Document:

SOUND FEDERAL SAVINGS

                         2005 DIRECTOR DEFERRED FEE PLAN

                             White Plains, New York

                                 January 1, 2005

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                              SOUND FEDERAL SAVINGS
                         2005 DIRECTOR DEFERRED FEE PLAN

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

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

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

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

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

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

                                    ARTICLE I

                                     PURPOSE

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

                                   ARTICLE II

                                   DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                   ARTICLE III

                     PARTICIPATION AND DEFERRAL COMMITMENTS

     3.1 Eligibility and Participation.

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

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

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

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

                                   ARTICLE IV

                         DEFERRED COMPENSATION ACCOUNTS

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

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

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

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

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

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

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

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

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

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

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

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

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

                                    ARTICLE V

                                  PLAN BENEFITS

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

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

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

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

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

     5.4 Form of Benefit Payment.

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

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

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

     5.5 Commencement of Payments.

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

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

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

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

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

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

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

                                   ARTICLE VI

                               EARLY DISTRIBUTIONS

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

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

                                   ARTICLE VII

                                 ADMINISTRATION

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

                                       10
<Page>

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

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

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

                                  ARTICLE VIII

                                CLAIMS PROCEDURE

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

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

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

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

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

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

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

                                       11

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

                                   ARTICLE IX

                        AMENDMENT AND TERMINATION OF PLAN

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

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

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

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

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

                                       12
<Page>

                                    ARTICLE X

                                  MISCELLANEOUS

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

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

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

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

                                       13
<Page>

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

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

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

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

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

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

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

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

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

                                       14
<Page>

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

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

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

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

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

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

                                       15
<Page>

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

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

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

                                       16
<PAGE>

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

ATTEST:                                              SOUND FEDERAL SAVINGS

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

                                       17

<PAGE>

                                    Exhibit A

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

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

                                ELECTION TO DEFER

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

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

                          DISTRIBUTION ELECTION OPTIONS

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

         Select either (i) or (ii) below:

         (i)      Fixed Distribution Schedule at Specified Date

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

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

<Page>

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

         (ii)     Separation from Service

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

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

                           Optional Distribution Forms

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

         Disability

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

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

         Death

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

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years

<Page>

           _____  Substantially equal monthly payments over a period of 15 years

         Change in Control

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

           _____  Lump Sum Distribution

           _____  Substantially equal monthly payments over a period of 5 years

           _____  Substantially equal monthly payments over a period of 10 years

           _____  Substantially equal monthly payments over a period of 15 years

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

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

Dated this _____ day of _______________, 200__.

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

<PAGE>
                                    Exhibit B

                              SOUND FEDERAL SAVINGS
                         2005 DIRECTOR DEFERRED FEE PLAN
                             BENEFICIARY DESIGNATION

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

PRIMARY BENEFICIARY:

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

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

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

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

Name:_______________________________        % of Benefit:___________________

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

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

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

<PAGE>
                                    Exhibit C

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

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

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

         Adjust deferral as of:                               January 1st, 20__

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

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

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

                                            ACKNOWLEDGED
                                            BY:_________________________________

                                            TITLE: _____________________________

                                            ------------------------------------
                                            DATEFINANCIAL INSTITUTION EXECUTIVE'S AGREEMENT

                                    Agreement

     AGREEMENT  made this 8th day of December 2005, by and between SOUND FEDERAL
SAVINGS,  which has its principal office at 1311 Mamaroneck  Avenue,  Suite 190,
White Plains,  New York  (hereinafter  referred to as the "Bank") and RICHARD P.
McSTRAVICK (hereinafter referred to as the "Employee").  Any reference herein to
"Company" shall mean Sound Federal Bancorp, Inc., a Delaware corporation, or any
successor thereto.

