and died (A) prior to the date benefits payments are
                  scheduled to commence and (B) with a surviving Spouse, the
                  vested interest in the Net Value of his Accounts shall be made
                  to the surviving Spouse by the purchase of a Straight Life
                  Annuity. Payment of benefits to the Participant's Spouse shall
                  commence as of the later of the date the Participant would
                  have attained his Normal Retirement Date or the date of the
                  Participant's death.

      (c)   Notwithstanding the provisions of subsection (b)(ii), the surviving
            Spouse of a Participant may elect that the Straight Life Annuity be
            purchased with benefits to commence on a date selected by the Spouse
            which occurs on any date commencing

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            with the Participant's date of death and ending on the date the
            Participant would have attained age seventy and one-half (70-1/2).

      (d)   In lieu of the normal form of benefit payment set forth in
            subsection (b)(ii), a Participant may, subject to the spousal
            consent requirements of Section 7.2(a), elect to waive the
            Preretirement Death Benefit. Such waiver shall designate a
            Beneficiary who is other than the Participant's Spouse.

      (e)   Consent by a Spouse to waive the Preretirement Death Benefit is not
            binding on a subsequent Spouse. If a Participant has elected, with
            spousal consent, to waive the Preretirement Death Benefit and is
            subsequently widowed or divorced and thereafter remarried, the
            Preretirement Death Benefit is automatically reinstated upon
            remarriage, subject to any subsequent election by the Participant,
            with the consent of his new Spouse, to waive such coverage.

      (f)   In lieu of the normal form of Preretirement Death Benefit set forth
            in subsection (b), upon the Participant's death the Beneficiary of a
            Participant may, by completing and filing the election form
            prescribed by the Committee, elect to receive the vested interest in
            the Net Value of a Participant's Accounts in one of the following
            optional forms of benefit payment:

            (i)   as a lump sum distribution as of any Valuation Date following
                  the Participant's death; provided, however, that the Valuation
                  Date may not be later than one (1) year following the
                  Participant's death. The vested interest in the Net value of
                  the Participant's Accounts shall be distributed to such person
                  as a lump sum distribution within seven (7) days of the
                  Valuation Date coincident with the date of receipt by the
                  Trustees of the proper documentation indicating the
                  distribution date.

            (ii)  in the form of equal monthly, quarterly or annual installments
                  over a period not to exceed ten (10) years. The vested
                  interest in the Net value of the Participant's Accounts shall
                  be determined as of such Valuation Date or Valuation Dates in
                  each such Plan Year as may be elected by such person and shall
                  be based on the respective values of the deceased
                  Participant's Units in each Investment Account as of such
                  Valuation Date or Valuation Dates. The amount of the
                  installment payment shall be distributed by the redemption of
                  Units from the deceased Participant's Accounts on a pro rata
                  basis among such deceased Participant's Investment Accounts.
                  Any portion of the vested interest in the Net Value of the
                  Accounts of such deceased Participant which shall not have
                  been so paid shall continue to be held for the benefit of the
                  surviving Spouse or other Beneficiary or for the benefit of
                  the beneficiary designated by such person. If the surviving
                  Spouse or other Beneficiary elects to receive his benefit
                  pursuant to this subsection (f)(ii), installment payments
                  shall begin to such

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                  person within one (1) year of the Participant's death and the
                  installment period may not extend beyond the life expectancy
                  of such person.

            (iii) as a lump sum distribution equal to the vested interest in the
                  Net Value of the Participant's Accounts made payable in a
                  Direct Rollover pursuant to Section 7.9. Such lump sum
                  distribution shall be made within seven (7) days of the
                  Valuation Date coincident with the date of receipt by the
                  Trustees of the proper documentation.

            (iv)  in the form of a partial distribution as of some Valuation
                  Date following his Termination of Service. Subject to the
                  required minimum distribution provisions of Sections 7.10(b)
                  and 7.10(c), the partial distribution shall be distributed to
                  such Employee within seven (7) days of the Valuation Date
                  coincident with the date of receipt by the Trustees of the
                  proper documentation indicating the Employee's distribution
                  date; and the balance of the vested interest in the Net Value
                  of his Accounts shall be payable in the form of one of the
                  following:

                  (I)   installments over a period not to exceed ten (10) years,
                        as set forth in subsection (f)(ii);

                  (II)  the purchase of a Straight Life Annuity, as set forth in
                        subsections (b) and (c), if applicable; or

                  (III) a lump sum distribution made payable in a Direct
                        Rollover pursuant to Section 7.9 and as set forth in
                        subsection (iii).

            Notwithstanding the foregoing provisions to the contrary, if the
            surviving Spouse of a deceased Participant elects one of these
            optional forms of benefit payment set forth above, such Spouse may
            elect to have benefits commence on a date selected by such Spouse
            which occurs on any date commencing with the Participant's date of
            death and ending on the date the Participant would have attained age
            seventy and one-half (70-1/2).

7.9   Direct Rollover of Eligible Rollover Distributions

      For purposes of this Section 7.9, the following definitions shall apply:

      (a)   "Direct Rollover" means a payment by the Plan to the Eligible
            Retirement Plan specified by the Distributee.

      (b)   "Distributee" means an Employee or former Employee. In addition, the
            Employee's or former Employee's surviving spouse and the Employee's
            or former Employee's Spouse or former spouse who is the alternate
            payee under a qualified domestic relations order, as defined in
            Section 414(p) of the Code, are Distributees with regard to the
            interest of the Spouse or former spouse.

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      (c)   "Eligible Retirement Plan" means an individual retirement account
            described in Section 408(a) of the Code, an individual retirement
            annuity described in Section 408(b) of the Code, an annuity plan
            described in Section 403(a) of the Code, or a qualified trust
            described in Section 401(a) of the Code, that accepts the
            Distributee's Eligible Rollover Distribution. However, in the case
            of an Eligible Rollover Distribution to the surviving Spouse, an
            Eligible Retirement Plan is an individual retirement account or
            individual retirement annuity.

      (d)   "Eligible Rollover Distribution" means any distribution of all or
            any portion of the balance to the credit of the Distributee, except
            that an Eligible Rollover Distribution does not include: any
            distribution that is one of a series of substantially equal periodic
            payments (not less frequently than annually) made for the life (or
            life expectancy) of the Distributee or the joint lives (or joint
            life expectancies) or the Distributee and the Distributee's
            designated Beneficiary, or for a specified period of ten (10) years
            or more; any distribution to the extent such distribution is
            required under Section 401(a)(9) of the Code; and the portion of any
            distribution that is not includable in gross income (determined
            without regard to the exclusion for net unrealized appreciation with
            respect to employer securities); and effective January 1, 2000, any
            Hardship distribution described in Section 401(k)(2)(B)(i)(IV) of
            the Code.

      Notwithstanding any provision of the Plan to the contrary that would
      otherwise limit a Distributee's election under this Section, a Distributee
      may elect, at the time and in the manner prescribed by the Plan
      Administrator, to have any portion of an Eligible Rollover Distribution
      paid directly to an Eligible Retirement Plan specified by the Distributee
      in a Direct Rollover.

7.10  Minimum Distribution Requirements

      (a)   General Rules

            (i)   Effective Date. The provisions of this Section 7.10 will apply
                  for purposes of determining required minimum distributions for
                  calendar years beginning with the 2003 calendar year.

            (ii)  Precedence. The requirements of this Section 7.10 will take
                  precedence over any inconsistent provisions of the Plan.

            (iii) Requirements of Treasury Regulations Incorporated. All
                  distributions required under this Section 7.10 will be
                  determined and made in accordance with the Treasury
                  regulations under Section 401(a)(9) of the Code.

            (iv)  TEFRA Section 242(b)(2) Elections. Notwithstanding the other
                  provisions of this Section 7.10, distributions may be made
                  under a designation made before January 1, 1984, in accordance
                  with Section 242(b)(2) of the Tax Equity and Fiscal
                  Responsibility Act (TEFRA), and the provisions of the Plan, if
                  applicable, that relate to Section 242(b)(2) of TEFRA.

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      (b)   Time and Manner of Distribution

            (i)   Required Beginning Date. The Participant's entire interest
                  will be distributed, or begin to be distributed, to the
                  Participant no later than the Participant's Required Beginning
                  Date.

            (ii)  Death of Participant Before Distributions Begin. If the
                  Participant dies before distributions begin, the Participant's
                  entire interest will be distributed, or begin to be
                  distributed, no later than as follows:

                  (A)   If the Participant's surviving Spouse is the
                        Participant's sole Designated Beneficiary, distributions
                        to the surviving Spouse will begin by December 31 of the
                        calendar year immediately following the calendar year in
                        which the Participant died, or by December 31 of the
                        calendar year in which the Participant would have
                        attained age 70 1/2, if later.

                  (B)   If the Participant's surviving Spouse is not the
                        Participant's sole Designated Beneficiary, distributions
                        to the Designated Beneficiary will begin by December 31
                        of the calendar year immediately following the calendar
                        year in which the Participant died.

                  (C)   If there is no Designated Beneficiary as of September 30
                        of the year following the year of the Participant's
                        death, the Participant's entire interest will be
                        distributed by December 31 of the calendar year
                        containing the fifth (5th) anniversary of the
                        Participant's death.

                  (D)   If the Participant's surviving Spouse is the
                        Participant's sole Designated Beneficiary and the
                        surviving Spouse dies after the Participant but before
                        distributions to the surviving Spouse begin, this
                        Section 7.10(b)(ii), other than Section 7.10(b)(ii)(A),
                        will apply as if the surviving Spouse were the
                        Participant.

                  For purposes of this Section 7.10(b)(ii) and Section 7.10(d),
                  unless Section 7.10(b)(ii)(D) applies, distributions are
                  considered to begin on the Participant's Required Beginning
                  Date. If Section 7.10.(b)(ii)(D) applies, distributions are
                  considered to begin on the date distributions are required to
                  begin to the surviving Spouse under Section 7.10(b)(ii)(A). If
                  distributions under an annuity purchased from an insurance
                  company, if applicable, irrevocably commence to the
                  Participant before the Participant's Required Beginning Date
                  (or to the Participant's surviving Spouse before the date
                  distributions are required to begin to the surviving Spouse
                  under Section 7.10(b)(ii)(A), the date distributions are
                  considered to begin is the date distributions actually
                  commence.

            (iii) Election to Apply 5-Year Rule to Distributions to Designated
                  Beneficiaries. If the Participant dies before distributions
                  begin and there is a Designated Beneficiary, distribution to
                  the Designated Beneficiary is not required to begin by the
                  date specified in Section 7.10(b)(ii), but the Participant's
                  entire interest will be distributed to the Designated
                  Beneficiary by December 31 of the calendar year containing the
                  fifth anniversary of the Participant's death. If the
                  Participant's surviving Spouse is the Participant's sole

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                  Designated Beneficiary and the surviving Spouse dies after the
                  Participant but before distributions to either the Participant
                  or the surviving Spouse begin, this election will apply as if
                  the surviving Spouse were the Participant.

            (iv)  Election to Allow Participants or Beneficiaries to Elect
                  5-Year Rule. Participants or Beneficiaries may elect on an
                  individual basis whether the 5-year rule or the Life
                  Expectancy rule in Sections 7.10(b)(ii) and 7.10(d)(ii)
                  applies to distributions after the death of a Participant who
                  has a Designated Beneficiary. The election must be made no
                  later than the earlier of September 30 of the calendar year in
                  which distribution would be required to begin under Section
                  7.10(b)(ii), or by September 30 of the calendar year which
                  contains the fifth anniversary of the Participant's (or, if
                  applicable, surviving Spouse's) death. If neither the
                  Participant nor Beneficiary makes an election under this
                  subsection, distributions will be made in accordance with
                  Sections 7.10(b)(ii) and 7.10(d)(ii) and, if applicable, the
                  elections in Section 7.10(b)(iii) above.

            (v)   Election to Allow Designated Beneficiary Receiving
                  Distributions Under 5-Year Rule to Elect Life Expectancy
                  Distributions. A Designated Beneficiary who is receiving
                  payments under the 5-year rule may make a new election to
                  receive payments under the Life Expectancy rule until December
                  31, 2003, provided that all amounts that would have been
                  required to be distributed under the Life Expectancy rule for
                  all Distribution Calendar Years before 2004 are distributed by
                  the earlier of December 31, 2003 or the end of the 5-year
                  period.

            (vi)  Forms of Distribution. Unless the Participant's interest is
                  distributed in the form of an annuity purchased from an
                  insurance company or in a single sum on or before the Required
                  Beginning Date, as of the first Distribution Calendar Year
                  distributions will be made in accordance with Sections 7.10(c)
                  and (d). If the Participant's interest is distributed in the
                  form of an annuity purchased from an insurance company,
                  distributions thereunder will be made in accordance with the
                  requirements of Section 401(a)(9) of the Code and the Treasury
                  regulations.

      (c)   Required Minimum Distributions During Participant's Lifetime

            (i)   Amount of Required Minimum Distribution For Each Distribution
                  Calendar Year. During the Participant's lifetime, the minimum
                  amount that will be distributed for each Distribution Calendar
                  Year is the lesser of:

                  (A)   the quotient obtained by dividing the Participant's
                        Accounts by the distribution period in the Uniform
                        Lifetime Table set forth in Section 1.401(a)(9)-9 of the
                        Treasury regulations, using the Participant's age as of
                        the Participant's birthday in the Distribution Calendar
                        Year; or

                  (B)   if the Participant's sole Designated Beneficiary for the
                        Distribution Calendar Year is the Participant's Spouse,
                        the quotient obtained by dividing the Participant's
                        Accounts by the number in the Joint and Last Survivor
                        Table set forth in Section

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                        1.401(a)(9)-9 of the Treasury regulations, using the
                        Participant's and Spouse's attained ages as of the
                        Participant's and Spouse's birthdays in the Distribution
                        Calendar Year.

            (ii)  Lifetime Required Minimum Distributions Continue Through Year
                  of Participant's Death. Required minimum distributions will be
                  determined under this Section 7.10(c) beginning with the first
                  Distribution Calendar Year and up to and including the
                  Distribution Calendar Year that includes the Participant's
                  date of death.

      (d)   Required Minimum Distributions After Participant's Death

            (i)   Death On or After Date Distributions Begin

                  (A)   Participant Survived by Designated Beneficiary. If the
                        Participant dies on or after the date distributions
                        begin and there is a Designated Beneficiary, the minimum
                        amount that will be distributed for each Distribution
                        Calendar Year after the year of the Participant's death
                        is the quotient obtained by dividing the Participant's
                        Accounts by the longer of the remaining Life Expectancy
                        of the Participant or the remaining Life Expectancy of
                        the Participant's Designated Beneficiary, determined as
                        follows:

                        (I)   The Participant's remaining Life Expectancy is
                              calculated using the age of the Participant in the
                              year of death, reduced by one for each subsequent
                              year.

                        (II)  If the Participant's surviving Spouse is the
                              Participant's sole Designated Beneficiary, the
                              remaining Life Expectancy of the surviving Spouse
                              is calculated for each Distribution Calendar Year
                              after the year of the Participant's death using
                              the surviving Spouse's age as of the Spouse's
                              birthday in that year. For Distribution Calendar
                              Years after the year of the surviving Spouse's
                              death, the remaining Life Expectancy of the
                              surviving Spouse is calculated using the age of
                              the surviving Spouse as of the Spouse's birthday
                              in the calendar year of the Spouse's death,
                              reduced by one for each subsequent calendar year.

                        (III) If the Participant's surviving Spouse is not the
                              Participant's sole Designated Beneficiary, the
                              Designated Beneficiary's remaining Life Expectancy
                              is calculated using the age of the Beneficiary in
                              the year following the year of the Participant's
                              death, reduced by one for each subsequent year.

                  (B)   No Designated Beneficiary. If the Participant dies on or
                        after the date distributions begin and there is no
                        Designated Beneficiary as of September 30 of the year
                        after the year of the Participant's death, the minimum
                        amount that will be distributed for each Distribution
                        Calendar Year after the year of the Participant's death
                        is the quotient obtained by dividing the Participant's
                        Accounts by the Participant's remaining Life Expectancy
                        calculated using the age of the Participant in the year
                        of death, reduced by one for each subsequent year.

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            (ii)  Death Before Date Distributions Begin

                  (A)   Participant Survived by Designated Beneficiary. If the
                        Participant dies before the date distributions begin and
                        there is a Designated Beneficiary, the minimum amount
                        that will be distributed for each Distribution Calendar
                        Year after the year of the Participant's death is the
                        quotient obtained by dividing the Participant's Accounts
                        by the remaining Life Expectancy of the Participant's
                        Designated Beneficiary, determined as provided in
                        Section 7.10(d)(i).

                  (B)   No Designated Beneficiary. If the Participant dies
                        before the date distributions begin and there is no
                        Designated Beneficiary as of September 30 of the year
                        following the year of the Participant's death,
                        distribution of the Participant's entire interest will
                        be completed by December 31 of the calendar year
                        containing the fifth anniversary of the Participant's
                        death.

                  (C)   Death of Surviving Spouse Before Distributions to
                        Surviving Spouse Are Required to Begin. If the
                        Participant dies before the date distributions begin,
                        the Participant's surviving Spouse is the Participant's
                        sole Designated Beneficiary, and the surviving Spouse
                        dies before distributions are required to begin to the
                        surviving Spouse under Section 7.10(b)(ii)(A), this
                        Section 7.10(d)(ii) will apply as if the surviving
                        Spouse were the Participant.

      (e)   Definitions

            For purposes of this Section 7.10, the following words and phrases
            shall have the meanings hereafter ascribed to them:

            (i)   Designated Beneficiary. The individual who is designated as
                  the Beneficiary under Section 1.11 of the Plan and is the
                  Designated Beneficiary under Section 401(a)(9) of the Code and
                  Section 1.401(a)(9)-1, Q&A-4, of the Treasury regulations.

            (ii)  Distribution Calendar Year. A calendar year for which a
                  minimum distribution is required. For distributions beginning
                  before the Participant's death, the first Distribution
                  Calendar Year is the calendar year immediately preceding the
                  calendar year which contains the Participant's Required
                  Beginning Date. For distributions beginning after the
                  Participant's death, the first Distribution Calendar Year is
                  the calendar year in which distributions are required to begin
                  under Section 7.10(b)(ii). The required minimum distribution
                  for the Participant's first Distribution Calendar Year will be
                  made on or before the Participant's Required Beginning Date.
                  The required minimum distribution for other Distribution
                  Calendar Years, including the required minimum distribution
                  for the Distribution Calendar Year in which the Participant's
                  Required Beginning Date occurs, will be made on or before
                  December 31 of that Distribution Calendar Year.

            (iii) Life Expectancy. Life Expectancy as calculated by use of the
                  Single Life Table in Section 1.401(a)(9)-9 of the Treasury
                  regulations.

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      (iv)  Participant's Accounts. The Accounts of the last Valuation Date in
            the calendar year immediately preceding the Distribution Calendar
            Year (valuation calendar year) increased by the amount of any
            contributions made and allocated or Forfeitures allocated to the
            Accounts as of dates in the valuation calendar year after the
            Valuation Date and decreased by distributions made in the valuation
            calendar year after the Valuation Date. The Accounts for the
            valuation calendar year includes any amounts rolled over or
            transferred to the Plan either in the valuation calendar year or in
            the Distribution Calendar Year if distributed or transferred in the
            valuation calendar year.

      (v)   Required Beginning Date. The date specified in Section 7.11(b) or
            (c), whichever is applicable.

7.11  Latest Commencement of Benefits

      (a)   Unless the Participant elects otherwise in accordance with the Plan,
            in no event shall the payment of benefits commence later than the
            sixtieth (60th) day after the close of the Plan Year in which the
            latest of the following events occur: (i) the attainment by the
            Participant of age sixty-five (65), (ii) the tenth (10th)
            anniversary of the year in which the Participant commenced
            participation in the Plan or Prior Plan, or (iii) the termination of
            the Participant's employment with the Employer; provided, however,
            that if the amount of the payment required to commence on the date
            determined under this sentence cannot be ascertained by such date, a
            payment retroactive to such date may be made no later than sixty
            (60) days after the earliest date on which the amount of such
            payment can be ascertained under the Plan.

      (b)   Distributions to five-percent owners:

            The vested interest in the Net Value of the Accounts of a
            five-percent owner (as described in Section 416(i) of the Code and
            determined with respect to the Plan Year ending in the calendar year
            in which such individual attains age seventy and one-half (70-1/2))
            must be distributed or commence to be distributed no later than the
            first day of April following the calendar year in which such
            individual attains age seventy and one-half (70-1/2). The vested
            interest in the Net Value of the Accounts of a Participant who is
            not a five-percent owner (as described in Section 416(i) of the
            Code) for the Plan Year ending in the calendar year in which such
            person attains age seventy and one-half (70-1/2) but who becomes a
            five-percent owner (as described in Section 416(i) of the Code) for
            a later Plan Year must be distributed or commence to be distributed
            no later than the first day of April following the last day of the
            calendar year that includes the last day of the first Plan Year for
            which such individual is a five-percent owner (as described in
            Section 416(i) of the Code).

      (c)   Subject to Section 7.1(f), distributions to other than five-percent
            owners:

            The vested interest in the Net Value of the Accounts of a
            Participant who is not a five-percent owner and who attained age
            seventy and one-half (70-1/2) prior to January 1,

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            1988, must be distributed or commence to be distributed no later
            than the first day of April following the calendar year in which
            occurs the later of: (i) his termination of employment or (ii) his
            attainment of age seventy and one-half (70-1/2).

            Except as otherwise provided in the following paragraph, the vested
            interest in the Net Value of the Accounts of any Participant who
            attains age seventy and one-half (70-1/2) after December 31, 1987,
            must be distributed or commence to be distributed no later than the
            first day of April following the calendar year in which such
            individual attains age seventy and one-half (70-1/2).

            Effective January 1, 1997, an Employee otherwise required to receive
            a distribution under the preceding paragraph, may elect to defer
            distribution of the Net Value of his Accounts to the date of his
            termination of employment.

            Notwithstanding the foregoing, the vested interest in the Net Value
            of the Accounts of (I) any Employee who becomes a Participant on or
            after January 1, 1997 or (II) any Employee who attains age seventy
            and one-half (70-1/2) in a calendar year beginning on or after
            January 1, 2003, must be distributed or commence to be distributed
            no later than the first day of April following the calendar year in
            which occurs the later of: (1) his termination of employment or (2)
            his attainment of age seventy and one-half (70-1/2).

7.12  Manner of Payment of Distributions from the Employer Stock Fund

      Distributions from the Employer Stock Fund shall be made to Participants
      and Beneficiaries in cash, unless the Participant or Beneficiary elects
      that such distributions may be made wholly or partially in shares. If the
      Participant or Beneficiary elects that such distributions may be made
      wholly or partially in shares, subject to such terms and conditions as may
      be established from time to time by the Committee, the maximum number of
      shares to be distributed shall be equal to the number of whole shares that
      could be purchased on the date of distribution based on the fair market
      value of shares determined as of the date of payment and on the fair
      market value of the Participant's Units in the Employer Stock Fund on the
      valuation date preceding the distribution. An amount of money equal to any
      remaining amount of the payment that is less than the fair market value of
      a whole share shall be distributed in cash. For purposes of this Section
      7.12, the fair market value of a share shall be determined on a uniform
      and nondiscriminatory basis in such manner as the Separate Agency may, in
      its discretion, prescribe.

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                                 ARTICLE VIII -
                              LOANS TO PARTICIPANTS

8.1   Definitions and Conditions

      (a)   For purposes of this Article VIII, the following terms and phrases
            shall have the meanings hereafter ascribed to them:

            (i)   "Borrower" means a Participant or a "Party in Interest" (as
                  defined under Section 3(14) of ERISA) who maintains an
                  Account, provided such Participant or Party in Interest is not
                  receiving a benefit payment in the form of installment or
                  annuity payments in accordance with the provisions of Article
                  VII, or a preretirement death benefit in accordance with the
                  provisions of Section 7.8.

            (ii)  "Loan Account" means the separate, individual account
                  established on behalf of a Borrower in accordance with the
                  provisions of Section 8.4(d).

      (b)   To the extent permitted under the provisions of this Article VIII
            and subject to the terms and conditions set forth herein and in
            Section 7.2, a Borrower may request a loan from his Accounts. Any
            loans made in accordance with this Article VIII shall not be subject
            to the provisions of Article VI.

8.2   Loan Amount

      Upon a finding by the Committee that all requirements hereunder have been
      met, a Borrower may request a loan from his Accounts, in an amount up to
      the lesser of: (a) fifty percent (50%) of the Net Value as of the close of
      business on the date the loan is processed of the Before-Tax Contribution
      Account, vested Matching Contribution Account, vested Discretionary
      Employer Contribution Account, Rollover Contribution Account and
      Nonelective Employer Contribution Account, or (b) fifty thousand dollars
      ($50,000), reduced by the highest outstanding loan balance during the
      preceding twelve (12) months. The minimum loan permitted shall be one
      thousand dollars ($1,000).