                                   Witnesseth:

     WHEREAS,  the Employee is President and Chief Executive Officer of the Bank
and has  developed  an intimate and  thorough  knowledge of the Bank's  business
methods and operations; and

     WHEREAS,  the retention of the Employee's services for and on behalf of the
Bank is of material  importance to the preservation and enhancement of the value
of the Bank's business; and

     WHEREAS,  the Employee is presently employed under an employment  agreement
entered  into on December  31,  1997,  amended,  on January 20, 1999 (the "Prior
Agreement"); and

     WHEREAS,  the  Bank  and  the  Employer  desires  to  further  revise  such
employment  agreement to bring the Prior  Agreement into compliance with Section
409A of the Internal Revenue Code (the "Code").

     NOW, THEREFORE,  in consideration of the mutual covenants set forth in this
Agreement, the Bank and the Employee agree as follows:

     Section 1. Employment  Term. The Bank employs the Employee as President and
Chief Executive  Officer and the Employee  accepts this employment and agrees to
render  services  to the Bank on the  terms  and  conditions  set  forth in this
Agreement.  Commencing on January 1, 2006 (the  "Anniversary  Date" of the Prior
Agreement),  and continuing at each Anniversary  Date thereafter,  the Agreement
shall renew for an additional  year such that the remaining  term shall be three
(3) years unless  written notice is provided to Executive at least ten (10) days
and not more than sixty (60) days prior to any such  Anniversary  Date, that his
employment  shall  cease at the end of  thirty-six  (36) months  following  such
Anniversary  Date.  Prior to each notice  period for  non-renewal,  the Board of
Directors  ("Board")  of the  Bank  will  conduct  a  comprehensive  performance
evaluation  and review of the Executive for purposes of  determining  whether to
extend the Agreement,  and the results  thereof shall be included in the minutes
of the Board's meeting.

     Section 2. Duties.  The Employee shall perform  executive  services for the
Bank as may be  consistent  with the  Employee's  title,  along with those other
duties that may be assigned  from time to time by the Bank's Board of Directors.
During this Agreement's term, the Employee's full business time and best efforts
shall be devoted to the affairs  and  business  of the Bank,  as is  customarily
required for the position of President and Chief Executive Officer. The services
of the Employee shall be rendered  principally in White Plains, New York but the
Employee  shall do any  traveling  and render  services at such other present or
future offices on behalf of the Bank as may be reasonably required.

<page>

     Section  3.  Restricted   Activities.   The  Employee  agrees  that  during
employment,  except with the express  consent of the Bank's Board of  Directors,
the Employee will not, directly or indirectly,  engage or participate in, become
a director of, or render advisory or other services for, or in connection  with,
or  become  interested  in,  or  make  any  financial  investment  in any  firm,
corporation,  business  entity  or  business  enterprise  competitive  with  any
business  of the  Bank;  provided,  however,  that  the  Employee  shall  not be
precluded or prohibited from owning passive investments,  including  investments
in the securities of other financial institutions, so long as ownership does not
require the Employee to devote  substantial time to management or control of the
other business or activities in which the Employee has invested.

     Section 4. Remedies. The Employee agrees and acknowledges that by virtue of
this employment,  the Employee will obtain and maintain an intimate knowledge of
the  Bank's   activities  and  affairs,   including   trade  secrets  and  other
confidential  matters. As a result, and also because of the special,  unique and
extraordinary  services that the Employee is capable of performing  for the Bank
or one of its  competitors,  the  Employee  recognizes  that the  services to be
rendered  are of a  character  giving them a peculiar  value,  the loss of which
cannot be  adequately  or reasonably  compensated  for by damages.  The Employee
agrees that if the Employee  fails to render to the Bank the services  required,
the Bank shall be entitled to immediate  injunctive or other equitable relief to
restrain the Employee,  in addition to any other  remedies to which the Bank may
be entitled under law.

     Section 5. Compensation.  The Bank will compensate and pay the Employee for
the Employee's  services during this  Agreement's  term a minimum base salary of
Two Hundred Sixty- Five Thousand Dollars ($265,000) for the year ending December
31, 2006.  Subsequent annual salary in amounts determined by the Bank's Board of
Directors from year to year shall be memorialized by a duly executed Addendum to
be appended hereto.