8.3   Term of Loan

      All loans shall be for a fixed term of not more than five (5) years,
      except that a loan which shall be used to acquire any dwelling which
      within a reasonable time is to be used as the principal residence of the
      Borrower, may, in the discretion of the Committee, be made for a term of
      not more than fifteen (15) years. Interest on a loan shall be based on a
      reasonable rate of interest. Such rate shall be the "prime rate" as set
      forth in the first publication of The Wall Street Journal issued during
      the month in which the Borrower requests the loan, increased by one (1)
      percentage point and rounded to the nearest quarter of one percent (1/4 of
      1%). Such rate shall remain in effect until the Loan Account is closed.

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<PAGE>

                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------

8.4   Operational Provisions

      (a)   An application for a loan shall be filed in the form and manner
            prescribed by the Committee and shall be subject to the fees, if
            any, set forth in Section 9.11. If the Committee shall approve such
            application, the Committee shall establish the amount of such loan
            and such loan shall be effected as of the Valuation Date next
            following receipt by the Trustees.

      (b)   The amount of the loan shall be distributed from the Investment
            Accounts in which the Borrower's Accounts are invested, in the
            following order of priority:

            (i)   Before-Tax Contribution Account;

            (ii)  Rollover Contribution Account;

            (iii) vested Matching Contribution Account;

            (iv)  vested Discretionary Employer Contribution Account;

            (v)   vested Nonelective Employer Contribution Account.

            Distributions from each of the foregoing Accounts shall be made in
            the following order of priority:

                  (A)   by the redemption of Units from each of the Borrower's
                        Accounts in the Trust Fund in the order set forth above,
                        on a pro rata basis from the Investment Accounts
                        thereunder, as were selected by the Participant pursuant
                        to Article VI; and

                  (B)   by the redemption of Units invested in the Employer
                        Stock Fund from each of the Borrower's Accounts invested
                        under the Separate Agreement, in the order set forth
                        above, if selected by the Borrower pursuant to Article
                        VI.

      (c)   The proceeds of a loan shall be distributed to the Borrower as soon
            as practicable after the Valuation Date as of which the loan is
            processed; provided, however, that the Borrower shall have satisfied
            such reasonable conditions as the Committee shall deem necessary,
            including, without limitation: (i) the delivery of an executed
            promissory note for the amount of the loan, including interest,
            payable to the order of the Trustees; (ii) an assignment to the Plan
            of such Borrower's interest in his Accounts to the extent of such
            loan; and (iii) if the Borrower is actively employed by the
            Employer, an authorization to the Employer to make payroll
            deductions in order to repay his loan to the Plan. The
            aforementioned promissory note shall be duly acknowledged and
            executed by the Borrower and shall be held by the Trustees, or the
            Committee as agent for the Trustees, as an asset of the Borrower's
            Loan Account pursuant to subsection (d).

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<PAGE>

                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------

      (d)   A Loan Account shall be established for each Borrower with an
            outstanding loan pursuant to this Article VIII. Each Loan Account
            shall be comprised of a Borrower's (i) executed promissory note and
            (ii) installment payments of principal and interest made pursuant to
            Section 8.5(a). Upon full payment and satisfaction of the
            outstanding Loan Account balance, a Borrower's promissory note shall
            be marked paid in full, returned to the Borrower, and his Loan
            Account thereupon closed.

      (e)   As of each Valuation Date coincident with or next succeeding each
            payment of principal and interest on a loan, the then current
            balance of each Borrower's Loan Account shall be debited by the
            amount of such payment and such amount shall be transferred for
            investment in accordance with Section 8.5(c) to the appropriate
            Borrower's Account. If the Committee established a lien against the
            Borrower's Accounts pursuant to Section 8.6(c), and foreclosure of
            such lien is deferred until the Borrower's Termination of Service
            pursuant to Section 8.6(c)(i), for each month that foreclosure of
            the lien is deferred, the then current balance of the Borrower's
            Loan Account shall be charged with interest on the unpaid principal
            and interest thereon.

      (f)   Only one (1) loan shall be outstanding to any Borrower under this
            Article VIII at any time.

      (g)   Any loans under this Article VIII shall be subject to the
            restrictions of Section 6.5.

8.5   Repayments

      (a)   If the Borrower is on the payroll of the Employer and unless
            otherwise agreed to by the Committee, repayments of loan principal,
            or the unpaid balance thereof, and interest thereon shall be made
            through payroll deductions. The first repayment shall be deducted as
            of the first payroll date occurring no later than three (3) weeks
            after the Committee submits the loan form for processing.

            If the Borrower is not on the payroll of the Employer and unless
            otherwise agreed to by the Committee, repayments of loan principal,
            or the unpaid balance thereof, and interest thereon, shall be made
            in cash or cash equivalencies to the Employer in equal monthly
            installments for payment to his Loan Account.

      (b)   Any amount repaid to the Plan by a Borrower with respect to a loan,
            including interest thereon, shall be invested as if such amount were
            a contribution to be invested in accordance with Section 6.1.

      (c)   With respect to each Borrower's Loan Account, any repayment of
            principal and interest made by a Borrower shall be credited, as of
            the Valuation Date coincident with or next succeeding such payment,
            to the Borrower's Accounts in the order of priority established
            under Section 8.4(b). No Account having a lesser degree of priority
            shall be credited until the Account having the immediately preceding
            degree of priority has

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<PAGE>

                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------

            been restored by an amount equal to that which had been borrowed
            from such Account.

      (d)   A Borrower may prepay his entire loan, plus all interest accrued and
            unpaid thereon, as of any Valuation Date. A Borrower will not be
            permitted to make partial prepayments to his or her Loan Account.

      (e)   In the event the Plan is terminated, the entire unpaid principal
            amount of the loan hereunder, together with any accrued and unpaid
            interest thereon, shall become immediately due and payable.

8.6   Default

      (a)   If a Borrower fails to make any payment on any loan when due under
            this Article VIII, the entire unpaid principal amount of such loan,
            together with any accrued and unpaid interest thereon, shall be
            deemed in default and become due and payable ninety (90) days after
            the initial date of payment delinquency.

      (b)   If a Borrower fails to make any payment on a loan and is deemed to
            be in default pursuant to subsection (a), the Committee shall
            establish a lien against the Borrower's Accounts in an amount equal
            to any unpaid principal and interest. The lien shall be foreclosed
            by applying the value of the Borrower's Loan Account (determined as
            of the next Valuation Date immediately following foreclosure) in
            satisfaction of said unpaid principal and interest as follows:

            (i)   if the Borrower is in the employment of the Employer, upon the
                  Borrower's Termination of Service; or

            (ii)  if the Borrower is not in the employment of the Employer,
                  immediately upon default.

            Thereupon, the vested interest in the balance of the Borrower's
            Accounts shall be distributed in accordance with the applicable
            provisions of the Plan.

      (c)   The Committee may, in accordance with uniform rules established by
            it, restrict the right of any Borrower who has defaulted on a loan
            from the Plan to: (i) make withdrawals and/or loans from his
            Matching Contribution Account, Before-Tax Contribution Account,
            Discretionary Employer Contribution Account, Nonelective Employer
            Contribution Account and/or Rollover Contribution Account for a
            period not exceeding twelve (12) months or (ii) if the Borrower is
            an Eligible Employee, authorize Before-Tax Contributions to be made
            on his behalf or make any other contributions to the Plan for a
            period not exceeding twelve (12) months.

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<PAGE>

                                                                  Article VIII -
                                                           Loans to Participants
--------------------------------------------------------------------------------

8.7   Coordination of Outstanding Account and Payment of Benefits

      (a)   If the Borrower has an outstanding Loan Account and is either (i)
            scheduled to receive or elects to receive a lump sum distribution in
            accordance with the provisions of Article VII, or (ii) scheduled to
            receive the last installment payment under a previous election made
            in accordance with the provisions of Article VII to receive payments
            in a form other than the normal form of benefit payments, then, at
            the time of the distribution or payment under clause (i) or (ii)
            above, the entire unpaid principal amount of the loan together with
            any accrued and unpaid interest thereon, shall become immediately
            due and payable. No Plan distribution, except as permitted under
            Section 7.3 or Section 7.4, shall be made to any Borrower unless and
            until such Borrower's Loan Account, including accrued interest
            thereunder, has been liquidated and closed. If a Borrower fails to
            pay the outstanding balance of his Loan Account hereunder, such loan
            shall be satisfied as if a default had occurred pursuant to Section
            8.6.

      (b)   Any reference in the Plan to the Net Value of Units in a Borrower's
            Accounts available for distribution to any Borrower, shall mean the
            value after the satisfaction of the entire unpaid principal loan
            amount and any accrued, unpaid interest thereon, as provided in this
            Article VIII.

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787                                  70              Carver Federal Savings Bank
<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

                                  ARTICLE IX -
                                 ADMINISTRATION

9.1   General Administration of the Plan

      The operation and administration of the Plan shall be subject to the
      management and control of the Named Fiduciaries and Plan Administrator
      designated by the Sponsoring Employer. The designation of such Named
      Fiduciaries and Plan Administrator, the terms of their appointment, and
      their duties and responsibilities allocated among them shall be as set
      forth in this Article IX. Any actions taken hereunder shall be conclusive
      and binding on Participants, Retired Participants, Employees,
      Beneficiaries and other persons, and shall not be overturned unless found
      to be arbitrary and capricious by a court of competent jurisdiction.

9.2   Designation of Named Fiduciaries

      The management and control of the operation and administration of the Plan
      shall be allocated in the following manner:

      (a)   The Sponsoring Employer shall designate the Trustees as a Named
            Fiduciary to perform those functions set forth in the Plan or the
            Agreement which are applicable to a Plan of Partial Participation.

      (b)   The Sponsoring Employer shall designate the Separate Agency to
            perform those functions relating to the Separate Agency in the Plan
            or the Separate Agreement.

      (c)   The Sponsoring Employer shall designate one or more individuals to
            serve as member(s) of an employee benefits Committee to perform
            those functions set forth in the Agreement, Separate Agreement or
            the Plan that are assigned to such Committee.

      (d)   A Trust Participant (as defined under the Agreement) may delegate to
            a person or persons the duties and responsibilities for voting Units
            set forth under the Agreement and Separate Agreement.

      (e)   The Sponsoring Employer shall designate the Separate Agency as a
            Named Fiduciary to perform those functions set forth in the Separate
            Agreement or the Plan that are assigned to the Separate Agency,
            including the voting and tender of shares of the Employer Stock.

9.3   Responsibilities of Fiduciaries

      The Named Fiduciaries and Plan Administrator shall have only those powers,
      duties, responsibilities and obligations that are specifically allocated
      to them under the Plan, the Agreement or the Separate Agreement.

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                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

      To the extent permitted by ERISA, each Named Fiduciary and Plan
      Administrator may rely upon any direction, information or action of
      another Named Fiduciary, Plan Administrator or the Sponsoring Employer as
      being proper under the Plan, the Agreement or the Separate Agreement and
      is not required to inquire into the propriety of any such direction,
      information or action and no Named Fiduciary or Plan Administrator shall
      be responsible for any act or failure to act of another Named Fiduciary,
      Plan Administrator or the Sponsoring Employer.

      No Named Fiduciary, Plan Administrator or the Employer guarantees the
      Trust Fund or Separate Assets in any manner against investment loss or
      depreciation in asset value.

      The allocation of responsibility between the Trustees and the Sponsoring
      Employer or between the Separate Agency and the Sponsoring Employer may be
      changed by written agreement. Such reallocation shall be evidenced by
      Employer Resolutions and shall not be deemed an amendment to the Plan.

      To the extent permitted by ERISA, the Trustees shall have no liability or
      responsibility with respect to the administration of any Separate Assets
      held outside the Trust except as specifically set forth in the Agreement.
      The authority and responsibility of the Trustees extend only to those Plan
      assets held in accordance with the Agreement.

9.4   Plan Administrator

      The Sponsoring Employer shall designate the Trustees as the Trustee
      Administrator to perform those functions applicable to Plans of Partial
      Participation as set forth in the Agreement. The Sponsoring Employer shall
      also designate one or more persons to act as Plan Administrator and to
      perform those functions set forth in the Agreement, the Plan or the
      Separate Agreement that are assigned to the Plan Administrator.

      The duties and responsibilities of a plan administrator under ERISA shall
      be allocated between the Plan Administrator and the Trustee Administrator
      as set forth herein or in the Agreement. Such allocation may be changed
      only by written agreement between the parties and shall not be deemed an
      amendment to the Plan.

      The Plan Administrator shall be solely responsible for monitoring and
      notifying the Trustees of an Employee's age for all purposes under the
      Plan.

      The Plan Administrator is designated as the Plan's agent for the service
      of legal process.

9.5   Committee

      The members of the Committee designated by the Sponsoring Employer under
      Section 9.2(b) shall serve for such term(s) as the Sponsoring Employer
      shall determine and until their successors are designated and qualified.
      The term of any member of the Committee may be renewed from time to time
      without limitation as to the number of renewals. Any member of the
      Committee may (a) resign upon at least sixty (60) days written notice to
      the Sponsoring Employer or (b) be removed from office but only for his
      failure or inability, in the opinion of the Sponsoring

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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

      Employer, to carry out his responsibilities in an effective manner.
      Termination of employment with the Employer shall be deemed to give rise
      to such failure or inability.

      The powers and duties allocated to the Committee shall be vested jointly
      and severally in its members. Notwithstanding specific instructions to the
      contrary, any instrument or document signed on behalf of the Committee by
      any member of the Committee may be accepted and relied upon by the
      Trustees and Separate Agency as the act of the Committee. The Trustees and
      Separate Agency shall not be required to inquire into the propriety of any
      such action taken by the Committee nor shall they be held liable for any
      actions taken by them in reliance thereon.

      The Sponsoring Employer may, pursuant to Employer Resolutions and upon
      notice to the Trustees, change the number of individuals comprising the
      Committee, their terms of office or other conditions of their incumbency
      provided that there shall be at all times at least one individual member
      of the Committee. Any such change shall not be deemed an amendment to the
      Plan.

9.6   Powers and Duties of the Committee

      The Committee shall have authority to perform all acts it may deem
      necessary or appropriate in order to exercise the duties and powers
      imposed or granted by ERISA, the Plan, the Agreement, the Separate
      Agreement or any Employer Resolutions. Such duties and powers shall
      include, but not be limited to, the following:

      (a)   Power to Construe - Except as otherwise provided in the Agreement,
            or the Separate Agreement, the Committee shall have the power to
            construe the provisions of the Plan and to determine any questions
            of fact which may arise thereunder.

      (b)   Power to Make Rules and Regulations - The Committee shall have the
            power to make such reasonable rules and regulations as it may deem
            necessary or appropriate to perform its duties and exercise its
            powers. Such rules and regulations shall include, but not be limited
            to, those governing (i) the manner in which the Committee shall act
            and manage its own affairs, (ii) the procedures to be followed in
            order for Employees or Beneficiaries to claim benefits, and (iii)
            the procedures to be followed by Participants, Beneficiaries or
            other persons entitled to benefits with respect to notifications,
            elections, designations or other actions required by the Plan or
            ERISA. All such rules and regulations shall be applied in a uniform
            and nondiscriminatory manner.

      (c)   Powers and Duties with Respect to Information - The Committee shall
            have the power and responsibility:

            (i)   to obtain such information as shall be necessary for the
                  proper discharge of its duties;

--------------------------------------------------------------------------------
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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

            (ii)  to furnish to the Employer, upon request, such reports as are
                  reasonable and appropriate;

            (iii) to receive, review and retain periodic reports of the
                  financial condition of the Plan Funds; and

            (iv)  to receive, collect and transmit to the Trustees all
                  information required by the Trustees in the administration of
                  the Accounts of the Employee as contemplated in Section 9.7.

      (d)   Power of Delegation - The Committee shall have the power to delegate
            fiduciary responsibilities (other than trustee responsibilities
            defined under Section 405(c)(3) of ERISA) to one or more persons who
            are not members of the Committee. Unless otherwise expressly
            indicated by the Sponsoring Employer, the Committee must reserve the
            right to terminate such delegation upon reasonable notice.

      (e)   Power of Allocation - Subject to the written approval of the
            Sponsoring Employer, the Committee shall have the power to allocate
            among its members specified fiduciary responsibilities (other than
            trustee responsibilities defined under Section 405(c)(3) of ERISA).
            Any such allocation shall be in writing and shall specify the
            persons to whom such allocation is made and the terms and conditions
            thereof.

      (f)   Duty to Report - Any member of the Committee to whom specified
            fiduciary responsibilities have been allocated under subsection (e)
            shall report to the Committee at least annually. The Committee shall
            report to the Sponsoring Employer at least annually regarding the
            performance of its responsibilities as well as the performance of
            any persons to whom any powers and responsibilities have been
            further delegated.

      (g)   Power to Employ Advisors and Retain Services - The Committee may
            employ such legal counsel, enrolled actuaries, accountants, pension
            specialists, clerical help and other persons as it may deem
            necessary or desirable in order to fulfill its responsibilities
            under the Plan.

9.7   Certification of Information

      The Committee shall certify to the Trustees on such periodic or other
      basis as may be agreed upon, but in no event later than ten (10) days
      before any Valuation Date as of which the Trustees must effect any action
      with respect to any Accounts held under the provisions of the Plan,
      relevant facts regarding the establishment of the Accounts of an Employee,
      periodic contributions with respect to such Accounts, investment elections
      and modifications thereof and withdrawals and distributions therefrom. The
      Trustees shall be fully protected in maintaining individual Account
      records and in administering the Accounts of the Employee on the basis of
      such certifications and shall have no duty of inquiry or otherwise with
      respect to any transactions

--------------------------------------------------------------------------------
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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

      or communications between the Committee and Employees relating to the
      information contained in such certifications.

9.8   Authorization of Benefit Payments

      The Committee shall forward to the Trustees and, if applicable, any
      Separate Agency, any application for payment of benefits within a
      reasonable time after it has approved such application. The Trustees and
      Separate Agency may rely on any such information set forth in the approved
      application for the payment of benefits to the Participant, Beneficiary or
      any other person entitled to benefits.

9.9   Payment of Benefits to Legal Custodian

      Whenever, in the Committee's opinion, a person entitled to receive any
      benefit payment is a minor or deemed to be physically, mentally or legally
      incompetent to receive such benefit, the Committee may direct the Trustees
      and Separate Agency to make payment for his benefit to such individual or
      institution having legal custody of such person or to his legal
      representative. Any benefit payment made in accordance with the provisions
      of this Section 9.9 shall operate as a valid and complete discharge of any
      liability for payment of such benefit under the provisions of the Plan.

9.10  Service in More Than One Fiduciary Capacity

      Any person or group of persons may serve in more than one fiduciary
      capacity with respect to the Plan, regardless of whether any such person
      is an officer, employee, agent or other representative of a party in
      interest.

9.11  Payment of Expenses

      The Employer will pay the ordinary administrative expenses of the Plan and
      compensation of the Trustees to the extent required, except that any
      expenses directly related to the Trust Fund, such as transfer taxes,
      brokers' commissions, registration charges, or administrative expenses of
      the Trustees (including expenses of counsel retained by it in accordance
      with the Agreement), shall be paid from the Trust Fund or from such
      Investment Account to which such expenses directly relate.

      The Employer may, if determined by the Committee, charge Employees all or
      part of the reasonable expenses associated with withdrawals and other
      distributions or Account transfers. The Employer will charge Employees
      loan origination fees and all annual maintenance fees associated with
      loans.

      Brokerage commissions incurred in connection with the Employer Stock Fund
      shall be paid by the Employer.

--------------------------------------------------------------------------------
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<PAGE>

                                                                    Article IX -
                                                                  Administration
--------------------------------------------------------------------------------

9.12  Administration of Separate Assets

      The Committee and the Separate Agency shall be solely responsible for the
      administration of the Separate Assets, including the administration,
      collection and enforcement of any loans held therein. All contributions to
      and withdrawals or disbursements from the Separate Assets shall be made
      directly to or by the Separate Agency.

      The Trustees may, as agreed upon with the Committee, provide such combined
      or coordinated Plan records and reports, which include the Separate
      Assets. The Trustees shall be fully protected in relying upon any
      information provided to them by the Committee or Separate Agency with
      respect to such Separate Assets. The inclusion of any information
      pertaining to Separate Assets in such combined or coordinated Plan records
      and reports shall not increase the responsibility or liability of the
      Trustees with respect to the Separate Assets. If Plan Funds may be
      transferred between the Separate Assets and the other Investment Accounts,
      the manner in which such transfers may be made must be agreed to in a
      written instrument entered into among the Committee, the Trustees and the
      Separate Agency.

--------------------------------------------------------------------------------
787                                  76              Carver Federal Savings Bank
<PAGE>

                                                                     Article X -
                                                        Benefit Claims Procedure
--------------------------------------------------------------------------------

                                   ARTICLE X -
                            BENEFIT CLAIMS PROCEDURE

10.1  Definition

      For purposes of this Article X, "Claimant" shall mean any Participant,
      Beneficiary or any other person entitled to benefits under the Plan or his
      duly authorized representative.

10.2  Claims

      A Claimant may file a written claim for a Plan benefit with the Plan
      Administrator on the appropriate form to be supplied by the Plan
      Administrator. The Plan Administrator shall, in its sole and absolute
      discretion, review the Claimant's application for benefits and determine
      the disposition of such claim.

10.3  Disposition of Claim

      The Plan Administrator shall notify the Claimant as to the disposition of
      the claim for benefits under this Plan within ninety (90) days after the
      appropriate form has been filed unless special circumstances require an
      extension of time for processing. If such an extension of time is
      required, the Plan Administrator shall furnish written notice of the
      extension to the Claimant prior to the termination of the initial ninety
      (90) day period. The extension notice shall indicate the special
      circumstances requiring the extension of time and the date the Plan
      Administrator expects to render a decision. In no event shall such
      extension exceed a period of one hundred-eighty (180) days from the
      receipt of the claim.

10.4  Denial of Claim

      If a claim for benefits under this Plan is denied in whole or in part by
      the Plan Administrator, a notice written in a manner calculated to be
      understood by the Claimant shall be provided by the Plan Administrator to
      the Claimant and such notice shall include the following:

      (a)   a statement that the claim for the benefits under this Plan has been
            denied;

      (b)   the specific reasons for the denial of the claim for benefits,
            citing the specific provisions of the Plan which set forth the
            reason or reasons for the denial;

      (c)   a description of any additional material or information necessary
            for the Claimant to perfect the claim for benefits under this Plan
            and an explanation of why such material or information is necessary;
            and

      (d)   appropriate information as to the steps to be taken if the Claimant
            wishes to appeal such decision.

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<PAGE>

                                                                     Article X -
                                                        Benefit Claims Procedure
--------------------------------------------------------------------------------

10.5  Inaction by Plan Administrator

      A claim for benefits shall be deemed to be denied if the Plan
      Administrator shall not take any action on such claim within ninety (90)
      days after receipt of the application for benefits by the Claimant or, if
      later, within the extended processing period established by the Plan
      Administrator by written notice to the Claimant, in accordance with
      Section 10.3.

10.6  Right to Full and Fair Review

      A Claimant who is denied, in whole or in part, a claim for benefits under
      the Plan may file an appeal of such denial. Such appeal must be made in
      writing by the Claimant or his duly authorized representative and must be
      filed with the Committee within sixty (60) days after receipt of the
      notification under Section 10.4 or the date his claim is deemed to be
      denied under Section 10.5. The Claimant or his representative may review
      pertinent documents and submit issues and comments in writing.

10.7  Time of Review

      The Committee, independent of the Plan Administrator, shall conduct a full
      and fair review of the denial of claim for benefits under this Plan to a
      Claimant within sixty (60) days after receipt of the written request for
      review described in Section 10.6; provided, however, that an extension,
      not to exceed sixty (60) days, may apply in special circumstances. Written
      notice shall be furnished to the Claimant prior to the commencement of the
      extension period.

10.8  Final Decision

      The Claimant shall be notified in writing of the final decision of such
      full and fair review by such Committee. Such decision shall be written in
      a manner calculated to be understood by the Claimant, shall state the
      specific reasons for the decision and shall include specific references to
      the pertinent Plan provisions upon which the decision is based. In no
      event shall the decision be furnished to the Claimant later than sixty
      (60) days after the receipt of a request for review, unless special
      circumstances require an extension of time for processing, in which case a
      decision shall be rendered within one hundred-twenty (120) days after
      receipt of such request for review.

--------------------------------------------------------------------------------
787                                  78              Carver Federal Savings Bank
<PAGE>

                                                                    Article XI -
                                          Amendment, Termination, and Withdrawal
--------------------------------------------------------------------------------

                                  ARTICLE XI -
                     AMENDMENT, TERMINATION, AND WITHDRAWAL

11.1  Amendment and Termination

      The Employer expects to continue the Plan indefinitely, but specifically
      reserves the right, in its sole and absolute discretion, at any time, by
      appropriate action of the Board, to terminate its Plan or to amend
      (subject to the approval of the Trustees), in whole or in part, any or all
      of the provisions of the Plan. Subject to the provisions of Section 13.7,
      no such amendment or termination shall permit any part of the Plan Funds
      to be used for or diverted to purposes other than for exclusive benefit of
      Participants, Beneficiaries or other persons entitled to benefits, and no
      such amendment or termination shall reduce the interest of any
      Participant, Beneficiary or other person who may be entitled to benefits,
      without his consent. In the event of a partial termination of the Plan, or
      upon complete discontinuance of contributions under the Plan, the Accounts
      of each affected Participant shall become fully vested and shall be
      distributable in accordance with the provisions of Article VII. In the
      event of a complete termination of the Plan, the Accounts of each affected
      Participant shall become fully vested and shall be distributable as a lump
      sum distribution within seven (7) days of the Valuation Date coincident
      with the date of receipt by the Trustees of the proper documentation
      indicating the Participant's distribution date.

      If any amendment changes the vesting schedule, any Participant who has a
      Period of Service of three (3) or more years may, by filing a written
      request with the Employer, elect to have his vested percentage computed
      under the vesting schedule in effect prior to the amendment.

      The period during which the Participant may elect to have his vested
      percentage computed under the prior vesting schedule shall commence with
      the date the amendment is adopted and shall end on the latest of:

      (a)   sixty (60) days after the amendment is adopted;

      (b)   sixty (60) days after the amendment becomes effective; or

      (c)   sixty (60) days after the Participant is issued written notice of
            the amendment from the Employer.

11.2  Withdrawal from the Trust Fund

      An Employer may withdraw its Plan from the Trust Fund in accordance with
      and subject to the provisions of the Agreement.

--------------------------------------------------------------------------------
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                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
--------------------------------------------------------------------------------

                                  ARTICLE XII -
                            TOP-HEAVY PLAN PROVISIONS

12.1  Introduction

      Any other provisions of the Plan to the contrary notwithstanding, the
      provisions contained in this Article XII shall be effective with respect
      to any Plan Year in which this Plan is a Top-Heavy Plan, as hereinafter
      defined.

12.2  Definitions

      For purposes of this Article XII, the following words and phrases shall
      have the meanings stated herein unless a different meaning is plainly
      required by the context.

      (a)   "Account," for the purpose of determining the Top-Heavy Ratio, means
            the sum of (i) a Participant's Accounts as of the most recent
            Valuation Date and (ii) an adjustment for contributions due as of
            the Determination Date.

      (b)   "Determination Date" means, with respect to any Plan Year, the last
            day of the preceding Plan Year. With respect to the first Plan Year,
            "Determination Date" means the last day of such Plan Year.

      (c)   "Five-Percent Owner" means, if the Employer is a corporation, any
            Employee who owns (or is considered as owning within the meaning of
            Section 318 of the Code modified by Section 416(i)(1)(B)(iii) of the
            Code) more than five percent (5%) of the value of the outstanding
            stock of, or more than five percent (5%) of the total combined
            voting power of all the stock of, the Employer. If the Employer is
            not a corporation, a Five-Percent Owner means any Employee who owns
            more than five percent (5%) of the capital or profits interest in
            the Employer.

      (d)   "Key Employee" means any Employee or former Employee (or, where
            applicable, such person's Beneficiary) in the Plan who, at any time
            during the Plan Year containing the Determination Date or any of the
            preceding four (4) Plan Years, is: (i) an Officer having Top-Heavy
            Earnings from the Employer of greater than fifty percent (50%) of
            the dollar limitation in effect under Section 415(b)(1)(A) of the
            Code; (ii) one of the ten (10) Employees having Top-Heavy Earnings
            from the Employer of more than the dollar limitation in effect under
            Section 415(c)(1)(A) of the Code and owning (or considered as owning
            within the meaning of Section 318 of the Code modified by Section
            416(i)(1)(B)(iii) of the Code) both more than a one-half of one
            percent (1/2%) interest in value and the largest interests in the
            value of the Employer; (iii) a Five-Percent Owner of the Employer;
            or (iv) a One-Percent Owner of the Employer having Top-Heavy
            Earnings from the Employer greater than one hundred fifty thousand
            dollars ($150,000). For purposes of computing the Top-Heavy Earnings
            in subsections (d)(i), (d)(ii) and

--------------------------------------------------------------------------------
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<PAGE>

                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
--------------------------------------------------------------------------------

            (d)(iv), the aggregation rules of Sections 414(b), (c), (m) and (o)
            of the Code shall apply.

      (e)   "Non-Key Employee" means an Employee or former Employee (or, where
            applicable, such person's Beneficiary) who is not a Key Employee.

      (f)   "Officer" means an Employee who is an administrative executive in
            the regular and continued service of his Employer; any Employee who
            has the title but not the authority of an officer shall not be
            considered an Officer for purposes of this Article XII. Similarly,
            an Employee who does not have the title of an officer but has the
            authority of an officer shall be considered an Officer. For purposes
            of this Article XII, the maximum number of Officers that must be
            taken into consideration shall be determined as follows: (i) three
            (3), if the number of Employees is less than thirty (30); (ii) ten
            percent (10%) of the number of Employees, if the number of Employees
            is between thirty (30) and five hundred (500); or (iii) fifty (50),
            if the number of Employees is greater than five hundred (500). In
            determining such limit, the term "Employer" shall be determined in
            accordance with Sections 414(b), (c), (m) and (o) of the Code and
            "Employee" shall include Leased Employees and exclude employees
            described in Section 414(q)(5) of the Code.

      (g)   "One-Percent Owner" means, if the Employer is a corporation, any
            Employee who owns (or is considered as owning within the meaning of
            Section 318 of the Code modified by Section 416(i)(1)(B)(iii) of the
            Code) more than one percent (1%) of the value of the outstanding
            stock of, or more than one percent (1%) of the total combined voting
            power of all the stock of, the Employer. If the Employer is not a
            corporation, a One-Percent Owner means any Employee who owns more
            than one percent (1%) of the capital or profits interest in the
            Employer.

      (h)   A "Permissive Aggregation Group" consists of one or more plans of
            the Employer that are part of a Required Aggregation Group, plus one
            or more plans that are not part of a Required Aggregation Group but
            that satisfy the requirements of Sections 401(a)(4) and 410 of the
            Code when considered together with the Required Aggregation Group.
            If two (2) or more defined benefit plans are included in the
            aggregation group, the same actuarial assumptions must be used with
            respect to all such plans in determining the Present Value of
            Accrued Benefits.

      (i)   "Present Value of Accrued Benefits" shall be determined in
            accordance with the actuarial assumptions set forth in the defined
            benefit plan and the assumed benefit commencement date shall be
            determined taking into account any nonproportional subsidy. The
            accrued benefit of any Employee shall be determined under the method
            used for accrual purposes for all plans of the Employer, or if no
            such method is described, as if such benefit accrued not more
            rapidly than the slowest accrual rate permitted under Section
            411(b)(1)(C) of the Code.

--------------------------------------------------------------------------------
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<PAGE>

                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
--------------------------------------------------------------------------------

      (j)   "Related Rollover Contributions" means rollover contributions
            received by the Plan that are not initiated by the Employee nor made
            from another plan maintained by the Employer.

      (k)   A "Required Aggregation Group" consists of each plan of the Employer
            (whether or not terminated) in which a Key Employee participates or
            participated at any time during the Plan Year containing the
            Determination Date or any of the four (4) preceding Plan Years and
            each other plan of the Employer (whether or not terminated) which
            enables any plan in which a Key Employee participates or
            participated to meet the requirements of Section 401(a)(4) or 410 of
            the Code. If two (2) or more defined benefit plans are included in
            the aggregation group, the same actuarial assumptions must be used
            with respect to all such plans in determining the Present Value of
            Accrued Benefits.

      (l)   A "Super Top-Heavy Plan" means a Plan in which, for any Plan Year:

            (i)   the Top-Heavy Ratio (as defined under subsection (o)) for the
                  Plan exceeds ninety percent (90%) and the Plan is not part of
                  any Required Aggregation Group (as defined under subsection
                  (k)) or Permissive Aggregation Group (as defined under
                  subsection (h)); or

            (ii)  the Plan is a part of a Required Aggregation Group (but is not
                  part of a Permissive Aggregation Group) and the Top-Heavy
                  Ratio for the group of plans exceeds ninety percent (90%); or

            (iii) the Plan is a part of a Required Aggregation Group and part of
                  a Permissive Aggregation Group and the Top-Heavy Ratio for the
                  Permissive Aggregation Group exceeds ninety percent (90%).

      (m)   "Top-Heavy Earnings" means, for any year, compensation as defined
            under Section 414(q)(4) of the Code, up to a maximum of one hundred
            sixty thousand dollars ($160,000) for the 1997, 1998 and 1999 Plan
            Years and one hundred seventy thousand dollars ($170,000) for the
            2000 and 2001 Plan Years, adjusted in multiples of ten thousand
            dollars ($10,000) for increases in the cost-of-living, as prescribed
            by the Secretary of the Treasury under Section 401(a)(17)(B) of the
            Code.

      (n)   A "Top-Heavy Plan" means a Plan in which, for any Plan Year:

            (i)   the Top-Heavy Ratio (as defined under subsection (o)) for the
                  Plan exceeds sixty percent (60%) and the Plan is not part of
                  any Required Aggregation Group (as defined under subsection
                  (k)) or Permissive Aggregation Group (as defined under
                  subsection (h)); or

            (ii)  the Plan is a part of a Required Aggregation Group but is not
                  part of a Permissive Aggregation Group and the Top-Heavy Ratio
                  for the group of plans exceeds sixty percent (60%); or

--------------------------------------------------------------------------------
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<PAGE>

                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
--------------------------------------------------------------------------------

            (iii) the Plan is a part of a Required Aggregation Group and part of
                  a Permissive Aggregation Group and the Top-Heavy Ratio for the
                  Permissive Aggregation Group exceeds sixty percent (60%).

      (o)   "Top-Heavy Ratio" means:

            (i)   if the Employer maintains one or more qualified defined
                  contribution plans and the Employer has not maintained any
                  qualified defined benefit plans which during the five (5) year
                  period ending on the Determination Date have or have had
                  accrued benefits, the Top-Heavy Ratio for the Plan alone or
                  for the Required Aggregation Group or Permissive Aggregation
                  Group, as appropriate, is a fraction, the numerator of which
                  is the sum of the Account balances under the aggregated
                  defined contribution plan or plans for all Key Employees as of
                  the Determination Date, including any part of any Account
                  balance distributed in the five (5) year period ending on the
                  Determination Date but excluding distributions attributable to
                  Related Rollover Contributions, if any, and the denominator of
                  which is the sum of all Account balances under the aggregated
                  qualified defined contribution plan or plans for all
                  Participants as of the Determination Date, including any part
                  of any Account balance distributed in the five (5) year period
                  ending on the Determination Date but excluding distributions
                  attributable to Related Rollover Contributions, if any,
                  determined in accordance with Section 416 of the Code and the
                  regulations thereunder.

            (ii)  if the Employer maintains one or more qualified defined
                  contribution plans and the Employer maintains or has
                  maintained one or more qualified defined benefit plans which
                  during the five (5) year period ending on the Determination
                  Date have or have had any accrued benefits, the Top-Heavy
                  Ratio for any Required Aggregation Group or Permissive
                  Aggregation Group, as appropriate, is a fraction, the
                  numerator of which is the sum of the Account balances under
                  the aggregated qualified defined contribution plan or plans
                  for all Key Employees, determined in accordance with (i)
                  above, and the sum of the Present Value of Accrued Benefits
                  under the aggregated qualified defined benefit plan or plans
                  for all Key Employees as of the Determination Date, and the
                  denominator of which is the sum of the Account balances under
                  the aggregated qualified defined contribution plan or plans
                  determined in accordance with (i) above, for all Participants
                  and the sum of the Present Value of Accrued Benefits under the
                  aggregated qualified defined benefit plan or plans for all
                  Participants as of the Determination Date, all determined in
                  accordance with Section 416 of the Code and the regulations
                  thereunder. The accrued benefits under a qualified defined
                  benefit plan in both the numerator and denominator of the
                  Top-Heavy Ratio are adjusted for any distribution of an
                  accrued benefit made in the five (5) year period ending on the
                  Determination Date.

--------------------------------------------------------------------------------
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<PAGE>

                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
--------------------------------------------------------------------------------

            (iii) For purposes of (i) and (ii) above, the value of Account
                  balances and the Present Value of Accrued Benefits will be
                  determined as of the most recent Valuation Date that falls
                  within the twelve (12) month period ending on the
                  Determination Date, except as provided in Section 416 of the
                  Code and the regulations thereunder for the first and second
                  Plan Years of a qualified defined benefit plan. The Account
                  balances and Present Value of Accrued Benefits of a
                  Participant (A) who is a Non-Key Employee but who was a Key
                  Employee in a prior year, or (B) who has not been credited
                  with at least an Hour of Service with any employer maintaining
                  the Plan at any time during the five (5) year period ending on
                  the Determination Date will be disregarded. The calculation of
                  the Top-Heavy Ratio, and the extent to which distributions,
                  rollovers, and transfers are taken into account will be made
                  in accordance with Section 416 of the Code and the regulations
                  thereunder. When aggregating plans, the value of Account

                  balances and the Present Value of Accrued Benefits will be
                  calculated with reference to the Determination Date that falls
                  within the same calendar year.

      (p)   "Valuation Date", for the purpose of computing the Top-Heavy Ratio
            (as defined under subsection (o)) under subsections (1) and (n)
            means the last date of the Plan Year.

      For purposes of subsections (h), (j) and (k), the rules of Sections
      414(b), (c), (m) and (o) of the Code shall be applied in determining the
      meaning of the term "Employer."

12.3  Minimum Contributions

      If the Plan becomes a Top-Heavy Plan, then any provision of Article III to
      the contrary notwithstanding, the following provisions shall apply:

      (a)   Subject to subsection (b), the Employer shall contribute on behalf
            of each Participant who is employed by the Employer on the last day
            of the Plan Year and who is a Non-Key Employee an amount with
            respect to each Top-Heavy year which, when added to the amount of
            Special Contributions, Nonelective Employer Contributions,
            Discretionary Employer Contributions and Forfeitures made on behalf
            of such Participant, shall not be less than the lesser of: (i) three
            percent (3%) of such Participant's Section 415 Compensation (as
            defined under Section 3.12(a)(vii) of the Plan and modified by
            Section 401(a)(17) of the Code), or (ii) if the Employer has no
            defined benefit plan which is designated to satisfy Section 416 of
            the Code, the largest of the total of each Key Employee's Matching
            Contributions, Before-Tax Contributions, Special Contributions,
            Nonelective Employer Contributions, Discretionary Employer
            Contributions and Forfeitures, as a percentage of the Key Employees'
            Top-Heavy Earnings; provided, however, that in no event shall any
            contributions be made under this Section 12.3 in an amount which
            will cause the percentage of contributions made by the Employer on
            behalf of any Participant who is a Non-Key Employee to exceed the
            percentage at which contributions are made by the Employer on behalf
            of the Key

--------------------------------------------------------------------------------
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<PAGE>

                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
--------------------------------------------------------------------------------

            Employee for whom the percentage of the total of Matching
            Contributions, Before-Tax Contributions, Special Contributions,
            Discretionary Employer Contributions, Nonelective Employer
            Contributions and Forfeitures, is highest in such Top-Heavy year.
            Any such contribution shall be allocated to the Matching
            Contribution Account of each such Participant and, for purposes of
            vesting and withdrawals only, shall be deemed to be a Matching
            Contribution. Any such contribution shall not be deemed to be a
            Matching Contribution for any other purpose.

      (b)   Notwithstanding the foregoing, this Section 12.3 shall not apply to
            any Participant to the extent that such Participant is covered under
            any other plan or plans of the Employer (determined in accordance
            with Sections 414(b), (c), (m) and (o) of the Code) and such other
            plan provides that the minimum allocation or benefit requirement
            will be met by such other plan should this Plan become Top-Heavy. If
            such other plan does not provide for a minimum allocation or benefit
            requirement, a minimum of five percent (5%) of a Participant's
            Section 415 Compensation, as defined in Section 12.3(a) above, shall
            be provided under this Plan.

      (c)   For purposes of this Article XII, the following shall be considered
            as a contribution made by the Employer:

            (i)   Qualified Nonelective Contributions;

            (ii)  Matching Contributions made by the Employer on behalf of Key
                  Employees; and

            (iii) Before-Tax Contributions made by the Employer on behalf of Key
                  Employees;

            (iv)  Discretionary Employer Contributions made by the Employer on
                  behalf of Key Employees and Non-Key Employees; and

            (v)   Nonelective Employer Contributions made by the Employer on
                  behalf of Key Employees and Non-Key Employees.

      (d)   Subject to the provisions of subsection (b), all Non-Key Employee
            Participants who are employed by the Employer on the last day of the
            Plan Year shall receive the defined contribution minimum provided
            under subsection (a). A Non-Key Employee may not fail to accrue a
            defined contribution minimum merely because such Employee was
            excluded from participation or failed to accrue a benefit because
            (i) his Compensation is less than a stated amount, or (ii) he failed
            to make Before-Tax Contributions.

12.4  Impact on Section 415 Maximum Benefits

      For any Plan Year commencing prior to January 1, 2000, in which the Plan
      is a Super Top-Heavy Plan, Sections 3.12(a)(iv) and (v) shall be read by
      substituting the number l.0 for the number 1.25 wherever it appears
      therein.

--------------------------------------------------------------------------------
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<PAGE>

                                                                   Article XII -
                                                       Top-Heavy Plan Provisions
--------------------------------------------------------------------------------

      For any Plan Year in which the Plan is a Top-Heavy Plan but not a Super
      Top-Heavy Plan, the Plan shall be treated as a Super Top-Heavy Plan under
      this Section 12.4, unless each Non-Key Employee who is entitled to a
      minimum contribution or benefit receives an additional minimum
      contribution or benefit. If the Non-Key Employee is entitled to a minimum
      contribution under Section 12.3(a), the Plan shall not be treated as a
      Super Top-Heavy Plan under this Section 12.4 if the minimum contribution
      satisfies Section 12.3(a) when four percent (4%) is substituted for three
      percent (3%) in Section 12.3(a)(i). If the Non-Key Employee is entitled to
      a minimum contribution under Section 12.3(b), the Plan shall not be
      treated as a Super Top-Heavy Plan under this Section 12.4, if the minimum
      contribution satisfies Section 12.3(b) when seven and one-half percent
      (7-1/2%) is substituted for five percent (5%).

12.5  Vesting

      If the Plan becomes a Top-Heavy Plan, then, notwithstanding Section
      4.1(c), the Vested Percentage of a Participant who has at least one (1)
      Hour of Service with the Employer after the Plan becomes Top-Heavy shall
      not be less than the following Vested Percentage of his accrued benefit,
      determined in accordance with the following table:

           Period of Service                              Vested Percentage
           -----------------                              -----------------
           Less than 2 years                                      0%
           2 years but less than 3 years                         20%
           3 years but less than 4 years                         40%
           4 years but less than 5 years                         60%
           5 years but less than 6 years                         80%
           6 years or more                                      100%

      Notwithstanding the foregoing provision, each Participant with at least a
      Period of Service of three (3) years with the Employer shall at all times
      have his vested percentage computed under the greater of the provisions of
      this Section 12.5 or the provisions of Section 4.1(c).

      For those Plan Years in which the Plan ceases to be a Top-Heavy Plan, the
      vesting schedule shall be determined in accordance with the provisions of
      Section 4.1(c), except that the vested percentage of a Participant's
      accrued benefit before the Plan ceased to be a Top-Heavy Plan shall not be
      reduced.

--------------------------------------------------------------------------------
787                                  86              Carver Federal Savings Bank
<PAGE>

                                                                  Article XIII -
                                                        Miscellaneous Provisions
--------------------------------------------------------------------------------

                                 ARTICLE XIII -
                            MISCELLANEOUS PROVISIONS

13.1  No Right to Continued Employment

      Neither the establishment of the Plan, nor any provisions of the Plan or
      of the Agreement establishing the Trust, or of any Separate Agreement nor
      any action of any Named Fiduciary, Plan Administrator or the Employer,
      shall be held or construed to confer upon any Employee any right to a
      continuation of his employment by the Employer. The Employer reserves the
      right to dismiss any Employee or otherwise deal with any Employee to the
      same extent and in the same manner that it would if the Plan had not been
      adopted.

13.2  Merger, Consolidation, or Transfer

      The Plan shall not be merged or consolidated with, nor transfer its assets
      or liabilities to, any other plan unless each Employee, Participant,
      Beneficiary and other person entitled to benefits under the Plan, would
      (if such other plan then terminated) receive a benefit immediately after
      the merger, consolidation or transfer which is equal to or greater than
      the benefit he would have been entitled to receive if the Plan had
      terminated immediately before the merger, consolidation or transfer.

13.3  Nonalienation of Benefits

      Except, effective August 5, 1997, to the extent of any offset of a
      Participant's benefits as a result of any judgment, order, decree or
      settlement agreement provided in Section 401(a)(13)(C) of the Code,
      benefits payable under the Plan shall not be subject in any manner to
      anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
      charge, garnishment, execution, or levy of any kind, either voluntary or
      involuntary and any attempt to so anticipate, alienate, sell, transfer,
      assign, pledge, encumber, charge, garnish, execute, levy or otherwise
      affect any right to benefits payable hereunder, shall be void.
      Notwithstanding the foregoing, the Plan shall permit the payment of
      benefits in accordance with a qualified domestic relations order as
      defined under Section 414(p) of the Code.

13.4  Missing Payee

      Any other provision in the Plan or Agreement to the contrary
      notwithstanding, if the Trustees and, if appropriate, any Separate Agency
      are unable to make payment to any Employee, Participant, Beneficiary or
      other person to whom a payment is due ("Payee") under the Plan because the
      identity or whereabouts of such Payee cannot be ascertained after
      reasonable efforts have been made to identify or locate such person
      (including mailing a certified notice of the payment due to the last known
      address of such Payee as shown on the records of the Employer), such
      payment and all subsequent payments otherwise due to such Payee shall be
      forfeited twenty-four (24) months after the date such payment first became
      due. However, such

--------------------------------------------------------------------------------
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<PAGE>

                                                                  Article XIII -
                                                        Miscellaneous Provisions
--------------------------------------------------------------------------------

      payment and any subsequent payments shall be reinstated retroactively,
      without interest, no later than sixty (60) days after the date on which
      the Payee is identified and located.

13.5  Affiliated Employers

      All employees of all Affiliated Employers shall, for purposes of the
      limitations in Article XII and for measuring Hours of Service and Periods
      of Service, be treated as employed by a single employer. No employee of an
      Affiliated Employer shall become a Participant of this Plan unless
      employed by the Employer or an Affiliated Employer which has adopted the
      Plan.

13.6  Successor Employer

      In the event of the dissolution, merger, consolidation or reorganization
      of the Employer, the successor organization may, upon satisfying the
      provisions of the Agreement and the Plan, adopt and continue this Plan.
      Upon adoption, the successor organization shall be deemed the Employer
      with all its powers, duties and responsibilities and shall assume all Plan
      liabilities.

13.7  Return of Employer Contributions

      Any other provision of the Plan, Separate Agreement or Agreement to the
      contrary notwithstanding, upon the Employer's request and with the consent
      of the Trustees and, if appropriate, any Separate Agency, a contribution
      to the Plan by the Employer which was (a) made by mistake of fact, or (b)
      conditioned upon initial qualification of the Plan with the Internal
      Revenue Service, or (c) conditioned upon the deductibility by the Employer
      of such contributions under Section 404 of the Code, shall be returned to
      the Employer within one (1) year after: (i) the payment of a contribution
      made by mistake of fact, or (ii) the denial of such qualification or (iii)
      the disallowance of the deduction (to the extent disallowed), as the case
      may be.

      Any such return shall not exceed the lesser of (A) the amount of such
      contributions (or, if applicable, the amount of such contribution with
      respect to which a deduction is denied or disallowed) or (B) the amount of
      such contributions net of a proportionate share of losses incurred by the
      Plan during the period commencing on the Valuation Date as of which such
      contributions are made and ending on the Valuation Date as of which such
      contributions are returned. All such refunds shall be limited in amount,
      circumstances and timing to the provisions of Section 403(c) of ERISA.

13.8  Adoption of Plan by Affiliated Employer

      An Affiliated Employer of the Sponsoring Employer may adopt the Plan and
      Agreement upon satisfying the requirements set forth in the Agreement.
      Upon such adoption, such Affiliated Employer shall become a Participating
      Affiliate in the Plan, which Plan shall be deemed a "single plan" within
      the meaning of Income Tax Regulations Section 1.414(1)-1(b)(1).

--------------------------------------------------------------------------------
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<PAGE>

                                                                  Article XIII -
                                                        Miscellaneous Provisions
--------------------------------------------------------------------------------

      For purposes of Article IX, Employer shall mean only the Sponsoring
      Employer and each Participating Affiliate shall be deemed to accept and
      designate the Named Fiduciaries, Committee, Plan Administrator, Trustee
      Administrator and voter of Units designated by the Sponsoring Employer to
      act on its behalf in accordance with the provisions of the Plan and
      Agreement.