     Section 6.  Vacation.  The Employee shall be entitled to a vacation of four
(4) weeks per calendar year,  arranged to coordinate with the Employee's duties.
If for any reason the Employee's  full  entitlement is not taken in any calendar
year,  the unused portion  thereof shall be lost or deemed waived.  The Employee
shall also be entitled to observe holidays on which the Bank is closed.

     Section 7.  Benefits.  The Employee shall be entitled to participate in any
Bank plan relating to pension,  profit sharing,  or other  retirement  benefits,
along with any medical,  dental,  and life insurance  coverage or  reimbursement
plans that the Bank may adopt for its employees. The Employee shall be permitted
to participate in the Bank's medical,  dental,  and life insurance  coverage and
reimbursement  plans to the extent that such plans exist and as constituted from
time  to  time  until  the  Employee's  death;  provided,  however,  that if the
employment  of the Employee is  terminated by the Employee for "good reason" (as
defined in Section  11(g) hereof) or by the Bank other than for "just cause" (as
defined in Section 11(a) hereof) prior to the  attainment of age 70, he shall be
entitled  to  participate  in such plans until age 70, to the same extent as set
forth in Section 11(l) hereof

     Section  8.  Disability.  (a) If the  Employee  shall  become  disabled  or
incapacitated to the extent that the Employee is unable to perform the duties of
President and Chief  Executive  Officer,  the Employee shall continue to receive

                                       2
<page>

the following  percentages of compensation,  exclusive of any benefits which may
be in  effect  for Bank  employees  under  this  Agreement's  Section  7 for the
following  periods of the Employee's  disability:  100 percent for the first six
(6) months, and 60 percent thereafter for this Agreement's  remaining term. Upon
returning  to  active  service  on  a  full-time   basis,  the  Employee's  full
compensation  shall be reinstated on a "go forward"  basis.  Should the Employee
return to active employment on other than a full-time basis, then the Employee's
compensation  for the remainder of the then existing term of employment,  as set
forth in Section  5,  shall be  reduced  on such  terms as the  Bank's  Board of
Directors shall determine.

     (b) There shall be deducted  from the amounts  paid to the  Employee  under
this Section  during any period of disability  any amounts  actually paid to the
Employee pursuant to any disability  insurance,  workers'  compensation or other
similar  program that the Bank has  instituted or may institute on behalf of its
employees  for the  purpose  of  compensating  the  Employee  for a  disability,
including  those  payable  under  disability  insurance  policies  covering  the
Employee issued by Commercial Union Insurance Company or any successor issuer(s)
or  policies,  but the Bank shall  continue  the  program of  reimbursement  and
payment of premiums as previously conducted.

     (c) For purposes of this Agreement,  and except to the extent prohibited by
Code Section 409A, the Employee shall be deemed disabled or incapacitated if the
Employee,  due to physical or mental illness, shall have been absent from duties
with the Bank on a full-time  basis for thirty (30) days provided,  that, if the
Employee shall not agree with a determination  to terminate the Employee because
of disability or  incapacity,  the question of the  Employee's  ability shall be
submitted to an impartial  and reputable  physician  selected by the parties and
such physician's determination regarding disability or incapacity shall be final
and binding.

     Section 9. Stock Options.  During this Agreement's  term, the Employee will
be entitled to  participate  in and  receive the  benefits of any stock  option,
profit sharing, or other plans,  benefits, and privileges given to employees and
executives of the Bank or its  subsidiaries  and  affiliates  that may come into
existence  to the  extent  commensurate  with the  Employee's  then  duties  and
responsibilities,  as fixed by the Bank's Board of Directors or any Committee of
the Board or of the Bank  selected  for this  purpose;  and,  to the  extent the
Employee is otherwise  eligible and qualifies,  to so participate in and receive
these  benefits  or  privileges.  The Bank  shall not make any  changes in these
plans,  benefits or privileges that would adversely affect the Employee's rights
or benefits  unless the change  occurs  pursuant to a program  applicable to all
Bank executive officers and does not result in a proportionately greater adverse
change in the rights of or benefits to the  Employee as compared  with any other
Bank  executive  officer.  Nothing  paid  to the  Employee  under  any  plan  or
arrangement  presently in effect or made available in the future shall be deemed
to be in lieu of the salary payable to the Employee pursuant to Section 5.