      The Sponsoring Employer shall solely exercise for and on behalf of such
      Participating Affiliate the powers reserved to the Employer under Articles
      IX and XI. However, such Participating Affiliate may at anytime terminate
      its future participation in the Plan for the purposes and in the manner
      set forth in the Agreement.

13.9  Construction of Language

      Wherever appropriate in the Plan, words used in the singular may be read
      in the plural; words used in the plural may be read in the singular; and
      words importing the masculine gender shall be deemed equally to refer to
      the female gender. Any reference to a section number shall refer to a
      section of this Plan, unless otherwise indicated.

13.10 Headings

      The headings of articles and sections are included solely for convenience
      of reference, and if there be any conflict between such headings and the
      text of the Plan, the text shall control.

13.11 Governing Law

      The Plan shall be governed by and construed and enforced in accordance
      with the laws of the State of New York, except to the extent that such
      laws are preempted by the Federal laws of the United States of America.

--------------------------------------------------------------------------------
787                                  89              Carver Federal Savings BankExhibit 10.4

                              CARVER BANCORP, INC.

                          EMPLOYEE STOCK OWNERSHIP PLAN

<PAGE>

                              CARVER BANCORP, INC.

                          EMPLOYEE STOCK OWNERSHIP PLAN

                          Incorporating Amendment No. 1
                         Incorporating Second Amendment
                          Incorporating Amendment No. 2
                         Incorporating Amendment No. 2A
                          Incorporating Amendment No. 3
                          Incorporating Amendment No. 4

<PAGE>

                           CARVER FEDERAL SAVINGS BANK

                          EMPLOYEE STOCK OWNERSHIP PLAN

                                TABLE OF CONTENTS

Exhibit A   Carver Bancorp, Inc. Employee Stock Ownership Plan

Exhibit B   Amendments to the Carver Bancorp, Inc. Employee Stock Ownership Plan

Exhibit C   Trust Agreement between Carver Bancorp, Inc. and Marine Midland Bank
            for the Carver Bancorp, Inc. Employee Stock Ownership Plan dated
            June 1, 1997.

<PAGE>

                              CARVER BANCORP, INC.

                          EMPLOYEE STOCK OWNERSHIP PLAN

                                   ----------

                  UNDER SECTIONS 401 (a) AND 4975(e)(7) OF THE
                    INTERNAL REVENUE CODE OF 1986, AS AMENDED

                         EFFECTIVE DATE: JANUARY 1, 1994

<PAGE>

                                     Part I
                                Table of Contents

Section                                                                     Page
-------                                                                     ----

Definitions ...............................................................    1

Eligibility ...............................................................   10

Employer Contributions ....................................................   12

Participants Contributions ................................................   14

Allocation of Contributions ...............................................   14

Allocation to Participant's Accounts ......................................   19

Retirement and Distribution of Benefits ...................................   22

In Event of Disability ....................................................   26

In the Event of Death .....................................................   27

In the Event of Termination of Employment or Change in Status .............   28

Top-Heavy Definitions and Rules ...........................................   31

Administration of the Plan ................................................   38

Management and Investment of Trust Assets .................................   40

Obligations of the Employer ...............................................   43

Miscellaneous .............................................................   43

Amendments ................................................................   45

Suspension, Discontinuance and Plan Termination ...........................   46

Inclusion of Other Companies ..............................................   47

<PAGE>

                                    SECTION 1

                                   Definitions

The following words and phrases used herein have the following meanings, unless
a different meaning is plainly required by the context:

         The masculine pronoun wherever used shall include the feminine pronoun
and the singular shall include the plural.

1.1      "Account" means the record of the Participant's interest in the Trust
         Fund, maintained by the Committee pursuant to Section 5.

1.2      "Acquisition Loan" means an Exempt Loan (or other extension of credit)
         used by the Trust to finance the acquisition of Qualifying Employer
         Securities which loan may constitute an extension of credit to the
         Trust from a party in interest.

1.3      "Adjustment Factor" means the cost of living adjustment factor
         prescribed by the Secretary of the Treasury under Section 415(d) of the
         Code for years beginning after December 31, 1988, as applied to such
         items and in such manner as the Secretary shall provide.

1.4      "Affiliate" means any employer aggregated with the Employer under
         Section 414(b), (c), (m), or (o) of the Code.

1.5      "Anniversary Date" means the last day of the Plan Year.

1.6      "Board of Directors" means the Board of Directors of the Company.

1.7      "Cash Compensation" means the sum of (i) an Employee's wages which are
         subject to federal income tax withholding pursuant to Section 3401(a)
         of the Code, and (ii) any amounts withheld from the Employee under a
         plan qualified under Section 125 or 401(k) of the Code and sponsored by
         the Employer within a Plan Year. In no event, however, shall an
         Employee's Cash Compensation (a) for any Plan Year beginning after
         December 31, 1993 and before January 1, 2002 include any compensation
         in excess of $150,000 (or such other amount as may be permitted under
         section 401(a)(17) of the Code); and (b) for any Plan Year beginning
         after December 31, 2001 include any compensation in excess of $200,000
         (or such other amount as may be permitted under section 401(a)(17) of
         the Code). If there are less than twelve (12) months in the Plan Year,
         the compensation limitation (as adjusted) shall be prorated by
         multiplying such limitation by a fraction, the numerator of which is
         the number of months in the Plan Year and the denominator of which is
         twelve (12). For purposes of applying the foregoing limitation in any
         Plan Year beginning prior to January 1, 1997 to any person who is a
         Five Percent Owner or who is one of the 10 Highly Compensated Employees
         with the highest Total Compensation (determined prior to the
         application of this sentence), any Cash Compensation paid to the spouse
         of such person or to any lineal descendant of such person who has not
         attained age 19 on or before the last day of such calendar year shall
         be deemed to have been paid to such person. If, as a result of the
         application of such family

<PAGE>

         aggregation rules the adjusted compensation limitation is exceeded,
         then the limitation shall be prorated among the affected individuals in
         proportion to each such individual's compensation as determined under
         this Section prior to the application of this limitation.

1.8      "Code" means the Internal Revenue Code of 1986, as amended, together
         with regulations promulgated pursuant thereto.

1.9      "Committee" or "Administrative Committee" means the committee appointed
         to manage and administer the Plan as provided in Section 12.

1.10     "Company" means Carver Bancorp, Inc., its successors and assigns.

1.11     "Designated Beneficiary" means a natural person designated by a
         Participant or Former Participant as a Beneficiary and shall not
         include any Beneficiary designated by a person other than a Participant
         or Former Participant or any Beneficiary other than a natural person.
         If a natural person is the beneficiary of a trust which a Participant
         or Former Participant has named as his Beneficiary, such natural person
         shall be treated as a Designated Beneficiary if: (a) the trust is a
         valid trust under applicable state law (or would be a valid trust
         except for the fact that it does not have a corpus); (b) the trust is
         irrevocable or will, by its terms, become irrevocable upon the death of
         the Participant or Former Participant; (c) the beneficiaries of the
         trust who are beneficiaries with respect to the trust's interest as a
         Beneficiary are identifiable from the terms of the trust instrument;
         and (d) the following information is furnished to the Committee:

                 (i)    by the Participant or Former Participant, if any
                        distributions are required to be made pursuant to
                        Section 7.6 prior to the death of the Participant or
                        Former Participant, either: (A) a copy of the trust
                        instrument, together with a written undertaking by the
                        Participant or Former Participant to furnish to the
                        Committee a copy of any subsequent amendment within a
                        reasonable time after such amendment is made; or (B)(I)
                        a list of all of the beneficiaries of the trust
                        (including contingent and remainderman beneficiaries
                        with a description of the conditions on their
                        entitlement); (II) a certification of the Participant or
                        Former Participant to the effect that, to the best of
                        his knowledge, such list is correct and complete and
                        that the conditions of Section 1.11(a), (b) and (c) are
                        satisfied; (III) a written undertaking to provide a new
                        certification to the extent that an amendment changes
                        any information previously certified; and (IV) a written
                        undertaking to furnish a copy of the trust instrument to
                        the Committee on demand; and

                 (ii)   by the trustee of the trust within nine months after the
                        death of the Participant or Former Participant, if any
                        distributions are required to be made pursuant to
                        Section 7.6 after the death of the Participant or Former
                        Participant, either: (A) a copy of the actual trust
                        instrument for the trust; or (B)(1) a final list of all
                        of the beneficiaries of the trust (including contingent
                        and remainderman beneficiaries with a description of the
                        conditions on their entitlement) as of the date of
                        death; (II) a certification of the trustee to the effect
                        that, to the best

                                       2
<PAGE>

                        of his knowledge, such list is correct and complete and
                        that the conditions of Section 1.11(a), (b) and (c) are
                        satisfied; and (III) a written undertaking to furnish a
                        copy of the trust instrument to the Committee on demand.

1.12     "Domestic Relations Order" means a judgment, decree or order (including
         the approval of a property settlement) that is made pursuant to a state
         domestic relations or community property law and relates to the
         provision of child support, alimony payments, or marital property
         rights to a spouse, child or other dependent of a Participant or Former
         Participant.

1.13     "Effective Date" of the Plan means January 1, 1994, subject to the
         condition subsequent that it be approved and qualified under the
         Internal Revenue Code.

1.14     "Employee" shall mean any person who (a) is in the employment of the
         Employer, and (b) whose wages from the Employer are subject to
         withholding for the purposes of Federal Income Taxes and the Federal
         Insurance Contribution Act. "Employee" shall not include any person who
         is paid by an Employer as an independent contractor.

1.15     "Employer" means the Company, Carver Federal Savings Bank, and any
         other company which, with the Company's consent, adopts the Plan and
         joins in the Trust Agreement.

1.16     "Entry Date" means the Effective Date and the first day of the first
         and seventh months of the Plan Year. Additionally, the Committee may,
         on a uniform and nondiscriminatory basis, at any time and from time to
         time authorize a special entry date for eligible participants, but
         prior to the next regularly scheduled Entry Date.

1.17     "ESOP" means an Employee Stock Ownership Plan as defined in Section
         4975(e)(7) of the Code.

1.18     "Exempt Loan" means a loan made to the Plan which satisfies the
         requirements of Section 2550.408b-3 of the Department of Labor
         Regulations, Section 54.4975-7(b) of the Treasury Regulations, and the
         Trust Agreement.

1.19     "Financed Shares" means shares of Qualifying Employer Securities
         acquired by the Trust with the proceeds of an Acquisition Loan, whether
         or not pledged as collateral to secure the repayment of such
         Acquisition Loan.

1.20     "Five Percent Owner" means, for any Plan Year, a person who, during
         such Plan Year, owned (or was considered as owning for purposes of
         section 318 of the Code): (a) more than 5% of the value of all classes
         of outstanding stock of any Affiliate; or (b) stock possessing more
         than 5% of the combined voting power of all classes of outstanding
         stock of any Affiliate.

1.21     "Forfeiture" shall mean that portion of a Participant's Account that is
         not vested, and occurs on the earlier of (1) the last day of the Plan
         Year in which the Participant terminates employment, provided the
         Participant is not reemployed prior thereto, or (2) the last day of the
         Plan Year in which the Participant incurs his fifth consecutive Break
         in Service.

                                       3
<PAGE>

1.22     "Former Participant" means a Participant whose participation in the
         Plan has terminated due to termination of employment, death, Disability
         or retirement after attaining the Normal Retirement Age.

1.23     "Highly Compensated Employee" means, for any Plan Year, an Employee

         (a)     for Plan Years beginning before January 1, 1997, any Employee
                 or person employed by an Affiliate who:

                 (i)    at any time during such Plan Year or the immediately
                        preceding Plan Year was a Five Percent Owner; or

                 (ii)   is a member of the group consisting of the 100 Employees
                        and persons employed by any Affiliate who received the
                        greatest Total Compensation for such Plan Year and
                        during such Plan Year:

                        (A)     received Total Compensation for such Plan Year
                                in excess of $75,000 (or such higher amount as
                                may be permitted under section 414(q) of the
                                Code); or

                        (B)     received Total Compensation for such Plan Year
                                that was in excess of both (I) $50,000 (or such
                                higher amount as may be permitted under section
                                414(q) of the Code) and (II) the Total
                                Compensation for such Plan Year of at least 80%
                                of the Employees and persons employed by any
                                Affiliate for such Plan Year; or

                        (C)     was an Officer of the Employer or any Affiliate
                                and received Total Compensation for such Plan
                                Year in excess of 50% of the amount in effect
                                under section 415(b)(1)(A) of the Code for such
                                Plan Year; or

                 (iii)  during the immediately preceding Plan Year:

                        (A)     received Total Compensation for such Plan Year
                                in excess of $75,000 (or such higher amount as
                                may be permitted under section 414(q) of the
                                Code); or

                        (B)     received Total Compensation for such Plan Year
                                that was in excess of both (I) $50,000 (or such
                                higher amount as may be permitted under section
                                414(q) of the Code) and (II) the Total
                                Compensation for such Plan Year of at least 80%
                                of the Employees and persons employed by an
                                Affiliate for such Plan Year; or

                        (C)     was an Officer of the Employer or any Affiliate
                                and received Total Compensation for such Plan
                                Year in excess of 50% of the amount in effect
                                under section 415(b)(1)(A) of the Code for such
                                Plan Year; or

                                       4
<PAGE>

         (b)     for Plan Years beginning after December 31, 1996, any Employee
                 or person employed by an Affiliate who:

                 (i)    was a Five Percent Owner at any time during such Plan
                        Year or the immediately preceding Plan Year; or

                 (ii)   received Total Compensation during the immediately
                        preceding Plan Year (A) in excess of $80,000 (or such
                        other amount as may be prescribed by the Secretary of
                        the Treasury pursuant to section 401(a)(17) of the
                        Code); and (B) if elected by the Committee in such form
                        and manner as the Secretary of the Treasury may
                        prescribe, is a member of the group consisting of the
                        top 20% of Employees when ranked on the basis of Total
                        Compensation paid to Employees during such year.

                 The Company has not elected to use the top 20% election
                 mentioned in subparagraph (b) of this section. The
                 determination of who is a Highly Compensated Employee will be
                 made in accordance with section 414(q) of the Code and the
                 regulations thereunder.

1.24     "Late Retirement Date" means the Anniversary Date coinciding with or
         next following a Participant's actual Retirement Date after having
         reached his Normal Retirement Date.

1.25     (a) Subject to Section 1.25(b), a Leased Employee shall be treated as
         an Employee for purposes of the Plan. For purposes of this Section
         1.25, the term "Leased Employee" means any person (i) who would not,
         but for the application of this Section 1.25, be an Employee and (ii)
         who pursuant to an agreement between an Affiliate and any other person
         ("leasing organization") has performed for the Affiliate (or for the
         Affiliate and related persons determined in accordance with section
         414(n)(6) of the Code), on a substantially full-time basis for a period
         of at least one year, services of a type historically performed by
         employees in the business field of the Employer under the primary
         direction or control of an Affiliate.

         (b)     For purposes of the Plan:

                 (i)    contributions or benefits provided to the leased
                        employee by the leasing organization which are
                        attributable to services performed for the Employer
                        shall be treated as provided by the Employer; and

                 (ii)   Section 1.25(a) shall not apply to a Leased Employee if:

                        (A)     the number of Leased Employees performing
                                services for the Employer does not exceed 20% of
                                the number of the Employer's Employees who are
                                not Highly Compensated Employees; and

                        (B)     such Leased Employee is covered by a money
                                purchase pension plan providing (I) a
                                nonintegrated contribution rate of at least 10%
                                of the

                                       5
<PAGE>

                                Leased Employee's compensation; (II) immediate
                                participation; (III) full and immediate vesting;
                                and (IV) coverage for all of the employees of
                                the leasing organization (other than employees
                                who perform substantially all of their services
                                for the leasing organization).

1.26     "Limitation Year" means the Plan Year.

1.27     "Loan Suspense Account" means an account in which Qualifying Employer
         Securities are held and which has not been allocated to Participant's
         Accounts because they were purchased with borrowed funds pursuant to
         the provisions of Section 13.4 hereof or transferred to such account
         pursuant to the terms hereof.

1.28     "Military Service" means service in the armed forces of the United
         States, including but not limited to, Qualified Military Service. It
         may also include, if and to the extent that the Board so provides and
         if all Participants and Former Participants in like circumstances are
         similarly treated, special service for the government of the United
         States and other public service.

1.29     "Non Highly Compensated Employee" means an Employee who is not a Highly
         Compensated Employee.

1.30     "Non-Key Employee" means an Employee who is not a Key Employee. Non-Key
         Employees shall include Employees who are former Key Employees.

1.31     "Normal Retirement Age" means the date a Plan Participant, if still an
         Employee, attains age 65.

1.32     "Normal Retirement Date" means the last day of the month coincident
         with, or next following, the date upon which a Participant attains his
         Normal Retirement Age.

1.33     "Officer" means an Employee who is an administrative executive in
         regular and continued service with any Affiliate; provided, however,
         that at no time shall more than the lesser of (a) 50 Employees or (b)
         the greater of (i) 3 Employees or (ii) 10% of all Employees be treated
         as Officers. The determination of whether an Employee is to be
         considered an Officer shall be made in accordance with section 416(1)
         of the Code.

1.34     "Other Investments Account" means the Account of a Participant which
         reflects his interest in the Plan attributable to Trust assets other
         than Qualifying Employer Securities.

1.35     "Participant" means an Employee who is included in the Plan as provided
         in Section 2.1.

1.36     "Participant's Account" means a separate account, maintained in the
         aggregate by the Committee, for each Participant with respect to his
         total interest in the Plan and Trust.

1.37     "Participant's Company Stock Account" means the Participant's Account
         credited with Qualifying Employer Securities.

                                       6
<PAGE>

1.38     "Plan" means the Carver Bancorp, Inc. Employee Stock Ownership Plan as
         set forth herein.

1.39     "Plan Year" means the 12 month period ending on December 31 of each
         year. The initial Plan Year shall begin on the Effective Date and end
         on December 31.

1.40     "Pregnancy or Child Care Leave of Absence" shall mean, with respect to
         a Plan Year commencing on or after July 1, 1984, a compensated or
         uncompensated leave of absence of fixed or indefinite duration granted
         to an Employee by the Employer or an Affiliate pursuant to a written
         request which is submitted to the Employer or Affiliate by the Employee
         no later than thirty (30) days prior to the first day of the proposed
         leave of absence that is sought (i) because of the pregnancy of the
         Employee, (ii) because of the birth of a child of the Employee, (iii)
         because of the placement of a child with the Employee in connection
         with the adoption of such child by such Employee or for the purpose of
         enabling the Employee to care for a child for a period beginning
         immediately after the birth of such child to the Employee, or (iv)
         because of the placement of such child with the Employee, or (v)
         because of an absence of not more than two (2) consecutive calendar
         years in duration which, upon his return to the employ of an Employer
         or an Affiliate, the Employee demonstrates to the satisfaction of the
         Employer to have been for one of the four aforementioned purposes.

1.41     "Qualified Domestic Relations Order" means a Domestic Relations Order
         that: clearly specifies (i) the name and last known mailing address of
         the Participant or Former Participant and of each person given rights
         under such Domestic Relations Order, (ii) the amount or percentages of
         the Participant's or Former Participant's benefits under this Plan to
         be paid to each person covered by such Domestic Relations Order, (iii)
         the number of payments or the period to which such Domestic Relations
         Order applies, and (iv) the name of this Plan; and (b) does not require
         the payment of a benefit in a form or amount that is not otherwise
         provided for under the Plan, or (ii) inconsistent with a previous
         Qualified Domestic Relations Order.

1.42     "Qualified Election Period" means the six Plan Year period beginning
         with the Plan Year after the Plan Year in which the Participant first
         becomes a Qualified Participant.

1.43     "Qualified Military Service" means with respect to any person on any
         date, any service in the uniformed services of the United States (as
         defined in chapter 43 of Title 38 of the United States Code) completed
         prior to such date, but only if, on such date, such person is entitled
         to re-employment rights with respect to an Affiliate on account of such
         service.

1.44     "Qualified Participant" means a Participant who has attained age 55 and
         who has completed at least 10 years of participation in the Plan.

1.45     "Qualifying Employer Securities" or "Company Stock" means the shares of
         common stock of the Company as described in Section 4975(e)(8) of the
         Code (or of a corporation which is a member of a controlled group with
         the Company) which is readily tradeable on an established securities
         market; or if not readily tradeable, meets the following criteria:

                                       7
<PAGE>

         (a)     is a common stock issued by the Company (or by a corporation
                 which is a member of the same controlled group) having a
                 combination of voting power and dividend rights equal to or in
                 excess of that class of common stock having the greatest voting
                 power, and

         (b)     that class of common stock having the greatest dividend rights.

         Noncallable preferred stock shall be deemed to be "Qualifying Employer
         Securities" if such stock is convertible at any time into stock which
         constitutes "Qualifying Employer Securities" hereunder and if such
         conversion is at a conversion price which (as of the date of the
         acquisition by the Trust) is reasonable.

1.46     "Retroactive Contribution" means a contribution made on a retroactive
         basis in respect of a period of Qualified Military Service in
         accordance with Section 6.2.

1.47     "Service" means any computation period during which an Employee was in
         the employment of the Employer or an Affiliate including service before
         the Effective Date of this Plan. It shall include any period during
         which an Employee is on leave of absence authorized by his Employer.
         All leaves of absence shall be granted in a uniform and
         non-discriminatory manner to all Employees in similar circumstances.

         (a)     Any Participant who leaves the active Service of the Employer
                 or an Affiliate Company to enter the Armed Forces of the United
                 States of America during a period of national emergency or
                 compulsory military Service law of the United States of America
                 shall be deemed to be on leave of absence during the period of
                 his Service in such Armed Forces and during any period after
                 his discharge from such Armed Forces in which his re-employment
                 rights are guaranteed by law.

         (b)     "Year of Service" shall mean any computation period during
                 which an Employee completes one thousand (1,000) or more Hours
                 of Service. A Year of Service for purposes of determining an
                 Employee's eligibility to participate in the Plan shall be
                 defined as a twelve consecutive month period during which the
                 Employee remains in the Service of the Employer (regardless of
                 his Hours of Service). The initial eligibility computation
                 period is the twelve-consecutive month period beginning on the
                 date the Employee first performs an Hour of Service for the
                 Employer. Succeeding eligibility computation periods shall
                 commence with the first Plan Year which commences prior to the
                 first anniversary of the Employee's initial eligibility
                 computation period regardless of whether the Employee remains
                 in the Service of the Employer during his initial eligibility
                 computation period. For vesting purposes, a Year of Service
                 shall be any Plan Year, or calendar year prior to the Effective
                 Date, in which an Employee completes 1,000 Hours of Service
                 after attainment of age 18; provided that no more than five
                 Years of Service shall be credited for employment before the
                 Effective Date.

         (c)     "Hour of Service" means each hour for which an Employee is
                 directly or indirectly paid or entitled to payment by the
                 Employer or an Affiliate for the performance of duties.

                                       8
<PAGE>

                 These hours shall be credited to the Employee for the
                 computation period or periods in which the duties are
                 performed.

                 Hours of service to be credited for each hour for which an
                 Employee is paid, or entitled to payment, by the Employer or an
                 Affiliate on account of a period of time during which no duties
                 are performed, irrespective of whether the employment
                 relationship has terminated due to vacation, holiday, illness,
                 incapacity (including disability), layoff, jury duty, military
                 duty, or leave of absence. No more than 501 Hours of Service
                 shall be credited under this paragraph for any single
                 continuous period (whether or not such period occurs in a
                 single computation period).

                 Hours of service to be credited for each hour for which back
                 pay, irrespective of mitigation of damage, has been either
                 awarded or agreed to by the Employer. These hours shall be
                 credited to the Employee for the computation period or periods
                 to which the award or agreement pertains rather than the
                 computation period in which the award, agreement, or payment
                 was made.

                 For purposes of crediting Hours of Service for periods during
                 which no duties were performed, the method of determining the
                 number of hours to be credited and the method of crediting such
                 hours to computation periods shall conform to the requirements
                 set forth in Sections 2530.200(b) 2(b) and (c) of the
                 Department of Labor Regulations.

                 Solely for purposes of determining whether a Break in Service
                 for participation and vesting purposes has occurred in a
                 computation period, an individual who is absent from work for
                 maternity or paternity reasons shall receive credit for the
                 hours of Service which would otherwise have been credited to
                 such individual, but for such absence, or in any case in which
                 such hours cannot be determined, 8 hours of Service per day of
                 such absence. For purposes of this paragraph, an absence from
                 work for maternity or paternity reasons means an absence (1) by
                 reason of the pregnancy of the individual, (2) by reason of a
                 birth of a child of the individual, (3) by reason of the
                 placement of a child with the individual in connection with the
                 adoption of such child by such individual, or (4) for purposes
                 of caring for such child for a period beginning immediately
                 following such birth or placement. The hours of Service
                 credited under this paragraph shall be credited (1) in the
                 computation period in which the absence begins if the crediting
                 is necessary to prevent a break in Service in that period, or
                 (2) in all other cases, in the following computation period.

         (d)     "Benefit Accrual Computation Period" means defined as the Plan
                 Year.

         (e)     "Vesting Computation Period" means the Plan Year.

         (f)     "Break in Service" means any computation period in which an
                 Employee works five hundred (500) Hours of Service or less.
                 Except as otherwise provided above, any year in which an
                 Employee works more than five hundred (500) Hours of Service,
                 but less

                                       9
<PAGE>

                 than one thousand (1,000) Hours of Service shall not be
                 recognized as Service, but this shall not be a Break in
                 Service.

         (g)     In the event that an Employee who incurred a Break in Service
                 is subsequently re-employed, his Years of Service shall be
                 cumulative for vesting purposes, except that if the Employee,
                 at the time of his Break in Service, had no vested interest and
                 the number of consecutive one-year Breaks in Service equals or
                 exceeds the greater of five or the number of pre-break Years of
                 Service, Years of Service prior to such Breaks in Service shall
                 be disregarded. The same provision shall apply in the case of
                 an Employee whose Service has been broken because he worked
                 less than five-hundred (500) Hours of Service in a given Plan
                 Year when he resumes working at least one thousand (1,000)
                 Hours of Service per Plan Year.

1.48     "Spouse" shall mean the lawful husband or wife of a Participant on the
         date specified.

1.49     "Taxable Year" means, with respect to each Employer, the fiscal year
         adopted by such company from time to time for Federal income tax
         purposes.

1.50     "Total Disability" or "Disability" means a physical or mental condition
         of a Participant resulting from bodily injury, disease, or mental
         disorder which renders him incapable of continuing any gainful
         occupation and which condition constitutes total disability under the
         Federal Social Security Acts.

1.51     "Trust Agreement" means the trust agreement set forth in Part II of
         this Plan.

1.52     "Trust Fund" means the fund described in Section 13, and maintained in
         accordance with the terms of the Trust Agreement.

1.53     "Trustee(s)" means the person(s), or corporation(s), accepting the
         appointment of Trustee(s) and acting as such, including any successor
         Trustee(s), pursuant to the Trust Agreement.

1.54     "Valuation Date" means the last day of the Plan Year of the Trust Fund.
         The fair market value of the assets in the Trust Fund as of any
         valuation date shall be determined as the close of business on such
         date, or, if such date is not a business day, as of the close of
         business on the next preceding business day. On the Valuation Date the
         Account balances are valued to determine if the plan is top-heavy. The
         Valuation Date shall also be the Determination Date for Top-Heavy Plan
         calculations.

                                    SECTION 2

                                   Eligibility

2.1      Participation. Subject to Section 2.6, each Employee shall become a
         Participant, if still an Employee, on the Entry Date next following the
         later of (i) his attainment of age 21, and (ii) his completion of one
         (1) Year of Service for eligibility purposes; provided that anyone who

                                       10
<PAGE>

         is an Employee on the date of the conversion of Carver Federal Savings
         Bank from a mutual to a stock form of ownership shall become a
         Participant as of the Effective Date.

         An Employee who terminates employment prior to meeting the service
         requirement set forth in Section 2.1 shall be treated as a new Employee
         on the date of his rehire, but only if a Break in Service has occurred
         prior to such date of rehire. An Employee meeting the above-stated
         service requirement, but who terminates employment prior to becoming a
         Participant, shall become a Participant as of the date of rehire, if a
         Break in Service has not occurred prior to such rehire. A rehired
         Employee who was a former Participant, shall become a Participant upon
         his date of rehire.

2.2      Annual Allocations. A Participant shall be entitled to share in any
         allocation of the Employer's contribution for a particular Plan Year if
         and only if: (i) the Participant completes 1000 or more Hours of
         Service during the Plan Year and remains an Employee as of the last day
         of such Plan Year; or (ii) the Participant ceases to be an Employee
         during the Plan Year because of his Normal Retirement Age, death or
         Disability.

2.3      Annual Employer Report to Committee. Within sixty (60) days after the
         last day of the Fiscal Year, the Employer shall certify to the
         Committee in writing such information from its records with respect to
         Employees as the Committee may require in order to determine the
         identity and interests of the Participants and otherwise to perform its
         duties hereunder.

         Any certification by the Employer of information to the Committee
         pursuant to this Plan shall, for all purposes of this Plan, be binding
         on all parties in interest, provided that whenever any Employee proves
         to the satisfaction of the Employer that his period of Service or his
         Cash Compensation as so certified is incorrect, the Employer shall
         correct such certification. The Service of any Employee shall be
         determined solely by reference to the data certified to the Committee
         by the Employer.

         The determination of the Committee as to the identity of the respective
         Participants and as to their respective interests shall be binding upon
         the Employer, the Trustees, the Employees, the Participants and all
         beneficiaries.

2.4      Transfers. Whenever any Participant is transferred from one Employer
         who is a party to the Plan to another Employer who is a party to the
         Plan, the Participant may continue on as a Participant in the Plan
         without any interruption as if the Participant had at all times been an
         Employee of the new Employer; and in the event an affiliated company
         ceases to be an Affiliate for any reason whatsoever, this event shall
         not affect the continued participation in this Plan of any Participant
         who becomes an Employee of the Employer or any other Affiliate under
         this Plan, and the Committee shall transfer the Participant's Account
         from the account of the withdrawing Affiliate to the Employer or new
         Affiliate.

2.5      Breaks-in-Service. A Participant who terminates employment with an
         Employer or suffers a Break-in-Service shall cease to be an active
         Participant in this Plan and his Participant's Account shall be placed
         on inactive status. Except as provided in Section 2.2, the inactive
         Participant shall not share in the Employer's contribution for that
         Plan year, but his accounts

                                       11
<PAGE>

         shall continue to receive income allocations. Thus, he shall remain a
         Participant until his account balances have been distributed to him.
         Termination of employment may have resulted from voluntary or
         involuntary termination of employment, unauthorized absence, or by
         failure to return to active employment with the Employer by the date on
         which an Authorized Leave of Absence expired.

2.6      Military Service. In the case of a termination of service of any
         Employee to enter directly into Military Service, the entire period of
         his absence shall be treated, for purposes of vesting and eligibility
         for Participation (but not, except as required by law, for purposes of
         eligibility to share in allocations of contributions in accordance with
         Sections 5 and 6), as if he had continued employment during the period
         of his absence. In the event of the re-employment of such person by any
         Affiliate within a period of not more than six months:

         (a)     after he becomes entitled to release or discharge, if he has
                 entered into the uniformed services of the United States;

         (b)     release from hospitalization continuing after discharge from
                 the uniformed services of the United States for a period of not
                 more than two years; or

         (c)     after such service terminates, if he has entered into other
                 service defined as Military Service;

         such period, also, shall be deemed to be Military Service.

2.7      Excluded Employees. An Employee shall not participate in the Plan if he
         is either (i) a Leased Employee, (ii) classified as an "independent
         contractor" by the Employer, even if considered an employee under
         applicable law or (iii) is included in a unit of Employees covered by
         an agreement which the Secretary of Labor finds to be a collective
         bargaining agreement between Employee representatives and the Employer
         or one or more Affiliates, including the Company, if there is evidence
         that retirement benefits were the subject of good faith bargaining
         between such Employee representatives and the Employer or such
         Affiliates. For this purpose, "Employee Representatives" will not
         include any organization more than half of whose members are Employees
         who are owners, officers, or executives of the Employer or an
         Affiliate.

                                    SECTION 3

                             Employer Contributions

3.1      Amount of Employer Contributions.

         (a)     The amount to be contributed by an Employer shall be determined
                 annually by resolution of its Board of Directors, but shall not
                 exceed the maximum amount deductible under the applicable
                 provisions of Section 404 of the Code.

                                       12
<PAGE>

         (b)     The Committee shall maintain a separate Account for each
                 Participant, to which it shall credit the Participant's share
                 of all contributions, in accordance with Section 5, and which
                 shall be revalued in accordance with Section 6.

         (c)     The fact that the Company or another Employer may make no
                 contribution hereunder for any Taxable Year shall not be deemed
                 to terminate the Plan or the Trust created hereunder.

3.2      Payment of Employer Contributions.

         (a)     The Employer's contributions for each Taxable Year shall be
                 paid directly to the Trustees. As soon as practicable after the
                 time of each such payment, the Employer shall notify the
                 Committee of the amount of such contribution. The amount of
                 each such contribution shall be certified to be true and
                 correct and accordance with the terms of the Plan by the
                 Employer or by the independent accounting firm regularly
                 employed by the Employer, and such certification shall be final
                 and conclusive upon all persons interested in the Plan. No
                 adjustment affecting the Employer's net profit for any taxable
                 year, made subsequent to the payment of the Employer's
                 contribution to the Trustees and resulting from audit of the
                 Employer's Federal income tax return or otherwise, shall change
                 the amount of such contributions. The Employer's contribution
                 for any Plan Year shall be paid in full during the Plan Year,
                 or as soon as practicable after the close of such year, but not
                 later than the time prescribed by law for filing the Employer's
                 Federal income tax return for such year (including extensions
                 thereof).

         (b)     Employer contributions will be paid in cash or Qualifying
                 Employer Securities as the Employer's Board of Directors may
                 from time to time determine. Shares of Qualifying Employer
                 Securities will be valued at their then fair market value.
                 However, to the extent that the Trust has current obligations,
                 including amounts necessary to provide sufficient cash to pay
                 any currently maturing obligations under an Acquisition Loan,
                 the Employer contributions will be paid to the Trust in cash
                 subject to the discretion of the Employer's Board of Directors.
                 The Employer contribution will be paid to the Trust on or
                 before the date required to make such contribution qualify as a
                 deduction on the Employer's Federal income tax return for the
                 year.

         (c)     The Employer may make contributions to the Plan in whole or in
                 part in the form of Qualifying Employer Securities, provided
                 the Employer uses the fair market value of the securities as of
                 the date such contribution is made, as determined by an
                 independent appraiser, if required under Section 401(a)(28)(C)
                 of the Code, engaged by the Committee. Such stock may be
                 obtained from its own reserve or treasury stock, or it may be
                 obtained from open market purchases.

3.3      Payment of Administrative Expenses. The Employer intends to provide all
         funds required for the administrative expenses of the Plan. Funds not
         so provided by the Employer may be

                                       13
<PAGE>

         paid first from any other Employer, next from the Trust's earnings, and
         then from its principal.

3.4      Mistake in Fact. If, due to a mistake in fact, the Employer
         contributions to the Trust for any Plan Year exceeds the amount to be
         contributed by it, notwithstanding any provision to the contrary, the
         Committee shall direct the Trustee, as soon as such a mistake in fact
         is discovered, to either segregate such amount and return such amount
         to the Employer within one year after the payment of the contribution
         or apply it towards the contribution of the Employer for the next Plan
         Year(s).

3.5      Failure of Initial Plan Qualification. In the event that the
         Commissioner of Internal Revenue determines that the Plan is not
         initially qualified under the Code, any contribution made incident to
         that initial qualification by the Employer shall be returned to the
         Employer within one year after the date the initial qualification is
         denied, but only if the application for the qualification is made by
         the time prescribed by law for filing the Employer's return for the
         taxable year in which the Plan is adopted, or such later date as the
         Secretary of the Treasury may prescribe.

                                    SECTION 4

                           Participants Contributions

4.1      No Employee Contributions. No Employee contributions shall be permitted
         under this Plan.

4.2      No Rollovers. The Trustee shall not accept "Rollover Contributions"
         from any Participant.

                                    SECTION 5

                           Allocation of Contributions

5.1      Allocations Generally. The Employer contribution, as determined under
         Section 3.1, and Forfeitures for each Plan Year shall be allocated by
         the Committee, as of the close of such Plan Year, between the Accounts
         of all Participants entitled under Section 2.2 to share in the
         allocation, as follows:

         The Employer contribution and Forfeitures shall be allocated to each
         such Participant's Account in proportion to the ratio which his Cash
         Compensation for the Plan Year bears to the total Cash Compensation of
         all such Participants eligible to share in Employer contributions for
         the Plan Year; provided that with respect to Participants who are
         Highly Compensated Employer's and entitled under Section 2.2 hereof to
         share in an allocation for the Plan Year, their Cash Compensation for
         purposes of this Section shall be reduced pro rata to the extent
         necessary to ensure that their aggregate Cash Compensation for the Plan
         Year does not exceed one third of the aggregate Cash Compensation of
         all Participants who are entitled under Section 2.2 to share in an
         allocation for the Plan Year.

                                       14
<PAGE>

5.2      Maximum Limitations on Allocations of Contributions.

         (a)     The maximum annual additions that may be contributed or
                 allocated to a Participant's Account for any Limitation Year
                 shall not exceed the lesser of the "defined contribution dollar
                 limitation" (as defined in Section 5.2(b) hereof), and 25
                 percent of the Participant's "Total Compensation" (as defined
                 in Section 5.2(c) hereof). Annual additions to a Participant's
                 Account include the sum of:

                 (i)    Employer contributions and contributions made under a
                        salary reduction agreement pursuant to sections 401(k),
                        408(k) or 403(b) of the Code under any qualified defined
                        contribution plan (other than this Plan) or a
                        tax-deferred annuity maintained by the Employer,

                 (ii)   Forfeitures,

                 (iii)  the sum of all of the Participant's after-tax
                        contributions and nondeductible voluntary contributions
                        under any other qualified plan maintained by the
                        Employer,

                 (iv)   amounts allocated, after March 31, 1984, to an
                        individual medical account, as defined in Code Section
                        415(1)(2), that is part of a pension or annuity plan
                        maintained by the Employer,

                 (v)    amounts derived from contributions paid or accrued after
                        December 31, 1985, in taxable years ending after such
                        date, that are attributable to post-retirement medical
                        benefits allocated to the separate account of a Key
                        Employee, as defined in Section 11.7.7 hereof, under a
                        welfare benefit fund, as defined in Code Section 419(e),
                        maintained by the Employer, and

                 (vi)   allocations under a simplified employee pension.

         (b)     The defined contribution dollar limitation shall be:

                 (i)    for Limitation Years beginning after December 31, 1994
                        and before January 1, 2002, the lesser of: (A) $30,000
                        (or such other amount as is permissible under section
                        415(c)(1)(A) of the Code), or (B) twenty-five percent
                        (25%) of the Participant's Total Compensation paid
                        during such Limitation Year; and

                 (ii)   for Limitation Years beginning after December 31, 2001,
                        the lesser of: (A) $40,000 (or such other amount as is
                        permissible under section 415(c)(1)(A) of the Code), or
                        (B) one hundred percent (100%) of the Participant's
                        Total Compensation paid during such Limitation Year.

                 In determining the above limitations, all defined contribution
                 plans of the Employer shall be considered as one plan.

                                       15
<PAGE>

         (c)     "Total Compensation" for any person during any period means the
                 total compensation paid to such person during such period by
                 all Affiliates which is required to be reported to such person
                 on a written statement under section 6041(d), 6051(a)(3) and
                 6052 of the Code, plus any elective deferrals (within the
                 meaning of section 402(g) of the Code) under any qualified cash
                 or deferred arrangement described in section 401(k) of the Code
                 and maintained by any Affiliate, any tax- deferred annuity
                 described in section 403(b) of the Code and maintained by any
                 Affiliate, any salary reduction simplified employee pension
                 plan described in section 408(k) of the Code and maintained by
                 any Affiliate, any salary reduction contributions under any
                 cafeteria plan described in section 125 of the Code and
                 maintained by any Affiliate and any salary reduction
                 contributions under any qualified transportation fringe
                 benefits plan described in section 132(f) of the Code and
                 maintained by an Affiliate. In no event shall a person's Total
                 Compensation (a) for any Plan Year beginning after December 31,
                 1993 and before January 1, 2002 include any compensation in
                 excess of $150,000 (or such other amount as may be permitted
                 under section 401(a)(17) of the Code); and (b) for any Plan
                 Year beginning after December 31, 2001 include any compensation
                 in excess of $200,000 (or such other amount as may be permitted
                 under section 401(a)(17) of the Code). If there are less than
                 twelve (12) months in the Plan Year, the compensation
                 limitation (as adjusted) shall be prorated by multiplying such
                 limitation by a fraction, the numerator of which is the number
                 of months in the Plan Year and the denominator of which is
                 twelve (12). In addition, for Limitation Years after 1997, each
                 Employee's Total Compensation shall include any amounts by
                 which the Employee's compensation paid by the Employer or any
                 Affiliate has been reduced pursuant to a compensation reduction
                 agreement under the terms of any plan described in section 457
                 of the Code.

                 Notwithstanding the foregoing, for purposes of this Section 5.2
                 only, Total Compensation for a Participant who is Totally
                 Disabled is the Total Compensation such Participant would have
                 received for the Plan Year if the Participant had been paid at
                 the annual rate of Total Compensation paid immediately before
                 becoming Totally Disabled; such imputed Total Compensation for
                 the disabled Participant may be taken into account only if the
                 Participant is not a Highly Compensated Employee and
                 contributions made on behalf of such Participant are
                 nonforfeitable when made.

         (d)     If a short Plan Year is created because of an amendment
                 changing the Plan Year to a different 12-consecutive month
                 period, the maximum permissible annual additions will not
                 exceed the defined contribution dollar limitation multiplied by
                 the following fraction:

                         Number of months in the short Plan Year
                         ---------------------------------------
                                           12

         (e)     Should not more than one-third of the Employer contributions
                 for a year which are deductible be allocated to Highly
                 Compensated Employees, the above annual addition limits shall
                 not include Forfeitures of Qualifying Employer Securities if
                 such

                                       16
<PAGE>

                 securities were acquired with the proceeds of an Acquisition
                 Loan or acquired with deductible Employer contributions used to
                 pay interest on such Acquisition Loan and charged to such
                 Participant's Account.

         (f)     If there should be an excessive annual addition for any
                 Participant's Account as a result of the allocation of
                 Forfeitures, a reasonable error in estimating a Participant's
                 annual Total Compensation, a reasonable error in determining
                 the amount of "elective deferrals" within the meaning of Code
                 Section 402(g)(3) that may be made with respect to any
                 individual under the limits of Code Section 415, or under other
                 limited facts and circumstances which the Commissioner of the
                 Internal Revenue Service finds justifiable, the excess shall be
                 held in a suspense account for the benefit of the Participant,
                 and be allocated in the subsequent Plan Year pursuant to the
                 following:

                 (i)    Any nondeductible voluntary Employee contributions, to
                        the extent they would reduce the excessive annual
                        addition, will be returned to the Participant;

                 (ii)   If after the application of paragraph (i) an excessive
                        annual addition still exists, and the Participant is
                        covered by the Plan at the end of the Limitation Year,
                        the excess in the Participant's Account will be used to
                        reduce Employer contributions (including any allocation
                        of Forfeitures) to such Account in the next Limitation
                        Year, and each succeeding Limitation Year if necessary;
                        provided that the Committee shall have the discretion,
                        to be exercised on a uniform and nondiscriminatory
                        basis, to allocate said excess to the Participant's
                        Account together with the amount otherwise allocable
                        under Section 5.1 hereof, but only to the extent
                        permissible under Code Section 401(a)(4).

                 (iii)  If after the application of paragraphs (i) and (ii) an
                        excessive annual addition still exists, and the
                        Participant is not covered by the Plan at the end of the
                        Limitation Year, the excessive annual addition will be
                        held unallocated in a suspense account. The suspense
                        account will be applied to reduce future Employer
                        contributions (including allocation of any Forfeitures)
                        for all remaining Participants in the next Limitation
                        Year, and each succeeding Limitation Year if necessary;

                 (iv)   If a suspense account is in existence at any time during
                        the Limitation Year pursuant to this section, it will
                        not participate in the allocation of the trust's
                        investment gains and losses. If a Suspense Account is in
                        existence at any time during a particular Limitation
                        Year, all amounts in the Suspense Account must be
                        allocated and reallocated to Participants' Accounts
                        before any Employer or Employee Contributions may be
                        made to the Plan for that Limitation Year. Excess
                        amounts may not be distributed directly to Participants
                        or former Participants.

                                       17
<PAGE>

5.3      Multiple Plan Reduction: If an Employee is a Participant in one or more
         defined benefit plans and one or more defined contribution plans
         maintained by the Employer, the sum of the defined benefit plan
         fraction and the defined contribution plan fraction for any year may
         not exceed 1.0 for any Limitation Year beginning prior to January 1,
         2000; provided however, that this limitation shall only apply if and to
         the extent that the benefits under the Employers qualified defined
         benefit plan or any other qualified defined contribution plan of the
         Employer are not limited so that such sum is not exceeded. The defined
         benefit plan fraction for any year is a fraction (1) the numerator of
         which is the projected "annual benefit" of the Participant under the
         Plan (determined as of the close of the Plan Year), and (b) the
         denominator of which is the lesser of: (1) the product of 1.25
         multiplied by the maximum dollar limitation in effect under Section
         415(b)(1)(A) of the Code for such year, or (2) the product of 1.4
         multiplied by the amount which may be taken into account under Section
         415(b)(1)(B) of the Code for such year.

         The defined contribution plan fraction for any year is a fraction (a)
         the numerator of which is the sum of the "annual additions" to the
         Participant's Account as of the close of the Plan Year and (b) the
         denominator of which is the sum of the lesser of the following amounts
         determined for such year and each prior year of service with the
         Employer: (1) the product of 1.25 multiplied by the dollar limitation
         in effect under Section 415(c)(1)(A) of the Code for such year
         (determined without regard to Section 415(c)(6) of the Code), or (2)
         the product of 1.4 multiplied by the amount which may be taken into
         account under Section 415(c)(1)(B) of the Code for such year. The
         compensation limitation referred to in (2) shall not apply to any
         contribution for medical benefits (within the meaning of section 401(h)
         of the Code) which is otherwise treated as an annual addition under
         Section 415(l)(1) of the Code.

         (a)     Ton-Heavy Plans. Notwithstanding the foregoing, for any
                 Top-Heavy Plan Year, 1.0 shall be substituted for 1.25 unless
                 the extra minimum allocation pursuant to Section 11.5 is being
                 made. However, for any Plan Year in which this Plan is a Super
                 Top-Heavy Plan, 1.0 shall be substituted for 1.25 in any
                 event.

                 (i)    Special Rule for Defined Contribution Fraction: At the
                        election of the Administrator, in applying the
                        provisions of Section 5.4 with respect to the defined
                        contribution plan fraction for any Plan Year ending
                        after December 31, 1982, the amount taken into account
                        for the denominator for each Participant for all Plan
                        Years ending before January 1, 1983 shall be an amount
                        equal to the product of (a) the amount of the
                        denominator determined under Section 5.2 for Plan Years
                        ending before January 1, 1982, multiplied by (b) the
                        "transition fraction".

                              For purposes of the preceding paragraph, the term
                              "transition fraction" means a fraction (a) the
                              numerator of which is the lesser of (1) $51,875 or
                              (2) 1.4 multiplied by twenty-five percent (25%) of
                              the Participant's Total Compensation for the Plan
                              Year ending in 1981, and (b) the denominator of
                              which is the lesser of (1) $41,500 or (2)
                              twenty-five percent (25%) of the Participant's
                              Total Compensation for the Plan Year ending in
                              1981.

                                       18
<PAGE>

                 (ii)   Excessive Benefit: If the sum of the defined benefit
                        plan fraction and the defined contribution plan fraction
                        shall exceed 1.0 in any year for any Participant in this
                        Plan, the Employer shall adjust the numerator of the
                        defined contribution plan fraction so that the sum of
                        both fractions shall not exceed 1.0 in any year for such
                        Participant.

                 (iii)  Limitation Year: For purposes of determining "annual
                        additions", the limitation year shall be the Plan Year.

                 (iv)   In the case of a group of Employers which constitutes
                        either a controlled group of corporations, trades or
                        businesses under a common control (as defined in Section
                        1563(a) or Section 414(b) or (c) as modified by Section
                        415(h) of the Code), or an affiliated service group (as
                        defined by Section 414(m) of the Code), all such
                        Employers shall be considered as a single Employer for
                        purposes of applying the limitation of Section 415 of
                        the Code.

         (b)     Coordination of Plans. If the Employer maintains one or more
                 defined contribution plans in addition to this Plan, and there
                 is an excessive annual addition to any Participant's Account,
                 said excess shall be addressed in the first instance under the
                 other defined contribution plans. To the extent an excess
                 remains after exhaustion of the procedures set forth under such
                 other defined contribution plans, the excess shall be
                 eliminated pursuant to Section 5.2(f) of this Plan.

                                    SECTION 6

                      Allocation to Participant's Accounts

6.1      General Rules.

         (a)     The Company Stock Account maintained for each Participant will
                 be credited annually with his allocable share of Qualifying
                 Employer Securities (including fractional shares) purchased and
                 paid for by the Trust or contributed in kind to the Trust.