     Section 10.  Expenses.  The Bank shall  reimburse the Employee or otherwise
provide  for or pay for all  reasonable  expenses  incurred  by the  Employee in
furtherance of, or in connection with, the Bank's business,  including,  but not
by way of  limitation,  automobile  and  traveling  expenses and all  reasonable
entertainment  expenses  whether  incurred at the  Employee's  residence,  while
traveling, or otherwise, subject to reasonable limitations as may be established
by the Bank's Board of Directors,  provided these expenses are deductible by the
Bank for federal  income  taxation  purposes.  If these expenses are paid in the
first instance by the Employee, the Bank will reimburse the Employee.

                                       3
<Page>

     Section  11.  Termination.  (a) (1)  The  Bank's  Board  of  Directors  may
terminate the  Employee's  employment at any time,  but any  termination  by the
Bank's  Board of  Directors  other than  termination  for just cause,  shall not
prejudice the  Employee's  right to  compensation  or other  benefits  under the
Agreement.  The Employee  shall have no right to receive  compensation  or other
benefits for any period after  termination for just cause.  Termination for just
cause shall include termination  because of the Employee's personal  dishonesty,
incompetence,  willful  misconduct,  breach of fiduciary duty involving personal
profit,  intentional failure to perform stated duties,  willful violation of any
law, rule, or regulation (other than traffic  violations or similar offenses) or
final  cease-and-desist  order,  or  material  breach of any  provision  of this
Agreement.

     (2) If  the  Employee  is  suspended  and/or  temporarily  prohibited  from
participating  in the  conduct of the Bank's  affairs by a notice  served  under
section  8(e)(3)  or (g)(1) of the  Federal  Deposit  Insurance  Act (12  U.S.C.
1818(e)(3)  and (g)(1)) the Bank's  obligations  under this  Agreement  shall be
suspended as of the date of service unless stayed by appropriate proceedings. If
the charges in the notice are dismissed,  the Bank may in its discretion (i) pay
the  Employee  all or part  of the  compensation  withheld  while  its  contract
obligations  were  suspended and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.

     (3)  If  the  Employee  is  removed  and/or  permanently   prohibited  from
participating  in the  conduct of the Bank's  affairs by an order  issued  under
section  8(e)(4)  or (g)(1) of the  Federal  Deposit  Insurance  Act (12  U.S.C.
1818(e)(4) or (g)(1)),  all  obligations of the Bank under this Agreement  shall
terminate  as of the  effective  date of the  order,  but  vested  rights of the
contracting parties shall not be affected.

     (4) If the Bank is in default (as defined in section 3(x)(l) of the Federal
Deposit  Insurance Act), all obligations under this Agreement shall terminate as
of the date of default,  but this  paragraph  (b)(4) shall not affect any vested
rights of the contracting parties.

     (5) All obligations under this Agreement shall be terminated, except to the
extent  determined  that  continuation  of this  Agreement is necessary  for the
continued operation of the Bank:

          (i) by the  Director or his or her  designee,  at the time the Federal
     Deposit  Insurance   Corporation   enters  into  an  agreement  to  provide
     assistance  to or on behalf of the Bank under the  authority  contained  in
     section 13(c) of the Federal Deposit Insurance Act; or

          (ii) by the Director or his or her designee,  at the time the Director
     or his or her designee  approves a supervisory  merger to resolve  problems
     related  to  operation  of the Bank or when the Bank is  determined  by the
     Director to be in an unsafe or unsound condition.

Any rights of the parties hereto that have already vested, however, shall not be
affected by such action.

     (b) In the event  employment  is  terminated  for just  cause  pursuant  to
Section  11(a),  the  Employee  shall  have no  right to  compensation  or other
benefits  for  any  period  after  the  termination  date.  If the  Employee  is
terminated  by the Bank other than for just cause  pursuant to Section 11(a) the
Employee's  right to  compensation  and other  benefits shall be as set forth in
Section 11(k).  If employment is terminated  for just cause,  the Employee shall
have the right, at the Employee's  sole option,  to appear at the next scheduled
regular or special meeting of the Bank's Board of Directors at which a quorum of

                                       4
<Page>
the Board is present so that the Board may hear  argument  from the  Employee or
counsel or both and reconsider  the  termination.  The Board of Directors  shall
deliver to the Employee its reconsidered  determination in writing within twenty
(20) days after the meeting.  This  procedure  shall not prejudice the rights of
either party under Section 20.