                 Financed Shares shall initially be credited to a "Loan Suspense
                 Account" and shall be allocated to the Company Stock Accounts
                 of Participants only as payments on the Acquisition Loan are
                 made by the Trustee. The number of Financed Shares to be
                 released from the Loan Suspense Account for allocation to
                 Participant's Company Stock Accounts for each Plan Year shall
                 be determined by the Plan Committee in the Exempt Loan
                 documents under either method (1) or (2) below, as follows:

                 (1)    General Method - The number of Financed Shares held in
                        the Loan Suspense Account immediately before the release
                        for the current Plan Year shall be multiplied by a
                        fraction. The numerator of the fraction shall be the
                        amount of principal and interest paid on the Acquisition
                        Loan for that Plan Year. The denominator of the fraction
                        shall be the sum of the numerator plus the total

                                       19
<PAGE>

                        payments of principal and interest on that Acquisition
                        Loan projected to be paid for all future Plan Years. For
                        this purpose, the interest to be paid in future years is
                        to be computed by using the interest rate in effect as
                        of the current allocation date.

                 (2)    Alternative Method - The Plan Committee may elect at the
                        time an Acquisition Loan is incurred (or the provisions
                        of the Acquisition Loan may provide) for the release of
                        Financed Shares from the Loan Suspense Account based
                        solely on the ratio that the payments of principal for
                        each Plan Year bear to the total principal amount of the
                        Acquisition Loan. This method may be used only to the
                        extent that: (a) the Acquisition Loan provides for
                        annual payments of principal and interest at a
                        cumulative rate that is not less rapid at any time than
                        level annual payments of such amounts for ten years; (b)
                        interest included in any payment on the Acquisition Loan
                        is disregarded only to the extent that it would be
                        determined to be interest under standard loan
                        amortization tables; and (c) the entire duration of the
                        Acquisition Loan repayment period does not exceed ten
                        years, even in the event of a renewal, extension or
                        refinancing of the Acquisition Loan.

                 The Other Investments Account maintained for each Participant
                 will be credited (or debited) annually with his share of any
                 net income (or loss) of the Trust, and with his share of
                 Employer contributions in cash. It will be debited for its
                 proportionate share of any cash payments made by the Trust for
                 the purchase of Qualifying Employer Securities or the repayment
                 of principal and interest on any Acquisition Loan.

         (b)     The Trustee shall, as of each Valuation Date, adjust each
                 Participant's Company Stock Account and Other Investments
                 Account for transactions since the date of the preceding
                 adjustment. Separate adjustments shall be made for each
                 Participant's Account as follows:

                 (i)    The number of shares of Qualifying Employer Securities
                        in each Participant's Company Stock Account shall be the
                        number of shares as of the date of the preceding
                        adjustment, but increased by (A) Qualifying Employer
                        Securities allocated to it pursuant to Section 5.1, (B)
                        stock dividends on Qualifying Employer Securities
                        previously allocated to said Account, and (C) Qualifying
                        Employer Securities acquired with funds from the
                        corresponding Other Investments Account, and shall be
                        decreased by distributions from said Account.

                 (ii)   The fair market value of each Other Investments Account
                        shall be the fair market value of assets in such Account
                        as of the date of the preceding adjustment, but
                        increased by (A) money allocated to it pursuant to
                        Section 5.1, (B) dividends on Qualifying Employer
                        Securities previously allocated to the corresponding
                        Participant's Company Stock Account, and (C) investment
                        gains, including gains attributable to the discharge of
                        an Acquisition Loan or Loans; and shall be decreased by
                        (1) distributions from said Account, (2)

                                       20
<PAGE>

                        amounts used to acquire Qualifying Employer Securities
                        for the corresponding Participant's Company Stock
                        Account, and (3) investment losses.

                 (iii)  For the purposes of subsection (b)(ii) hereof, the
                        investment gain or loss in each Other Investments
                        Account since the last adjustment shall be its pro rata
                        share of the investment gain or loss of all assets in
                        the Other Investments Account based on the change in
                        fair market value of assets therein since the last
                        adjustment and computed in accordance with uniform
                        valuation procedures established by the Trustee.

                 (iv)   Shares of Qualifying Employer Securities held in the
                        Loan Suspense Account and dividends paid thereon, funds
                        borrowed for the purchase of Qualifying Employer
                        Securities, and interest and all other costs
                        attributable to the Loan Suspense Account shall be
                        excluded for all purposes under this Section, except to
                        the limited extent provided in Section 13.7(b).

                 (v)    Adjustments made pursuant to subsections (i)(B), (i)(C),
                        (ii)(B), and (ii)(C) shall not be considered "annual
                        additions" within the meaning of Section 5.2.

6.2      Retroactive Contributions. A Participating Employer shall make a
         Retroactive Contribution in respect of any individual previously
         employed by it who is re-employed by any Affiliate after December 12,
         1994 following the completion of a period of Qualified Military
         Service. Such Retroactive Contribution shall be made in the following
         manner for each Plan Year that includes any part of the period of
         Qualified Military Service:

         (a)     An allocation percentage shall be computed by dividing (i) the
                 sum of the fair market value of all Financed Shares and only
                 other Shares made from Employer Contributions in such Plan Year
                 plus the remaining cash amount from Employer Contributions for
                 such Plan Year by (ii) the aggregate amount of Cash
                 Compensation used in the allocation for such Plan Year. Fair
                 market value for such purposes shall be determined as of the
                 last day of the Plan Year.

         (b)     A notional allocation shall be determined by multiplying (A)
                 the percentage determined under Section 6.2(a) by (B) the Cash
                 Compensation which the individual would have had for such Plan
                 Year if he had remained in the service of his Participating
                 Employer in the same capacity and earning Cash Compensation and
                 Total Compensation at the annual rate in effect immediately
                 prior to the commencement of the Qualified Military Service
                 (or, if such rates are not reasonably certain, at an annual
                 rate equal to the actual Cash Compensation and Total
                 Compensation paid to him for the 12-month period immediately
                 preceding the Qualified Military Service).

         (c)     An actual Retroactive Contribution for the Plan Year shall be
                 determined by computing the excess of (A) the notional
                 allocation determined under Section 5.4(b) over (B) the sum of
                 the fair market value of all Financed Shares and only other

                                       21
<PAGE>

                 Shares made from Employer Contributions in such Plan Year plus
                 the remaining cash amount from Employer Contributions for such
                 Plan Year actually allocated to such individual for such Plan
                 Year.

6.3      Reports to Participants. As soon as practicable after each annual
         Valuation Date, the Committee shall advise each Participant of the
         amount then credited to his Account.

6.4      Diversification -- Elections. Each Qualified Participant shall be
         permitted to direct the Plan as to the investment of twenty-five
         percent (25%) of the value of the Participant's Account Balance
         attributable to Qualifying Employer Securities. Such direction shall be
         made within the Qualified Election Period and shall be made no later
         than 90 days after the close of each Plan Year which occurs within the
         Qualified Election Period. In the case of the last Plan Year in which
         such direction may be made, the amount of permitted investment shall be
         increased to fifty percent (50%) of the Participant's Account.

6.5      Diversification -- Distributions. The portion of a Qualified
         Participant's Account Balance with respect to which a diversification
         election is made under Section 6.3 shall be distributed (without regard
         to the distribution limitations of Section 409(d) of the Code) to the
         Qualified Participant within 90 days after the last day of the period
         during which the election may be made.

6.6      Diversification -- Required Consents. Notwithstanding the foregoing,
         any election under this Section by a Qualified Participant which
         results in a distribution to such Participant shall be subject to the
         consent provisions of Section 9.4 and 10.5 of the Plan. If the consent
         is not secured, then amounts otherwise distributable under this Section
         will remain in the Plan.

                                    SECTION 7

                     Retirement and Distribution of Benefits

7.1      Vesting. At Normal Retirement Age, the Participant shall have a 100%
         nonforfeitable interest in his account. If a Participant defers his
         retirement beyond his Normal Retirement Date, he shall continue as a
         Participant until his actual retirement, but no distributions shall be
         made from his Accounts until his actual retirement (other than
         distributions required under Section 7.6), unless the Participant
         elects to withdraw all or part of his Participant's Account pursuant to
         this Section.

7.2      Distribution -- Timing. If a Participant's Service terminates by reason
         of his retirement pursuant to Section 7.1, the total balance of his
         Account (including his Other Investments Account), as of the Valuation
         Date which coincides with or next follows the date of his retirement,
         shall be distributed to him as soon as practicable thereafter.

7.3      Distribution -- Method. At such time that distributions are permissible
         under the Plan, the Participant's Company Stock Account and Other
         Investment Account shall be distributed in a lump sum.

                                       22
<PAGE>

         Unless otherwise elected by a Participant, the distribution of his
         account attributable to Qualifying Employer Securities as well as other
         (diversified) investment shall commence not later than sixty (60) days
         after the Anniversary Date coinciding with or next following his Normal
         Retirement Age (or his termination of Service, if later). However, if
         the amount of a Participant's account attributable to both Qualifying
         Employer Securities as well as other (diversified) investments cannot
         be ascertained by the Committee by the date on which such distribution
         should commence, or if the Participant cannot be located, distribution
         of his account shall commence within sixty (60) days after the date on
         which his Company Stock Account Value can be determined or after the
         date on which the Committee locates the Participant.

7.4      Distribution -- Form. Distribution of a Participant's Company Stock
         Account will be made as elected by the Participant or his Beneficiary
         either in cash or whole shares of Qualifying Employer Securities, with
         cash being paid in lieu of fractional shares. Any balance in a
         Participant's Other Investments Account will be paid in cash. If
         Qualifying Employer Securities are not available for purchase by the
         Trustee, then the Trustee shall hold such balance until Qualifying
         Employer Securities are acquired and then make such distribution. If
         the Trustee is unable to purchase Qualifying Employer Securities
         required for distribution, he shall make distribution in cash within
         one year after the date the distribution was to be made; except in the
         case of a retirement, distribution shall be made within sixty (60) days
         after the close of the Plan Year in which a Participant's retirement
         occurs. Notwithstanding the foregoing, in the case of a Plan
         established and maintained by a company, as described in Section
         409(h)(2) of the Code, which is prohibited by law or the company's
         charter or bylaws from redeeming or purchasing its own securities,
         Qualifying Employer Securities will not be required to be distributed
         if the Participant is permitted to receive a distribution in cash.

7.5      (a)     Right of First Refusal

                 Shares of the Qualifying Employer Securities distributed by the
                 Trustee shall be subject to a "right of first refusal". The
                 right of first refusal shall provide that, prior to any
                 subsequent transfer, such Qualifying Employer Securities must
                 first be offered in writing to the Employer, and then, if
                 refused by the Employer, to the Trust, at the then fair market
                 value. The Company and the Committee (on behalf of the Trust)
                 shall have a total of fourteen (14) days (from the date the
                 Participant or Beneficiary gives written notice to the
                 Employer) to exercise the right of first refusal on the same
                 terms offered by a prospective buyer. A Participant (or
                 Beneficiary) entitled to a distribution of Qualifying Employer
                 Securities may be required to execute an appropriate stock
                 transfer agreement (evidencing the right of first refusal)
                 prior to receiving a certificate for such Securities.

                 Notwithstanding the foregoing, a "right of first refusal" shall
                 not be permitted in the case of Qualifying Employer Securities
                 which are publicly traded on an established securities market.

                                       23
<PAGE>

         (b)     Put Option

                 In the case of a distribution of Qualifying Employer Securities
                 which are not readily tradeable on an established securities
                 market, the Plan shall provide the Participant with a put
                 option that complies with the requirements of Section 409(h) of
                 the Code.

                 The Employer shall issue such a "put option" to each
                 Participant receiving a distribution of Qualifying Employer
                 Securities from the Trust subject to the availability of
                 retained earnings in such amount that complying with the "put
                 option" shall not be ultra vires. The put option shall permit
                 the Participant to sell such Qualifying Employer Securities to
                 the Employer, at any time during two option periods, at the
                 then fair market value as determined as of the most recent
                 valuation date (prior to the exercise of such right) by an
                 independent appraiser meeting requirements similar to the
                 requirements of the regulations prescribed under Sections
                 170(a)(1) and 401(a)(28)(C) of the Code engaged by the
                 Committee. The first put option period shall be a period of
                 sixty (60) days beginning on the date of distribution of
                 Qualifying Employer Securities to the Participant. The second
                 put option period shall be a period of sixty (60) days
                 beginning after the new determination of the fair market value
                 of such Qualifying Employer Securities by the Committee in the
                 next following Plan Year provided that if such determination is
                 made before the 13-month anniversary date of distribution of
                 Qualifying Employer Securities to the Participant, then the
                 second put option period shall be a period of sixty (60) days
                 beginning after the new determination of the fair market value
                 of such Qualifying Employer Securities by the Committee in the
                 next following Plan Year.

                 The Trust shall have the option to assume the rights and
                 obligations of the Employer at the time the Participant
                 requires the purchase by the Employer. The Committee may be
                 permitted by the Employer to direct the Trustee to purchase
                 Qualifying Employer Securities tendered to the Employer under a
                 put option.

                 Such put option shall provide that if an Employee exercises the
                 put option, the Employer (or the Plan if the Trustee so
                 elects), shall repurchase the Qualifying Employer Securities by
                 paying the fair market value of a Participant's Account balance
                 in cash, in up to five substantially equal annual payments. The
                 first installment shall be paid no later than 30 days after the
                 Participant exercises the put option. The payor under the put
                 option will pay a reasonable rate of interest and provide
                 adequate security on amounts not paid after 30 days.

         (c)     Placement of Restrictions on Stock Certificates

                 Shares of Qualifying Employer Securities held or distributed by
                 the Trustee may include such legend restrictions on
                 transferability as the Company may reasonably require in order
                 to assure compliance with applicable Federal and State
                 securities law and with the provisions of this paragraph.
                 Except as otherwise provided in the Section, no shares of
                 Qualifying Employer Securities held or distributed by the
                 Trustee may be subject to a put, call or other option or
                 buy-sell, or similar

                                       24
<PAGE>

                 arrangement. The provisions of this Section shall continue to
                 be applicable to shares of such Securities, even if the Plan
                 ceases to be an employee stock ownership plan under Section
                 4975(e)(7) of the Code.

7.6      Minimum Required Distributions.

         (a)     Required minimum distributions of a Participant's or Former
                 Participant's Account shall commence no later than:

                 (i)    if the Participant or Former Participant attains age 70
                        1/2 before January 1, 1997, the calendar year in which
                        the Participant or Former Participant attains age
                        70 1/2; or

                 (ii)   if the Participant or Former Participant attains age 70
                        1/2 after December 31, 1996 and was not a Five Percent
                        Owner at any time during the Plan Year ending in the
                        calendar year in which he attained age 70 1/2 or during
                        any subsequent years, the later of (A) the calendar year
                        in which he attains or attained age 70 1/2 or (B) the
                        calendar year in which he terminates employment with the
                        Employer and all Affiliates; provided, however, that a
                        Participant or Former Participant may elect that his
                        distribution commence in the calendar year in which he
                        attains age 70 1/2; or

                 (iii)  if the Participant or Former Participant attains age 70
                        1/2 after December 31, 1996 and is or was a Five Percent
                        Owner at any time during the Plan Year ending in the
                        calendar year in which he attained age 70 1/2 or during
                        any subsequent years, the later of (A) the calendar year
                        in which he attains age 70 1/2 or (B) the calendar year
                        in which he first becomes a Five Percent Owner;
                        provided, however, that any Participant who is employed
                        by an Employer after December 31, 1996 may elect not to
                        receive, or to discontinue receiving, such required
                        minimum distributions until April l of the year
                        following the year in which such Participant terminates
                        employment or is or becomes a Five Percent Owner,
                        whichever is earlier.

         (b)     The required minimum distributions contemplated by Section 7.6
                 (a) shall be made as follows:

                 (i)    The minimum required distribution to be made for the
                        calendar year for which the first minimum distribution
                        is required shall be no later than April 1st of the
                        immediately following calendar year and shall be equal
                        to the quotient obtained by dividing (A) the vested
                        balance credited to the Participant's or Former
                        Participant's Account as of the last Valuation Date to
                        occur in the calendar year immediately preceding the
                        calendar year in which the first minimum distribution is
                        required (adjusted to account for any additions thereto
                        or subtractions therefrom after such Valuation Date but
                        on or before December 31st of such calendar year); by
                        (B) the Participant's or Former Participant's life
                        expectancy (or, if his Beneficiary is a Designated

                                       25
<PAGE>

                        Beneficiary, the joint life and last survivor expectancy
                        of him and his Beneficiary); and

                 (ii)   the minimum required distribution to be made for each
                        calendar year following the calendar year for which the
                        first minimum distribution is required shall be made no
                        later than December 31st of the calendar year for which
                        the distribution is required and shall be equal to the
                        quotient obtained by dividing (A) the vested balance
                        credited to the Participant's or Former Participant's
                        Account as of the last Valuation Date to occur in the
                        calendar year prior to the calendar year for which the
                        distribution is required (adjusted to account for any
                        additions thereto or subtractions therefrom after such
                        Valuation Date but on or before December 31st of such
                        calendar year and, in the case of the distribution for
                        the calendar year immediately following the calendar
                        year for which the first minimum distribution is
                        required, reduced by any distribution for the prior
                        calendar year that is made in the current calendar
                        year); by (B) the Participant's or Former Participant's
                        life expectancy (or, if his Beneficiary is a Designated
                        Beneficiary, the joint life and last survivor expectancy
                        of him and his Beneficiary).

                 For purposes of this Section 7.6 (b), the life expectancy of a
                 Participant or Former Participant (or the joint life and last
                 survivor expectancy of a Participant or Former Participant and
                 his Designated Beneficiary) for the calendar year in which the
                 Participant or Former Participant attains age 70 1/2 shall be
                 determined on the basis of Tables V and VI, as applicable, of
                 section 1.72-9 of the Income Tax Regulations as of the
                 Participant's or Former Participant's and Beneficiary's
                 birthday in such year. Such life expectancy or joint life and
                 last survivor expectancy for any subsequent year shall be equal
                 to the excess of (1) the life expectancy or joint life and last
                 survivor expectancy for the year in which the Participant or
                 Former Participant attains age 70 1/2, over (2) the number of
                 whole years that have elapsed since the Participant or Former
                 Participant attained age 70 1/2.

         (c)     Payment of the distributions required to be made to a
                 Participant or Former Participant under this Section 7.6 shall
                 be made in accordance with Sections 7.3 and 7.4.

                                    SECTION 8

                             In Event of Disability

8.1      Vesting; Timing. In the event a Participant suffers a Total Disability,
         the total balance of his Participant Account, as of the Valuation Date
         which coincides with or next follows the determination of disability,
         shall become 100% vested and distributed to him in a lump sum as soon
         as administratively practicable after such Valuation Date. All such
         distributions shall be made in accordance with Sections 7.3, 7.4 and
         7.5, except as specifically noted to the contrary herein.

                                       26
<PAGE>

8.2      Subsequent Evidence of Disability. Once each year the Committee may
         require any disabled Participant receiving a disability retirement
         benefit who has not reached his Normal Retirement date to submit
         evidence that he is still disabled.

                                    SECTION 9

                              In the Event of Death

9.1      Vesting; Timing. In the event of the death of a Participant prior to
         the distribution of the total balance of his Participant Account, the
         total balance of his Accounts, as of the Valuation Date which coincides
         with or next follows the date of his death, shall be immediately 100%
         vested and distributed in one lump sum to his primary beneficiary or,
         if the primary beneficiary does not survive the Participant, then to
         his secondary beneficiary, or if no beneficiary has been designated or
         survives, then to the Participant's estate. All such distributions
         shall be made in accordance with Sections 7.3, 7.4, and 7.5, except as
         specifically noted to the contrary herein. If the Participant dies
         after distribution of his Participant Account has begun, the remaining
         balance will continue to be paid at least as rapidly as under the
         method of distribution being used prior to the Participant's death.

9.2      Beneficiary. At any time during his life, a Participant shall be
         entitled to designate a beneficiary (including a secondary beneficiary,
         if the Participant so desires), to whom in the event of death the
         distribution provided herein shall be paid, by signing and filing with
         the Committee a written designation of beneficiary in such form as
         shall be required by the Committee. Any beneficiary so designated may
         be changed by the Participant at any time or from time to time during
         his life, by signing and filing with the Committee a written
         notification of change of beneficiary in such form as shall be required
         by the Committee. If the Participant is married, the designated
         beneficiary shall be the Participant's spouse unless an election was
         made under Section 9.4.

9.3      Beneficiary of Married Participants. In the event a married Participant
         dies while still employed by the Employer or before the Participant's
         Account is paid to the Participant, the Participant's Account must be
         paid to the Participant's surviving spouse in a lump sum within five
         years. If a Participant dies before distributions have commenced and is
         not survived by a spouse, the Participant's entire remaining interest
         must be distributed within five years after the Participant's death to
         the Participant's beneficiary or beneficiaries (or, in the absence of a
         properly appointed beneficiary or beneficiaries, pursuant to Section
         9.5).

9.4      Designation of Beneficiary. The designated beneficiary of all benefits
         payable under this Plan shall be the Spouse of such Participant on the
         date of death, unless a waiver to such designation has been completed
         and received by the Committee in the form acceptable to the Committee.
         The waiver must be in writing and must be consented to by the
         Participant's spouse with such waiver specifically acknowledging the
         non-spouse beneficiary or any subsequent change in a non-spouse
         beneficiary. The spouse's consent to a waiver must be witnessed by a
         plan representative or notary public. Notwithstanding this consent
         requirement, if the Participant establishes to the satisfaction of a
         plan representative that such written consent may not be obtained
         because there is no spouse or the spouse cannot be

                                       27
<PAGE>

         located, a waiver will be deemed a qualified election. Any consent
         necessary under this provision will be valid only with respect to the
         spouse who signs the consent. Additionally, a revocation of a prior
         waiver may be made by a Participant without the consent of the spouse
         at any time before the commencement of benefits. The number of
         revocations shall not be limited.

9.5      Absence of Beneficiary Designation. If a Participant files no
         designation of beneficiary or revokes a designation previously filed
         without filing a new designation of beneficiary, or if all persons so
         designated as beneficiary shall predecease the Participant or die prior
         to complete distribution to them, the Trustee, pursuant to Employer
         instructions, shall distribute such death benefit or balance thereof to
         the following who shall be deemed beneficiaries: to such Participant's
         surviving spouse, or if none, to such Participant's surviving issue per
         stirpes and not per capita, or if none, to the Participant's estate.

                                   SECTION 10

          In the Event of Termination of Employment or Change in Status

10.1     General Rule. Subject to the provisions of Section 7.6 "Late
         Retirement", there shall be no distributions made to a Participant
         except on account of termination of employment, death, disability as
         provided for in Section 8, or termination of the Plan. All such
         distributions shall be made in accordance with Sections 7.3, 7.4, and
         7.5, except as specifically noted to the contrary herein.

10.2     Distribution -- Timing and Form. Distribution of the Participant's
         vested interest in his Account will be made as soon as practicable
         after the end of the Plan Year in which the Participant either (i)
         terminates Service otherwise than by his death, retirement, or
         disability, and is not re-employed by the Employer or an Affiliate on
         or before receiving a distribution hereunder, or (ii) incurs his fifth
         consecutive Break in Service. Said distribution shall be made in a lump
         sum, in whole shares of Company Stock (with cash paid in lieu of
         fractional shares and with respect to the vested balance of the
         Participant's Other Investments Account).

10.3     Vesting. The non-forfeitable portion of the Participant's Account
         balance of a Participant's Account shall be a percentage of such
         Account based upon the number of Years of Service that such Participant
         has credited from his date of employment after attainment of age 18
         according to the following schedule:

                Years of Service               Present Vested
                ----------------               --------------
               Less than 2 years                      0%
                       2                             25%
                       3                             50%
                       4                             75%
                5 or more years                     100%

                                       28
<PAGE>

10.4     Forfeitures. As of each Anniversary Date, any amounts which became
         Forfeitures since the last Anniversary Date shall first be made
         available to reinstate previously forfeited account balances of Former
         Participants, if any, in accordance with Section 10.5. The remaining
         Forfeitures, if any, shall be added to the Employer's contribution made
         pursuant to Section 5.1 and allocated among the Participant's Accounts
         in the same manner as the Employer's contribution for the current year.
         In the event the allocation of Forfeitures provided herein shall cause
         the "annual addition" (as defined in Section 5.2) to any Participant's
         Account to exceed the amount allowable by the Code, the excess shall be
         reallocated in accordance with Section 5.2(b). However, a Participant
         who performs less than a Year of Service during any Plan Year shall not
         share in Forfeitures for that year, unless required pursuant to Section
         11.3. If a portion of a Participant's Account is forfeited, Company
         Stock allocated to the Participant's Company Stock Account must be
         forfeited only after the Participant's Other Investments Account has
         depleted. If interest in more than one class of Company Stock has been
         allocated to a Participant's Account, the Participant must be treated
         as forfeiting the same proportion of each such class.