     (c) The  Employee  shall  have the  right,  upon  prior  written  Notice of
Termination of not less than thirty (30) days and that  otherwise  satisfies the
requirements of Section 11(h), to terminate  employment,  but in this event, the
Employee shall have no right after the termination date to compensation or other
benefits as  provided  in this  Agreement,  unless the  termination  is for good
reason, as defined, pursuant to Section 11(g).

     (d) All obligations under this Agreement may be terminated: (i) by the FDIC
or successor or other  regulatory  agency at the time such agency enters into an
agreement to provide assistance to or on behalf of the Bank; and (ii) by the OTS
or successor or other regulatory  agency at the time that such agency approves a
supervisory  merger to resolve problems related to the Bank's operations or when
the Bank is  determined by the OTS or other agency to be in an unsafe or unsound
condition,  but the  Employee's  rights to  compensation  earned as of that date
shall not be affected.

     (e) If the Bank is in default,  as defined to mean an adjudication or other
official  determination  by a court of  competent  jurisdiction  or other public
authority pursuant to which a conservator, receiver, or other legal custodian is
appointed for the Bank for  liquidation  purposes,  all  obligations  under this
Agreement shall terminate as of the date of default,  but the Employee's  rights
to compensation earned as of the termination date shall not be affected.

     (f) In the event that the Employee is  terminated in a manner that violates
the provisions of Section 11(a), as determined by arbitration in accordance with
Section 20, the Employee shall be entitled to  reimbursement  for all reasonable
costs,   including  attorney's  fees,  in  challenging  the  termination.   This
reimbursement  shall be in  addition  to all  rights  to which the  Employee  is
otherwise entitled under this Agreement. Notwithstanding the above, the Employee
shall  be  entitled  to  indemnification  from  the  Bank  consistent  with  the
indemnification   permitted  by  the  OTS  Rules  and  Regulations  for  Federal
Associations,  codified  at 12  C.F.R.  Sec.  545.121,  and to the  full  extent
contemplated  by the Bank's  Bylaws.  In addition,  if the Employee  serves as a
director,  officer, or employee of any affiliate of the Bank, the Employee shall
be entitled to indemnification and exculpation from liability to the full extent
permitted  by  applicable  law,  and the  Bank  agrees  to cause  all  necessary
provisions to be included in, or changes made to, the Articles of  Incorporation
or Bylaws of these affiliates required to accomplish this.

     (g) The Employee may terminate  employment for good reason. For purposes of
this  Agreement,  "good reason" shall mean:  (1) a failure by the Bank to comply
with any material provision of this Agreement,  which failure has not been cured
within  ten (10) days  after a notice  of  noncompliance  has been  given by the
Employee  to the  Bank;  or (2)  any  purported  termination  of the  Employee's
employment which is not effected pursuant to a Notice of Termination  satisfying
the requirements of Section 11(h).

     (h) Any  termination  of the  Employee's  employment  by the Bank or by the
Employee  shall be  communicated  by written  Notice of Termination to the other

                                       5
<Page>
party only after any applicable grace period's  expiration that may be set forth
in this  Agreement.  For purposes of this  Agreement,  a "Notice of Termination"
shall mean a dated  notice which  shall:  (1) indicate the specific  termination
provision in the Agreement  relied upon; (2) set forth in reasonable  detail the
facts and circumstances claimed to provide a basis for the Employee's employment
termination  under the  provision so indicated;  (3) specify a termination  date
which  shall be not less than  fifteen  (15) days nor more than thirty (30) days
after a Notice  of  Termination  is  given,  except  in the  case of the  Bank's
termination  of the  Employee's  employment  for just cause  pursuant to Section
11(a),  for which the Notice of Termination must specify that the termination is
effective immediately; and (4) be given in the manner specified in Section 14.