10.5     Restoration of a Participant's Account Upon Reemployment. If a former
         Participant is reemployed by the Employer before incurring five (5)
         consecutive one-year Breaks-in-Service, and such Participant had
         received a distribution of his entire vested interest in his Account
         pursuant to Section 10.1 prior to being reemployed, the full amount in
         such Participant's Employer contribution Account on the date of the
         prior distribution (including vested and nonvested portions) will be
         restored if:

         (a)     The Participant repays to the Plan the full amount of the prior
                 distribution, other than his voluntary contribution, before the
                 Participant incurs five (5) consecutive one-year
                 Breaks-in-Service commencing after such withdrawal; and

         (b)     The Participant was not fully vested in the portion his
                 Participant's Account attributable to Employer contributions at
                 the time of the distribution.

10.6     Voluntary and Involuntary Cash-outs. Notwithstanding any provision of
         the Plan to the contrary, a lump sum shall be made in lieu of all
         vested benefits if the value of the vested portion of the Former
         Participant's Account $3,500 (or such other amount as may be permitted
         under section 417(e) of the Code) or less and the distribution is made
         prior to January 1, 1998 and $5,000 (or such other amount as may be
         permitted under section 417(e) of the Code) or less and the
         distribution is made on or after January 1, 1998. Such immediate lump
         sum payment shall be made in cash (unless the Participant elects to
         receive such payment in shares of Qualifying Employer Securities)
         without regard to the Participant's election related to the timing of
         such payments as soon as administratively practicable following the
         Participant's termination of employment with all Affiliates. If the
         Participant, upon termination of Service for any reason other than
         retirement, death, or Total Disability, does not consent to the payment
         of the vested portion of the Participant's Account, and if the value of
         such Account exceeds $3,500 (or such other amount as may be permitted
         under section 417(e) of the Code) and the distribution is made prior to
         January 1, 1998 and $5,000 (or such other amount as may be permitted
         under section 417(e) of the Code) on the Valuation Date immediately
         following the Employees termination of Service (or as of any

                                       29
<PAGE>

         prior Valuation Date) and the distribution is made on or after January
         1, 1998, the Committee shall direct the Trustee to place the then value
         of such Account in one (1) or more investment accounts permitted under
         the Plan in trust for the named Employee for distribution commencing on
         the Valuation Date immediately following his attainment of age 65 (or
         death, if earlier). The Account and all accumulated interest shall be
         paid to the Employee at the time he attains his Normal Retirement Age.
         In the event the Employee dies before reaching retirement age, the
         Account balance shall be paid to any beneficiary the Employee has named
         in a written designation filed with the Committee or, in the absence of
         such designation, to the Employee's estate subject to the terms of
         Section 9 of the Plan. The Trustee shall have no other responsibilities
         with respect to such accounts except that, if the balance of any such
         account shall approach the amount of federal insurance, the Trustee
         shall split the account into two (2) or more accounts.

10.7     Changes in Address. It shall be the responsibility of the terminating
         Participant to keep the Committee informed as to his address, and the
         Trustee and the Committee shall not be required to do anything further
         than sending all papers, notices, payments, or the like to the last
         address given them by such Participant unless they can be shown to have
         acted in bad faith, having had knowledge of the Participant's actual
         whereabouts.

10.8     Latest Time for Distribution. Except as limited by Sections 7, 8, 9 and
         10, whenever the Trustee is to make a distribution or to commence a
         series of payments on or before an Anniversary Date, the distribution
         or series of payments may be made or begun on such date or as soon
         thereafter as is practicable, but in no event later than 180 days after
         the Anniversary Date. Except, however, unless a Former Participant
         elects in writing to defer the receipt of benefits (such election may
         not result in a death benefit that is more than incidental), the
         payment of benefits shall begin not later than the 60th day after the
         close of the Plan Year in which the latest of the following events
         occurs:

         (a)     the date on which the Participant attains the earlier of age 65
                 or the Normal Retirement Date specified herein,

         (b)     the 5th anniversary of the year in which the Participant
                 commenced participation in the Plan, or

         (c)     the date the Participant terminates his service with the
                 Employer.

10.9     Age 70-1/2 Rule. Notwithstanding any provisions of the Plan, in no
         event shall a distribution schedule or form of distribution pursuant to
         Articles 7, 8, 9, or 10 exceed the period permitted under Section
         401(a)(9) of the Code or Treasury Regulations Section 1.401 (a)(9)-1 or
         Section 1.401(a)(9)-2.

10.10    Deemed Cash-outs if 0% Vesting. Notwithstanding anything to the
         contrary, if the value of a Participant's vested portion of the
         Participant's Account is zero on the date of termination of employment,
         then the Participant shall be deemed to have received a total
         distribution of the vested portion of such Participant's Account on
         such date.

                                       30
<PAGE>

10.11    Eligible Rollover Distributions. This Section applies to distributions
         made from the Plan to Distributees on or after January 1, 1993.
         Notwithstanding any provision of the Plan to the contrary that would
         otherwise limit a Distributee's election under this Section, a
         Distributee may elect at the time and in the manner prescribed by the
         Plan Administrator, to have any portion of an Eligible Rollover
         Distribution paid directly to an Eligible Retirement Plan specified by
         the Distributee in a Direct Rollover. For purposes of this Section --

         "Distributee" means the Employee or former Employee, the Employee's or
         former Employee's surviving spouse and the Employee's or former
         Employee's spouse or former spouse who is the alternate payee under a
         Qualified Domestic Relations Order, as defined in Section 414(p) of the
         Code, are Distributees with regard to the interest of the spouse or
         former spouse.

         "Eligible Retirement Plan" means an individual retirement account
         described in Section 408(a) of the Code, an individual retirement
         annuity described in Section 408(b) of the Code, an annuity plan
         described in Section 403(a) of the Code, or a qualified trust described
         in Section 401 (a) of the Code that accepts the Distributee's Eligible
         Rollover Distribution. However, in the case of an Eligible Rollover
         Distribution to the surviving spouse of a Participant, an Eligible
         Retirement Plan is an individual retirement account or individual
         retirement annuity.

         "Direct Rollover" means a payment by the Plan to the Eligible
         Retirement Plan specified by the Distributee.

         "Eligible Rollover Distribution" means any distribution of all or any
         portion of the balance to the credit of the Distributee, except that an
         Eligible Rollover Distribution does not include: any distribution that
         is one of a series of substantially equal periodic payments (not less
         frequently than annually) made for the life (or life expectancy) of the
         Distributee or the joint lives (or joint life expectancies) of the
         Distributee and the Distributee's designated Beneficiary, or for a
         specified period of ten (10) years or more; any distribution to the
         extent such distribution is required under section 401(a)(9) of the
         Code; any distribution made after December 31, 1999 on account of
         hardship; and in the case of a distribution made before January 1,
         2002, the portion of any distribution that is not includable in gross
         income (determined without regard to the exclusion for net unrealized
         appreciation with respect to employer securities). A portion of a
         distribution that is includable in the gross income of the Distributee
         that is treated as an Eligible Rollover Distribution may only be
         transferred in a direct rollover to an Eligible Retirement Plan that
         agrees to account separately for such portion of the distribution.

                                   SECTION 11

                         Top-Heavy Definitions and Rules

11.1     Effective Date of Top-Heavy Provisions. If the Plan is or becomes
         Top-Heavy in any Plan Year beginning after December 31, 1983, the
         provisions of Sections 11 will supersede any conflicting provision in
         the Plan.

                                       31
<PAGE>

11.2     Top-Heavy Vesting Schedule. If the Plan is determined to be Top-Heavy
         for any Plan Year, a Participant's vested percentage interest in his
         Participant's Account shall be determined in accordance with the
         Top-Heavy Vesting Schedule set forth in 11.2(d) of this Plan, subject
         to the following additional requirements:

         (a)     Years of Service for purposes of vesting under a Top-Heavy
                 Vesting Schedule shall include Years of Service when the Plan
                 was not Top-Heavy;

         (b)     If any Participant in the Plan is not credited with an Hour of
                 Service after the Plan becomes Top-Heavy, that Participant
                 shall not be subject to the Top-Heavy Vesting Schedule, but
                 shall remain subject to the vesting schedule set forth in
                 Section 10.2 and the rules in effect prior to the date the Plan
                 becomes Top-Heavy; and

         (c)     If the Plan ceases to be Top-Heavy, an Employee's vested
                 percentage interest in the contributions allocated to his
                 Participant's Account for Plan Years after the Plan Year in
                 which the Plan ceases to be Top-Heavy shall be determined in
                 accordance with the vesting schedule set forth in Section 10.2
                 of the Plan, unless otherwise set forth in Section 11.2 of this
                 Plan.

         (d)     If the Plan is a Top-Heavy Plan in a Plan Year, a Participant
                 who is credited with an Hour of Service in such Plan Year shall
                 have the non-forfeitable interest in his Accrued Benefit for
                 such Plan Year determined in accordance with the following
                 schedule:

                                                   Non-forfeitable
                                                       (Vested)
                         Years of Service             Percentage
                         ----------------          ---------------

                         Less than 3                      0%
                         3 years or more                100%

         (e)     Notwithstanding any provision to the contrary, the vested
                 benefit derived from Employer contributions of a Participant
                 may not be reduced below what it was before the Plan ceased to
                 be Top-Heavy and the vesting schedule was changed. In addition,
                 each Participant with three (3) or more Years of Service shall
                 be given the option of remaining under the Top-Heavy Vesting
                 Schedule within the same period as set forth in Section 16.3.

11.3     Minimum Contributions. If this Plan is Top-Heavy during any Plan Year,
         the Employer must make a Minimum Contribution consisting of Employer
         contributions and forfeitures on behalf of each Plan Participant who is
         a Non-Key Employee equal to an amount which is not less than three (3%)
         percent of such Participant's Total Compensation. A Minimum
         Contribution shall be made on behalf of such Participant even though,
         under other Plan provisions, the Participant would not otherwise be
         entitled to receive an allocation, or would

                                       32
<PAGE>

         have received a lesser allocation for the Plan Year due to (i) the
         Participant's failure to complete one thousand (1000) Hours of Service,
         or (ii) the Participant's failure to make mandatory contributions to
         the Plan, if required; or (iii) the Participant's Total Compensation is
         less than a stated amount.

         Notwithstanding the preceding paragraph, if the Employer's Minimum
         Contribution on behalf of each Plan Participant who is a Key Employee
         equals an amount which is less than three (3%) percent of such
         Participant's Total Compensation, then the Minimum Contribution
         required to be made for each Non-Key Employee is limited to not more
         than the highest contribution rate under the Plan for each Key
         Employee. Therefore, if no Employer contribution is made on behalf of a
         Key Employee, then no Minimum Contribution is required to be made on
         behalf of each Non-Key Employee. However, if the Plan is included in a
         Required Aggregation Group and it enables a defined benefit plan of the
         Employer to meet the requirements of Sections 401(a)(4) or 410 of the
         Internal Revenue Code, then the Minimum Contribution for Non-Key
         Employees cannot be less than three (3%) percent, regardless of the
         contribution rate for Key Employees. For purposes of this subparagraph,
         all defined contribution plans included in a Required Aggregation Group
         shall be treated as one Plan.

         A Minimum Contribution shall not be made on behalf of any Participant
         who is not employed by the Employer on the last day of the Plan Year.
         For purposes of computing the Minimum Contribution for any Plan
         Participant, amounts paid by the Employer to Social Security shall be
         disregarded. Also, for all Plan years, except those beginning before
         January 1, 1985, any Employer contribution attributable on behalf of
         any Key Employee to a salary reduction or similar plan shall be taken
         into account.

11.4     Minimum Contributions or Minimum Benefits in Two or More Plans. If the
         Employer maintains both a defined benefit plan and a defined
         contribution plan and either of the plans is Top-Heavy then the Minimum
         Benefit will be provided to the Participant under the defined benefit
         plan. If the Employer maintains a defined contribution plan in addition
         to this Plan, and either of the plans is Top-Heavy, then the Minimum
         Benefit will be provided to the Participant not under this Plan but
         under the other defined contribution plan.

11.5     Aggregate Limit on Contributions and Benefits for Key Employees. If any
         Participant is a Key Employee and is, or was, covered under both a
         defined benefit plan and a defined contribution plan which are both
         included in a Top-Heavy Group of the Employer, then for any Plan Year
         in which the Plans are Top-Heavy beginning before January 1, 2000, the
         number "1.0" shall be substituted for "1.25" in each place where it
         appears in Section 5.3, unless the Additional Minimum Contribution is
         being made pursuant to this Section 11.5.

         Notwithstanding the above paragraph, if the Plan is Top-Heavy, but is
         not Super Top-Heavy, Section 5.3 without modification, shall continue
         to govern the overall limitations on contributions and benefits for Key
         Employees if an Additional Minimum Benefit or an Additional Minimum
         Contribution equal to seven and one-half (7-1/2%) percent shall be
         received by each Participant who is a Non-Key Employee in any one
         qualified plan maintained by the Employer. However, for any Plan Year
         in which this Plan is a Super Top-

                                       33
<PAGE>

         Heavy Plan beginning before January 1, 2000, 1.0 shall be substituted
         for 1.25 in any event, where it appears in Section 5.3.

11.6     Miscellaneous Total Compensation Provisions. For any Plan Year in which
         a Plan is Top-Heavy, the annual Total Compensation of each Participant
         which may be taken into account for the purpose of determining Employer
         contributions or benefits under the Plan, including the computation of
         the contribution rate for Key Employees in Section 11.3, shall not
         exceed $200,000, or such other amount as may be determined by the
         Secretary of the Treasury in accordance with Section 415(d) of the
         Internal Revenue Code and the regulations promulgated thereunder, for
         Plan Years ending on or after January 1, 1988. Notwithstanding this
         limitation, benefits attributable to annual Total Compensation while
         the Plan was not Top-Heavy shall not be reduced.

11.7     Top-Heavy Definitions

11.7.1   "Additional Minimum Benefit" means the Minimum Benefit described in
         Section 11.4; however, in determining the applicable percentage in
         Section 11.4, "three (3%) percent" shall be substituted for "two (2%)
         percent" and "twenty (20%) percent" shall be increased by 1 percentage
         point for each year for which the Plan is Top-Heavy, up to a maximum of
         thirty (30%) percent.

11.7.2   "Additional Minimum Contribution" means the Minimum Contribution
         described in Section 11.3; however, in determining the Minimum
         Contribution "four (4%) percent" shall be substituted for "three (3%)
         percent" wherever it appears throughout Section 11.3.

11.7.3   "Aggregation Group" means one of the following:

         (a)     Required Aggregation Group:

                 "Required Aggregation Group" means a group that consists of (a)
                 this Plan; (b) any other qualified plans currently maintained
                 (or previously maintained and terminated within the five year
                 period ending on the Determination Date) by the Employer and
                 any Affiliates that cover Key Employees; and (c) any other
                 qualified plans currently maintained (or previously maintained
                 and terminated within the five year period ending on the
                 Determination Date) by the Employer and any Affiliates that
                 cover Key Employees that are required to be aggregated for
                 purposes of satisfying the requirements of sections 401(a)(4)
                 or 410(b) of the Code.

         (b)     Permissive Aggregation Group:

                 "Permissive Aggregation Group" means each Plan in the Required
                 Aggregation Group and any Plan the Employer elects to place
                 into the Aggregation Group, if this expanded group continues to
                 satisfy the requirements of Sections 401(a)(4) and 410 of the
                 Internal Revenue Code.

                                       34
<PAGE>

11.7.4   "Annual Retirement Benefit" means a benefit payable annually in the
         form of a single life annuity with no ancillary benefits and beginning
         at the Normal Retirement Age under the Plan.

11.7.5   "Total Compensation" under Section 11 shall be determined under Section
         5.2 of the Plan, without regard to Sections 125, 402(a)(8), and
         402(h)(1)(B) of the Code, and the case of employer contributions made
         pursuant to a salary reduction agreement, without regard to Section
         403(b) of the Code.

11.7.6   "Determination Date" for any Plan Year means either (i) the last day of
         the preceding Plan Year, or (ii) in the case of the first Plan Year of
         any Plan, the last day of such Plan Year.

11.7.7   "Key Employee" means any Employee, former Employee, or the Beneficiary
         of such Employee, who at any time during the current Plan Year or, for
         Plan Years ending before January 1, 2002, during any of the four
         preceding Plan Years, is described in one or more of the following
         three categories:

         (a)     For Plan Years ending before January 1, 2002, an Officer of the
                 Employer who receives from such Employer an annual Total
                 Compensation which exceeds fifty percent (50%) of the maximum
                 dollar limitation under Section 415(b)(1)(A) of the Code, as in
                 effect for the calendar year in which the Determination Date
                 falls, or, for Plan Years beginning after December 31, 2001, an
                 Officer of the Employer having an annual Total Compensation
                 greater than $130,000 or such higher amount as may be
                 prescribed under section 416(i) of the Code. The maximum number
                 of Employees required to be treated as Key Employees for the
                 Plan Year by reason of being Officers is the greater of 3
                 Employees or ten (10%) percent of the number of Employees of
                 the Employer, but such number shall not exceed 50 Employees. If
                 the number of Employees who are Officers of the Employer exceed
                 the maximum number required to be counted as Key Employees, the
                 Officers to be considered as Key Employees are those with the
                 highest annual Total Compensation from the Employer.

         (b)     For Plan Years ending before January 1, 2002, one of the
                 Employees owning or considered as owning within the meaning of
                 Section 318 of the Internal Revenue Code, as modified by
                 Section 416(i)(1)(B)(iii) of the Code, the largest interests in
                 the Company, unless such Employee receives Total Compensation
                 from the Employer which is less than $30,000 per year, or the
                 maximum dollar limitation under Section 415(c)(1)(A) of the
                 Code, as in effect for the calendar year which the
                 Determination Date falls. An Employee who has some ownership
                 interest in the Company is considered to be one of the top ten
                 owners unless at least ten (10) other Employees own a greater
                 interest than such Employee. If more than one Employee has the
                 same interest in the Company, the Employee having the greater
                 annual Total Compensation from the Employer shall be treated as
                 having a larger interest in the Company.

                                       35
<PAGE>

         (c)     A Percentage Owner of the Company. A "percentage owner" means
                 any person who owns, or is considered as owning within the
                 meaning of Section 318, as modified by Section
                 416(i)(1)(B)(iii) of the Internal Revenue Code, either

                 (1)    more than five (5%) percent of the outstanding stock of
                        the Company or stock possessing more than five (5%)
                        percent of the total combined voting power of all stock
                        of the Company; or

                 (2)    more than one (1%) percent of the outstanding stock of
                        the Company or stock possessing more than one (1%)
                        percent of the total combined voting power of all stock
                        of the Company, if such person has an annual Total
                        Compensation from the Employer of more than $150,000.

                 If a person is considered during a Plan Year to be a Key
                 Employee under two or more categories, due to his status other
                 than as a Beneficiary, the present value of his accrued benefit
                 or the sum of his account balance is counted only once during
                 the Plan Year in testing whether the Plan is Top-Heavy. If a
                 person is considered during the Plan Year to be a Key Employee
                 because the person is both a Beneficiary and owner of the
                 Company, then the present value of the person's inherited
                 account balance and the present value of the person's accrued
                 benefit or the sum of his account balance as an Employee or
                 owner will be counted as the total accrued benefit or account
                 balance of the individual as a Key Employee in determining
                 whether the Plan is Top-Heavy. The determination of an
                 individual's status as a Key Employee is based on the Plan Year
                 containing the Determination Date.

11.7.8   "Minimum Benefit" means the benefit described in Section 11.4.

11.7.9   "Minimum Contribution" means the contribution described in Section
         11.3.

11.7.10  "Non-Key Employee" means an Employee who is not a Key Employee or is
         the Beneficiary of such Employee.

11.7.11  "Rollover Contributions and Similar Transfers" means the following:

         (a)     Related rollover contributions or similar transfers are those

                 (i)    not initiated by the Employee;

                 (ii)   made on or before December 31, 1983; or

                 (iii)  made to a plan maintained by the same Employer, such as
                        in a merger or consolidation of two or more plans or the
                        division of a single plan into two or more plans.

         (b)     Unrelated rollover contributions or similar transfers are those
                 which are both

                                       36
<PAGE>

                 (i)    initiated by the Employee; and

                 (ii)   made after December 31, 1983; and

                 (iii)  made from a plan maintained by one Employer to a plan
                        maintained by another Employer.

11.7.12  "Super Top-Heavy" means a Plan which would be Top-Heavy if "ninety
         (90%) percent" were substituted for "sixty (60%) percent" in each place
         it appears in Section 11.7.16.

11.7.13  "Top-Heavy" means a qualified Plan which is a Top-Heavy Plan pursuant
         to the provisions of Section 11.7.16.

11.7.14  "Top-Heavy Group" means an Aggregation Group in which, as of the
         Determination Date, the sum of the present value of the accumulated
         accrued benefits for Participants who are Key Employees under all
         defined benefit plans included in such Aggregation Group and the sum of
         the account balances for Participants who are Key Employees under all
         defined contribution plans included in such Aggregation Group exceeds
         sixty (60%) percent of a similar sum determined for all Employees,
         including their Beneficiaries, who are participating under all Plans
         included in the Aggregation Group.

11.7.15  "Top-Heavy Vesting Schedule" means the vesting schedule set forth in
         Section 11.2(d).

11.7.16  "Top-Heavy Plan" means a Plan for a Plan Year in which, as of the
         Determination Date:

         (a)     The sum of the account balances of Participants in the Plan who
                 are Key Employees for the Plan Year exceeds sixty (60%) percent
                 of the sum of the account balances under the Plan for all
                 Employees, including their Beneficiaries participating under
                 the Plan, and this Plan is not part of any Aggregation Group;
                 or

         (b)     Plan is part of a Top-Heavy Group and is included in the
                 Required Aggregation Group. Notwithstanding the preceding
                 sentence, collectively-bargained plans are not subject to the
                 rules of Section 11. December 31, 1983 shall not be taken into
                 account under the Plan for purposes of computing the Top-Heavy
                 status of the Plan or group of Plans, except to the extent
                 provided in regulations.

11.7.17  Determination of Top-Heavy Status. In making the determination of the
         Top-Heavy status of a Plan or group of Plans, the accrued benefits or
         account balances derived from Employer and Employee contributions are
         taken into account, but accumulated deductible Employee contributions
         are disregarded. Also, the determination of the present value of the
         accumulated accrued benefits and the account balances of a Key Employee
         or Non-Key Employee participating in the plans includes such amounts
         distributed to the Employee or to the Beneficiary of such Employee
         during the Plan Year that includes the Determination Date and, for Plan
         Years ending before January 1, 2002, the preceding four Plan Years,
         even if such distribution occurred before the effective date of Section
         416 of the Code. The preceding amount also includes distributions under
         a plan which has been terminated

                                       37
<PAGE>

         which, if it had not been terminated, would have been included in a
         Required Aggregation Group. An Unrelated rollover contribution or
         similar transfer accepted by the Plan after December 31, 1983 shall not
         be taken into account under the Plan for purposes of computing the
         Top-Heavy status of the Plan or group of Plans, except to the extent
         provided in regulations.

         If any individual ceases to be a Key Employee with respect to any Plan
         for any Plan Year, but such individual was a Key Employee with respect
         to such Plan for any prior Plan Year, any accrued benefit or account
         balance of such Employee shall not be taken into account in determining
         whether the Plan or group of Plans is Top-Heavy for any Plan Year
         following the last Plan Year in which such Employee was treated as a
         Key Employee. For Plan Years beginning after December 31, 1984, if any
         individual has not performed any service during the Plan Year that
         includes the Determination Date and, for Plan Years ending before
         January 1, 2002, the preceding four Plan Years for the Employer, other
         than benefits under this Plan, then any accrued benefit or account
         balance of such individual shall not be taken into account in
         determining whether the Plan or group of Plans is Top- Heavy for the
         Plan Year.

         When aggregating two or more Plans in accordance with Section 416(g)(2)
         of the Code, or as it may be amended, the present value of the accrued
         benefits or account balances will be determined separately for each
         plan as of such Plan's Determination Date. These Plans will then be
         aggregated by adding together the results for each Plan as of the
         Determination Dates that fall within the same calendar year.

         The present value of the account balance of any Plan Participant as of
         the Determination Date is the sum of (a) the Participant's account
         balance as of the most recent valuation date occurring within a
         12-month period ending on the Determination Date, and (b) an adjustment
         for the amount of any Employer contribution actually made on behalf of
         the Participant after the valuation date, but on or before the
         Determination Date. Notwithstanding the above, in the first Plan Year,
         the adjustment set forth in paragraph (b) shall include the amount of
         any Employer contribution made after the Determination Date if such
         contributions are allocated to a Participant's Employer contribution
         Account during the first Plan Year.

                                   SECTION 12

                           Administration of the Plan

12.1     Administrative Committee. The Plan shall be administered by the
         Committee which shall be responsible for carrying out the provisions of
         the Plan, and which shall be the Plan Administrator and Named Fiduciary
         as these terms are defined under ERISA. The Committee shall consist of
         at least two (2) members who shall be appointed from time to time by
         the Board of Directors. Vacancies on the Committee shall be filled in
         the same manner as appointment. The Employer shall act as the Committee
         at any time during which no committee is appointed or duly constituted
         hereunder.

                                       38
<PAGE>

         Each person appointed a member of the Committee shall signify his
         acceptance by filing a written acceptance with the Board of Directors.
         Any member of the Committee may be removed by his own accord by
         delivering his written resignation to the Board of Directors and to the
         Secretary of the Committee.

12.2     Chairman; Subcommittees. The members of the Committee shall elect from
         their number a Chairman and shall appoint a Secretary, who need not be
         a member of the Committee. They may appoint from their number such
         subcommittees with such power as they shall determine, may authorize
         one or more of their number or any agent to execute or deliver any
         instrument or make any payment in their behalf, and may employ such
         clerks, counsel, accounts and actuaries as may be required in carrying
         out the provisions of the Plan.

12.3     Meetings. The Committee shall hold meetings upon such notice, at such
         time, and at such place as it may determine.

12.4     Action. A majority of the members of the Committee at the time in
         office shall constitute a quorum for the transaction of business. All
         resolutions or other actions taken by the Committee shall be by vote of
         a majority of those present at a meeting, but not less than two, or in
         writing by all the members at the time in office, if they act without a
         meeting.

12.5     Compensation. No member of the Committee, who is also an Employee,
         shall receive any compensation for his service as such, but the
         Employer may reimburse any member for reasonable and necessary expenses
         incurred.

12.6     Administrative Rulemaking. The Committee shall from time to time
         establish rules for the administration of the Plan and the transaction
         of its business. Except as herein otherwise expressly provided, the
         Committee shall have the exclusive right to interpret the Plan and to
         decide any matters arising thereunder in connection with the
         administration of the Plan. It shall endeavor to act by general rules
         so as not to discriminate in favor of any person. Its decision and the
         records of the Committee shall be conclusive and binding upon the
         Employer, Participants, and all other persons having any interest under
         the Plan.

12.7     Plan Records. The Committee shall maintain accounts showing the fiscal
         transactions of the Plan, and in connection therewith shall require the
         Trustees to submit any necessary reports, and shall keep in convenient
         form such data as may be necessary for the determination of the assets
         and liabilities of the Plan. The Committee shall prepare, annually, a
         report showing in reasonable detail the assets and liabilities of the
         Plan and giving a brief account of the operation of the Plan for the
         past year. Such report shall be submitted to the Board of Directors and
         shall be filed in the Office of the Secretary of the Committee where it
         shall be open to inspection by any Participant of the Plan.

12.8     Reliance on Advice From Professionals. The members of the Committee and
         the officers and directors of the Employer shall be entitled to rely
         upon all certificates and reports made by any duly appointed legal
         counsel. The members of the Committee and the officers and directors of
         the Employer shall be fully protected against any action taken in good
         faith in

                                       39
<PAGE>

         reliance upon any such certificates, reports or opinions. All actions
         so taken shall be conclusive upon each of them and upon all persons
         having any interest under the Plan. Each member of the Committee shall
         be indemnified by the Employer against any and all claims, loss,
         damages, expense and liability to which he may be a party by reason of
         his membership in the Committee, except in relation to matters as to
         which he shall be adjudged in such action to be liable for gross
         negligence or willful misconduct in the performance of his duty as such
         member. The foregoing right of indemnification shall be in addition to
         any other rights to which any such member may be entitled as a matter
         of law.

12.9     Claims. Claims for benefits under the Plan shall be filed, on the forms
         supplied by the Committee. Written notice of the disposition of a claim
         shall be furnished the claimant within thirty (30) days after the
         application therefor is filed. In the event the claim is denied, the
         reasons for the denial shall be cited and, where appropriate, an
         explanation as to how the claimant can perfect the claim will be
         provided.

12.10    Appeals. Any Employee, former Employee, or beneficiary of either, who
         has been denied a benefit, or feels aggrieved by any other action of
         the Employer, Committee or the Trustee, shall be entitled, upon request
         to the Committee and if he has not already done so, to receive a
         written notice of such action, together with a full and clear statement
         of the reasons for the action. If the claimant wishes further
         consideration of his position, he may obtain a form from the Committee
         on which to request a hearing. Such form, together with a written
         statement of the claimant's position, shall be filed with the Committee
         no later than ninety (90) days after receipt of the written
         notification provided for above or in Section 12.10. The Committee
         shall schedule an opportunity for a full and fair hearing of the issue
         within the next thirty (30) days. The decision following such hearing
         shall be made within thirty (30) days and shall be communicated in
         writing to the claimant.

12.11    Fiduciary Action. Any action taken or omitted by any fiduciary with
         respect to the Plan, including any decision, interpretation, claim
         denial or review on appeal, shall be conclusive and binding on all
         interested parties and shall be subject to judicial modification or
         reversal only to the extent it is determined by a court of competent
         jurisdiction that such action or omission was arbitrary and capricious
         and contrary to the terms of the Plan.

                                   SECTION 13

                    Management and Investment of Trust Assets

13.1     Exclusive Benefit Rule. All assets for providing the benefits of the
         Plan shall be held as a trust for the exclusive benefit of Participants
         and beneficiaries under the Plan, and no part of the corpus or income
         shall be used for, or diverted to, purposes other than for the
         exclusive benefit of Participants and beneficiaries under the Plan. No
         Participant or beneficiary under the Plan, nor any other person, shall
         have any interest in or right to any part of the earnings of the Trust,
         or any rights in, to or under the Trust or any part of its assets,
         except to the extent expressly provided in the Plan.

                                       40
<PAGE>

13.2     Investment Control. All contributions to the Plan by either the
         Participants or the Employer shall be committed in trust to the
         Trustees. The Trustees shall be appointed from time to time by the
         Board of Directors by appropriate instrument, with such powers in the
         Trustees as to investment, re-investment control and disbursement of
         the funds as the Board of Directors shall approve and as shall be in
         accordance with the Plan. The Board of Directors may remove any Trustee
         at any time, upon reasonable notice, and upon such removal or upon the
         resignation of any Trustee, the Board of Directors shall designate a
         successor Trustee.

13.3     Investment in Qualifying Employer Securities. Trust Assets under the
         Plan will be invested primarily in Qualifying Employer Securities, as
         provided in the Trust Agreement. Trust Assets may be used to purchase
         shares of Qualifying Employer Securities from Company shareholders or
         from the Company. The Trustee may also invest Trust Assets in savings
         accounts, certificates of deposit, high-grade short-term securities,
         equity stocks, bonds, or other investments, or Trust Assets may be held
         in cash. All investments of Trust Assets shall be made by the Trustee
         only upon the direction of the Committee, and all purchases of
         Qualified Employer Securities by the Trustee shall be made at prices
         which do not exceed the fair market value of such shares, as determined
         in good faith by the Committee. The Committee may direct the Trustee to
         invest and hold up to 100% of the Trust Assets in Qualified Employer
         Securities. Notwithstanding anything in the Plan to the contrary, all
         determinations as to the fair market value of Qualified Employer
         Securities shall be made (i) in accordance with Treasury Regulation
         ss.54.4975-11(d)(5), (ii) by an independent appraiser, pursuant to
         Section 401(a)(28) of the Code, in the event such Qualified Employer
         Securities are not readily tradable on an established securities
         market, and (iii) as of the most recent Valuation Date, provided that
         transactions involving Participants who are "disqualified persons"
         within the meaning of Section 4975 of the Code shall be valued as of
         the transaction date.

13.4     Acquisition Loans. The Committee may direct the Trustee to incur
         Acquisition Loans from time to time to finance the acquisition of
         Qualified Employer Securities (Financed Shares) for the Trust or to
         repay a prior Acquisition Loan. An installment obligation incurred in
         connection with the purchase of Qualified Employer Securities shall
         constitute an Acquisition Loan. An Acquisition Loan shall be for a
         specific term, shall bear a reasonable rate of interest and shall not
         be payable on demand except in the event of default. An Acquisition
         Loan may be secured by a collateral pledge of the Financed Shares so
         acquired. No other Trust Assets may be pledged as collateral for an
         Acquisition Loan, and no lender shall have recourse against Trust
         Assets other than any Financed Shares remaining subject to pledge. Any
         pledge of Financed Shares must provide for the release of shares so
         pledged on pro-rata basis as principal and interest on the Acquisition
         Loan are repaid by the Trustee and such Financed Shares are allocated
         to Participants' Company Stock Accounts (as provided in Section 6).
         Repayments of principal and interest on any Acquisition Loan shall be
         made by the Trustee (as directed by the Committee) only from Employer
         contributions paid in cash to enable the Trustee to repay such Loan,
         forfeitures from Participant accounts, from earnings attributable to
         such Employer contributions and from cash dividends received by the
         trust. The payments made with respect to an Acquisition Loan by the
         Trust during a Plan Year shall not exceed an amount equal to the sum of
         such contributions and

                                       41
<PAGE>

         earnings received during or prior to the Plan Year less such payments
         in prior years. Such contributions and earnings must be accounted for
         separately in the books of accounts of the Trust until the Acquisition
         Loan is repaid. The proceeds of an Acquisition Loan shall be used
         within a reasonable time after receipt by the Trust to purchase Common
         Stock. Further, all income earned with respect to Unallocated Company
         Stock shall be used at the discretion of the Committee to repay the
         Acquisition Loan used to purchase such Company Stock. Any income not so
         used shall be allocated as income of the Plan.

         Should the Employer contributions, earnings attributable to such
         Employer contributions and cash dividends received by the Trust on
         Financed Shares be insufficient to meet the obligations created by the
         Acquisition Loan, then the Trustee shall so advise the Committee. The
         Committee may recommend certain actions including but not limited to,
         refinancing the original Loan, amendment of the original Loan
         Agreement, or the entering into of an additional Acquisition Loan to
         repay a prior Acquisition Loan.

13.5     Disbursements. The Committee shall determine the manner in which the
         funds of the Plan shall be disbursed in accordance with the Plan and
         provisions of the trust instrument, including the form of voucher or
         warrant to be used in making disbursements and the qualifications of
         persons authorized to approve and sign the same and any other matters
         incident to the disbursements of such funds.

13.6     Voting of Company Stock. Pursuant to Section 409(e) of the Code, all
         "Registration-Type" Company Stock allocated to a Participant Account
         shall be voted by the Trustee in accordance with the instructions of
         the Participant. If the Company Stock is not a registration-type class
         of securities pursuant to Section 409(e) of the Code, then Participants
         are entitled to direct the Trustee concerning voting allocated stock
         with respect to any corporate matter which involves the approval or
         disapproval of any corporate merger, consolidation, recapitalization,
         reclassification, liquidation, dissolution, sale of substantially all
         assets or similar transaction. The Committee shall direct the voting of
         such stock in all other matters.

         Company Stock which has not yet been allocated and allocated stock for
         which no voting direction has been received by Participants in a timely
         manner shall be voted by the Trustee in the same proportion as
         Participants vote allocated stock; provided that, in the absence of any
         voting directions as to allocated stock, (i) the Company's Board of
         Directors shall direct the Trustee as to the voting of all shares of
         unallocated stock, (ii) and in the absence of such direction from the
         Company's Board of Directors, the Trustee shall have sole discretion as
         to the voting of such shares.

13.7     Dividends. Dividends paid with respect to Qualifying Employer
         Securities held by the Trust shall be applied as follows:

         (a)     The dividends paid with respect to shares which are both
                 purchased with the proceeds of an Acquisition Loan and
                 allocated to the accounts of Participants at the direction of
                 the Plan Committee shall be either (1) paid in cash directly to
                 such Participants or their Beneficiaries, or (2) if paid into
                 the plan, distributed in cash

                                       42
<PAGE>

                 to Participants or their Beneficiaries not later than 90 days
                 after the close of Plan Year in which paid, or (3) if permitted
                 by Section 404(k) of the Code, paid into the Plan and used to
                 repay the Acquisition Loan, with shares released thereby
                 allocated to such Participants in an amount proportional to
                 such dividends for the year for which such dividends would have
                 been allocated to such Participants, or (4) in the case of
                 dividends received after December 31, 2001, to the extent
                 permitted by the Plan Committee and if elected by a Participant
                 or Beneficiary, retained in the Trust Fund and invested in
                 additional Shares; provided, however, that the fair market
                 value of said shares is not less than the amount of such
                 dividend that the Participant would have otherwise received;
                 and

         (b)     The dividends paid with respect to unallocated shares shall be
                 used to repay the Acquisition Loan.

                 To the extent so applied in either (a) or (b) above, the
                 dividends so paid shall be deductible to the Employer (as
                 permitted under Section 404(k) of the Code) in the taxable year
                 of the Employer in which the dividend is paid or distributed to
                 Participants, or applied to repay the Acquisition Loan.

                                   SECTION 14

                           Obligations of the Employer

14.1     Limited Liability. The Employer shall have no liability in respect to
         payments or benefits or otherwise under the Plan, and the Employer
         shall have no liability in respect to the administration of the Trust
         or of the funds, securities or other assets paid over to the Trustees,
         and each Participant, each contingent Participant, and each beneficiary
         shall look solely to such Trust Fund for any payments or benefits under
         the Plan.

                                   SECTION 15

                                  Miscellaneous

15.1     No Assignment Etc. No benefit payable under the Plan shall be subject
         in any manner to anticipation, alienation, sale, transfer, assignment,
         pledge, encumbrance, or charge and any action by way of anticipating,
         alienating, selling, transferring, assigning, pledging, encumbering, or
         charging the same shall be void and of no effect; nor shall any benefit
         be in any manner liable for or subject to the debts, contracts,
         liabilities, engagements, or torts of the person entitled to such
         benefit, except as specifically provided in the Plan.

15.2     Non-alienation. No benefits under this Plan shall be in any manner
         anticipated, alienated, sold, transferred, assigned, pledged,
         encumbered or charged, and any attempt to so anticipate, alienate,
         sell, transfer, assign, pledge, encumber or charge the same shall be
         void; nor shall any such benefits in any manner be liable for or
         subject to the debts, contracts, liabilities or engagements of the
         person entitled to such benefits as herein provided for him. The
         preceding sentence shall also apply to the creation, assignment or

                                       43
<PAGE>

         recognition of right to any benefit payable with respect to a
         Participant pursuant to a Domestic Relations Order, unless such order
         is determined, by the Committee in its sole and absolute discretion, to
         be a Qualified Domestic Relations Order.

15.3     Procedures Involving Domestic Relations Orders. Upon receiving a
         Domestic Relations Order, the Plan Administrator shall segregate in a
         separate account or in an escrow account or separately account for the
         amounts payable to any person pursuant to such Domestic Relations
         Order, pending a determination whether such Domestic Relations Order
         constitutes a Qualified Domestic Relations Order, and shall give notice
         of the receipt of the Domestic Relations Order to the Participant or
         Former Participant and each other person affected thereby. If, within
         18 months after receipt of such Domestic Relations Order, the Plan
         Administrator, a court of competent jurisdiction or another appropriate
         authority determines that such Domestic Relations Order constitutes a
         Qualified Domestic Relations Order, the Plan Administrator shall direct
         the Trustee to pay the segregated amounts (plus any interest thereon)
         to the person or persons entitled thereto under the Qualified Domestic
         Relations Order. If it is determined that the Domestic Relations Order
         is not a Qualified Domestic Relations Order or if no determination is
         made within the prescribed 18-month period, the segregated amounts
         shall be distributed as though the Domestic Relations Order had not
         been received, and any later determination that such Domestic Relations
         Order constitutes a Qualified Domestic Relations Order shall be applied
         only with respect to benefits that remain undistributed on the date of
         such determination. The Plan Administrator shall be authorized to
         establish such reasonable administrative procedures as he deems
         necessary or appropriate to administer this Section 15.3. This Section
         15.3 shall be construed and administered so as to comply with the
         requirements of section 401(a)(13) of the Code.

15.4     Offset. Notwithstanding anything in the Plan to the contrary, a
         Participant's, Former Participant's or Beneficiary's Accounts under the
         Plan may be offset by any amount such Participant, Former Participant
         or Beneficiary is required or ordered to pay to the Plan if:

                 (a)    the order or requirement to pay arises: (i) under a
                        judgment issued on or after August 5, 1997 of conviction
                        for a crime involving the Plan; (ii) under a civil
                        judgment (including a consent order or decree) entered
                        by a court on or after August 5, 1997 in an action
                        brought in connection with a violation (or alleged
                        violation) of part 4 of subtitle B of title I of ERISA;
                        or (iii) pursuant to a settlement agreement entered into
                        on or after August 5, 1997 between the Participant,
                        Former Participant or Beneficiary and one or both of the
                        United States Department of Labor and the Pension
                        Benefit Guaranty Corporation in connection with a
                        violation (or alleged violation) of part 4 of subtitle B
                        of title I of ERISA by a fiduciary or any other person;
                        and

                 (b)    the judgment, order, decree or settlement agreement
                        expressly provides for the offset of all or part of the
                        amount ordered or required to be paid to the Plan
                        against the Participant's, Former Participant's or
                        Beneficiary's benefits under the Plan.

                                       44
<PAGE>

15.5     No Employment Rights. The establishment of the Plan shall not be
         construed as conferring any rights upon any Employee or any person for
         a continuation of employment, and shall not be construed as limiting in
         any way the right of the Employer to discharge any Employee or to treat
         without regard to the effect which such treatment might have upon him
         as a Participant in the Plan.

15.6     Incompetence of Beneficiary. If any person entitled to receive any
         benefits from the Trust Fund is, in the judgment of the Committee,
         legally, physically, or mentally incapable of personally receiving and
         receipting for any distribution, the Committee may instruct the
         Trustees to make distribution to such other person, persons or
         institutions as, in the judgment of the Committee are then maintaining
         or have custody of such distributee.

15.7     Conclusiveness of Committee Decisions. The determination of the
         Committee as to the identity of the proper payee of any benefit under
         the Plan and the amount of such benefit properly payable shall be
         conclusive, and payment in accordance with such determination shall
         constitute a complete discharge of all obligations on account of such
         benefit.

15.8     Inability to Locate Beneficiary. In the event an amount is payable from
         the Trust Fund to a beneficiary or the executor or administrator of any
         deceased Participant and if, after written notice from the Trustees
         mailed to such person's last known address as certified to the Trustees
         by the Committee, such person or such executor or administrator shall
         not have presented himself to the Trustees within six (6) years after
         the mailing of such notice, the Trustees shall notify the Committee and
         the Committee shall instruct the Trustees to distribute such amount due
         to such beneficiary or such executor or administrator among one or more
         of the spouse and blood relatives of such deceased person, designated
         by the Committee.

15.9     Mergers, Etc. In the case of any merger, consolidation with or transfer
         of assets or liabilities to any other plan, each Participant in the
         Plan shall, (if the plan is terminated), receive a benefit under this
         Plan immediately after the merger, consolidation or transfer, which is
         equal to or greater than the benefit under this Plan he would have been
         entitled to receive immediately before the merger, consolidation or
         transfer if the plan had been terminated.

                                   SECTION 16

                                   Amendments

16.1     Amendments. The Company reserves the right at any time, and from time
         to time, by action of its Board of Directors, to modify or amend in
         whole or in part any or all of the provisions of the Plan. This right
         of the Company is subject to the conditions:

         (a)     that no modification or amendment may be made which will
                 adversely affect the existing account balances or optional
                 forms of benefits of any Participant or beneficiary; and

                                       45
<PAGE>

         (b)     that no part of the assets of the Plan shall, by reason of any
                 modification or amendment, be used for or diverted to, purposes
                 other than for the exclusive benefit of Participants and
                 beneficiaries under the Plan.

16.2     ESOP Status. If the Company amends this Plan to no longer primarily
         invest in Qualifying Employer Securities, thus ceasing to be an ESOP,
         Section 17.2 will apply.

16.3     Vesting Rule. In the event that the vesting schedule of this Plan is
         amended, any Participant who has completed at least three (3) Years of
         Service may elect to have his vested interest determined without regard
         to such amendment by notifying the Plan Administrator in writing during
         the election period as hereinafter defined. The election period shall
         begin on the date such amendment is adopted and shall end no earlier
         than the latest of the following dates:

         (a)     The date which is sixty (60) days after the day the amendment
                 is adopted;

         (b)     The date which is sixty (60) days after the day the amendment
                 becomes effective; or

         (c)     The date which is sixty (60) days after the day the Participant
                 is issued written notice of the amendment by the Employer or
                 Plan Administrator.

         Such election shall be available only to an individual who is a
         Participant at the time such election is made and such election shall
         be irrevocable.

         If the Plan is amended pursuant to this Section and an Employee is a
         Participant as of the later of the date the amendment is adopted or the
         date the amendment becomes effective, then the nonforfeitable
         percentage of the Participant's Account shall not be less than such
         percentage when determined under the Plan without regard to the
         amendment.

                                   SECTION 17

                 Suspension, Discontinuance and Plan Termination

17.1     Permanence. The Employer intends this Plan to be permanent and to
         qualify under Section 401 of the Internal Revenue Code of 1986, as that
         statute may from time to time be amended or supplemented. However, the
         Plan may be discontinued by the Board of Directors, but only upon
         condition that such action is taken under the Trust Agreement
         established under the Plan and as such shall render it impossible for
         any part of the corpus of the Trust or income thereon to be at any time
         used for, or diverted to, purposes other than for the exclusive benefit
         of Participants and beneficiaries. Upon termination, partial
         termination, or upon complete discontinuance of contributions all
         affected Participants' Accounts shall be considered as fully vested and
         non-forfeitable and all unallocated assets of the Trust, including but
         not limited to Employer contributions and unallocated Trust assets and
         earnings thereon, shall be allocated to the accounts of all
         Participants as of the next Valuation Date (or if the Plan is being
         terminated immediately, then on the date of such Plan termination as if
         it were the next Valuation Date) in accordance with the

                                       46
<PAGE>

         provisions of the Plan hereof, and shall be applied for the benefit of
         each such Participant either by a lump-sum distribution, or by the
         continuance of the Trust and the payments of benefits thereunder in the
         manner provided in the Plan. After initial qualification by the
         Internal Revenue Service, there will be no reversion of assets to the
         Employer under any circumstances. All Participants shall be treated in
         a uniform and nondiscriminatory manner.

17.2     Cessation of ESOP Status. If this Plan ceases to be an ESOP, the
         proceeds of an Acquisition Loan will be used within a reasonable time
         after receipt by the Plan either to acquire Qualifying Employer
         Securities or to repay the loan or a prior Acquisition Loan. Even if
         the Plan ceases as an ESOP, any Qualifying Employer Security acquired
         with the proceeds of an Acquisition Loan will be subject to a put
         option if the Company Stock is not publicly traded when distributed, or
         if the Company Stock is subject to a trading limitation when
         distributed. The put option must be exercisable at least during a
         15-month period which begins on the date the Company Stock is subject
         to the put option is distributed by the Plan. The price at which the
         put option will be exercisable will be the value of the Company Stock
         as of the date of exercise or as of the most recent Valuation Date. If
         the transaction takes place between the Plan and a disqualified person,
         value will be determined as of the date of the transaction.

17.3     Cash Merger or Sale of the Company. Notwithstanding anything herein to
         the contrary, in the event that the Company or all of the Company's
         outstanding Company Stock shall be acquired for cash through merger or
         sale by an unrelated third party, then the Plan shall automatically be
         terminated without further action or notice effective on the date of
         such sale or merger; all Participant Accounts shall be considered fully
         vested and non-forfeitable as of such date of termination; all Employer
         contributions, dividends on Company Stock and earnings on Participant
         Account assets paid to the Trust or earned by the Trust since the most
         recent Valuation Date shall be allocated to the accounts of all
         Participants as of the date of termination of the Plan as if it were
         the next Valuation Date in accordance with the provisions of the Plan;
         and all funds realized by the Trust with respect to any Financed Shares
         remaining as collateral on any Acquisition Loans which shall be
         exchanged for cash in such merger or sale after repayment of all
         Acquisition Loans shall have been made shall be allocated to the
         accounts of all Participants pro rata based on the total value of
         assets allocated to each Participant's Account as a percentage of the
         total value of assets allocated to all Participant Accounts and held in
         the Trust as of the date of termination of the Plan. Upon such
         termination of the Plan and completion of the final accounting and
         allocation of the Trust assets, all such Participant Accounts which
         shall account for all Trust assets shall be distributed in a lump-sum
         to each Participant as soon as administratively feasible.

                                   SECTION 18

                          Inclusion of Other Companies

18.1     Joinder Generally. Any company which is or becomes a subsidiary,
         Affiliate or associated company of the Employer, may, with the approval
         of the Board of Directors of the Company, adopt this Plan with respect
         to its Employees.

                                       47
<PAGE>

18.2     Joinder -- Terms and Conditions. With respect to the Employees of any
         such subsidiary, Affiliate or associated companies which may become
         included in the Plan, the Board of Directors of the Company shall
         determine the extent, if any, to which the period of prior employment
         therewith or with any predecessors thereof shall be recognized as
         service for the purposes of this Plan.

                                       48

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