     (i) (1) If the Employee shall terminate employment for good reason pursuant
to 11(g) or if the Bank terminates the Employee other than for just cause,  then
in lieu of any further salary payments to the Employee for periods subsequent to
the termination  date, the Bank shall pay as severance to the Employee an amount
equal to: three (3) times the Employee's average annual  compensation  (computed
on the basis of the most recent five (5) taxable years) paid to the Employee and
includable in the Employee's gross income for federal income tax purposes on the
date on which the termination  occurs,  this payment to be made in a lump sum on
or before the thirtieth (30) day following the termination date. However, in the
event the  Employee is  considered  a Specified  Employee as provided in Section
11(n),  this lump sum payment  will be made no earlier than the first day of the
seventh month  following the effective  date of the Employee's  Separation  from
Service, as defined in Section 11(m).

     (2) Notwithstanding any other provision of this Agreement,  in the event of
a Change in Control as  provided  in  Section  11(j),  the Bank shall pay to the
Employee  an amount  equal to:  three (3) times the  Employee's  average  annual
compensation  (computed on the basis of the most recent five (5) taxable  years)
paid to the Employee and includable in the  Employee's  gross income for federal
income tax purposes, with such payment to be made in a lump sum on the effective
date of the Change in Control.

     (3) If for any  reason  the  basis for  termination  of this  Agreement  or
payment  of amounts  under this  Section  is  disputed  by either  party to this
Agreement or any other person or agency, then pending resolution of any dispute,
within  three (3)  months  after  the due date of the  payment,  the Bank  shall
deliver the entire  amount  calculated  in  accordance  with this  Section to an
independent  trustee  to hold in an  interest  bearing  account in trust for the
benefit of the Employee and the Bank,  whichever may be  ultimately  entitled to
the same.  The  trustee  shall be a bank or savings  institution  other than the
Bank,  with deposits of at least  $250,000,000,  unrelated to any parties in the
dispute,  and disinterested in any transaction arising out of or engendering the
dispute.  If the  parties  are unable to agree upon a trustee  within  this time
period,  then either party may seek  immediate  relief from a court of competent
jurisdiction  without the  necessity  of first  resorting to  arbitration  under
Section  20. In  addition,  the Bank  agrees  that the  Employee  would  have no
adequate remedy at law for breach of these  obligations,  and the Employee shall
be entitled to immediate  injunctive and other  appropriate  equitable relief to
enforce the same without the necessity of first  resorting to arbitration  under
Section 20.

     (4) Any  payments  made to the  Employee  pursuant  to  this  Agreement  or
otherwise, are subject to and conditioned upon compliance with 12 U.S.C. Section

                                       6
<Page>
1828(k) and any regulations promulgated thereunder.  Notwithstanding anything to
the contrary herein,  the Employee shall only be entitled to a payment under the
first  to  occur  of  (i)(1)  or  (i)(2)  above.  Payments  under  one of  these
alternatives shall preclude any payments under the other.

     (j) For purposes of this  Agreement,  a Change in Control of the Company or
the Bank shall mean (i) a change in  ownership  of the Company or the Bank under
paragraph (1) below, or (ii) a change in effective control of the Company or the
Bank  under  paragraph  (2)  below,  or (iii) a  change  in the  ownership  of a
substantial portion of the assets of the Company or the Bank under paragraph (3)
below:

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

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

     (3) Change in the  ownership of a  substantial  portion of the Company's or
the Bank's  assets.  A change in the ownership of a  substantial  portion of the
Company or the Bank's  assets  shall occur on the date that any one  person,  or
more  than one  person  acting  as a group  (as  defined  in  Proposed  Treasury
Regulation Section  1.409A-3(g)(5)(v)(B)  or subsequent guidance),  acquires (or
has acquired  during the 12-month  period  ending on the date of the most recent
acquisition by such person or persons) assets from the  corporation  that have a
total  gross  fair  market  value  equal to or more than 40 percent of the total
gross fair market value of (i) all of the assets of the Company or the Bank,  or
(ii) the value of the assets being  disposed of,  either of which is  determined
without regard to any liabilities associated with such assets.

     (4) For all purposes  hereunder,  the definition of Change in Control shall
be  construed  to be  consistent  with the  requirements  of  Proposed  Treasury
Regulation Section 1.409A-3(g) or subsequent guidance, except to the extent that
such proposed regulations are superseded by subsequent guidance.

     (k) The  Employee  shall not be  required  to  mitigate  the  amount of any
payment  provided  for in  Section  11(i)(1)  by  seeking  other  employment  or

                                       7
<page>
otherwise.  No other employment or compensation  from other sources or employers
shall affect or reduce the amounts or  obligations  of the Bank to make payments
or provide the benefits or arrangements to the Employee under this Agreement.

     (l)  Notwithstanding  any  provision  in this  Agreement,  in the  event of
termination by the Employee for "good reason" or by the Bank other than for just
cause,  or in the  event of a change  in  control,  all then  existing  medical,
dental,  life insurance,  and other  applicable  benefit plans shall continue in
force for the  Employee's  benefit at the Bank's sole cost and expense until the
employee attains the age of 70 years,  provided,  however,  that if the Employee
shall  subsequently  receive  equivalent  medical or dental  coverage from a new
employer,  the Bank shall no longer be  obligated  to continue  to provide  such
coverage.

     (m)  "Separation  from Service"  shall mean,  consistent  with Code Section
409A(2)(a)(i),  the Employee's death, retirement,  or termination of employment.
No Separation from Service shall be deemed to occur due to military leave,  sick
leave or other  bona fide  leave of absence if the period of such leave does not
exceed six months or, if longer, so long as the Employee's right to reemployment
is  provided  by law or  contract.  If the  leave  exceeds  six  months  and the
Employee's right to reemployment is not provided by law or by contract, then the
Employee shall be have a Separation  from Service on the first date  immediately
following such six-month  period.  The Employee shall not be treated as having a
Separation  from  Service  if the  Employee  provides  more  than  insignificant
services for the Company and Bank following the  Employee's  actual or purported
termination of employment  with the Company and Bank.  Services shall be treated
as not being insignificant if such services are performed at an annual rate that
is at least equal to 20 percent of the services rendered by the Employee for the
Company  and Bank,  on  average,  during the  immediately  preceding  three full
calendar years of employment (or if employed less than three years, such shorter
period of employment) and the annual base  compensation  for such services is at
least equal to 20 percent of the average  base  compensation  earned  during the
final three full calendar  years of  employment  (or if employed less than three
years,  such shorter  period of  employment).  Where the  Employee  continues to
provide services to a previous employer in a capacity other than as an employee,
a Separation from Service will not be deemed to have occurred if the Employee is
providing  services at an annual rate that is 50 percent or more of the services
rendered,  on average,  during the immediate preceding three full calendar years
of employment (or if employed less than three years, such lesser period) and the
annual base  compensation  for such services is 50 percent or more of the annual
base  compensation  earned  during  the  final  three  full  calendar  years  of
employment (or if less, such lesser period).

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

     Section 12. Other Benefits.  Notwithstanding  anything to the contrary, the
payment or obligation to pay any monies, or granting of any rights or privileges
to the Employee as provided in this Agreement shall not be in lieu or derogation
of the rights and privileges that the Employee now has under any plan or benefit
presently outstanding.

                                       8
<page>
     Section 13. Agreement Changes. This Agreement may not be modified, changed,
amended,  or  altered  except  in  writing,  signed  by the  Employee  or by the
Employee's duly authorized representative, and by a duly authorized Bank officer
or Chairman of the Bank's Board of Directors.

     Section 14. Notices.  All notices given or required to be given shall be in
writing,  sent by United States first-class certified or registered mail, return
receipt requested  postage prepaid,  to the Employee or to the Employee's spouse
or estate upon the Employee's death at the Employee's last-known address, and to
the Bank at its principal office.  All notices shall be effective when deposited
in the mail in the manner specified in this Section. Either party by a notice in
writing may change or designate the place for receipt of all notices.

     Section 15. Waiver of Rights. No course of conduct between the Bank and the
Employee  and no delay or omission of the Bank or the  Employee to exercise  any
right or power  given  under this  Agreement  shall:  (i) impair the  subsequent
exercise  of any  right or  power;  or (ii) be  construed  to be a waiver of any
default or any acquiescence in or consent to the curing of any default while any
other  default  shall  continue to exist,  or be  construed  to be a waiver of a
continuing  default or of any other right or power that shall have  arisen;  and
every power and remedy  granted by law and by this Agreement to any party may be
exercised from time to time, and as often as may be deemed expedient. All of the
rights and powers shall be cumulative to the fullest extent permitted by law.

     Section 16. Prior Agreements.  This Agreement  supersedes any and all prior
Employment  Agreements  written or verbal,  between the parties all of which are
canceled.

     Section 17. Successors. This Agreement shall inure to the benefit of and be
binding upon the Employee, and, to the extent applicable,  the Employee's heirs,
assigns,  executors,  and  personal  representatives,  and  upon the  Bank,  its
successors, and assigns, including, without limitation, any person, partnership,
or corporation  that may acquire all or  substantially  all of the Bank's assets
and business,  or with or into which the Bank may be consolidated or merged, and
this provision shall apply in the event of any subsequent merger, consolidation,
or  transfer  unless  a  merger  or  consolidation   or  subsequent   merger  or
consolidation  is a  transaction  of the type that would  result in  termination
under sections 11(e) and 11(f).

     Section 18.  Assignment.  This Agreement is personal to each of the parties
and neither party may assign or delegate any of its rights or obligations  under
this Agreement without the prior written consent of the other party.

     Section  19.  Applicable  Law.  This  Agreement  shall be  governed  in all
respects  and be  interpreted  by and  under  the laws of the State of New York,
except to the extent that the law may be  preempted by  applicable  federal law,
including  regulations,  opinions,  or orders  duly issued by the OTS or FDIC or
successor  or other  regulatory  agency  ("Federal  Law"),  in which  event this
Agreement shall be governed and be interpreted by and under Federal Law.

     Section 20.  Arbitration.  Except as otherwise expressly provided elsewhere
in this  Agreement,  in the event that any  dispute  should  arise  between  the
parties as to the meaning, effect,  performance,  enforcement, or other issue in
connection with this Agreement, which dispute cannot be resolved by the parties,
except the question of Employee's  disability  under  Section 8(c),  the dispute

                                       9
<Page>

shall  be  decided  by  final  and  binding  arbitration  of a  panel  of  three
arbitrators  who  shall be  present  or former  executives  of  Federal  savings
institutions  located in the United States.  Proceedings in arbitration  and its
conduct shall be governed by the rules of the American  Arbitration  Association
("AAA")  applicable to commercial  arbitrations (the "Rules") except as modified
by this  Section.  The Employee  shall  appoint one  arbitrator,  the Bank shall
appoint one arbitrator,  and the third shall be appointed by the two arbitrators
appointed  by the parties.  The third  arbitrator  shall be impartial  and shall
serve as chairman of the panel.  The parties  shall  appoint  their  arbitrators
within  thirty  (30) days after the demand for  arbitration  is served,  failing
which the AAA promptly shall appoint a defaulting  party's  arbitrator,  and the
two arbitrators shall select the third arbitrator within fifteen (15) days after
their appointment,  or if they cannot agree or fail to so appoint,  then the AAA
promptly shall appoint the third arbitrator.  The arbitrators shall render their
decision in writing within thirty (30) days after the close of evidence or other
termination of the  proceedings by the panel,  and the decision of a majority of
the  arbitrators  shall be final and binding  upon the  parties,  nonappealable,
except in  accordance  with the Rules and  enforceable  in  accordance  with the
Uniform  Arbitration  Act in  force in the  State of New York or any  applicable
successor legislation. Any hearings in the arbitration shall be held in the City
of White Plains, New York unless the parties shall agree upon a different venue,
and shall be private and not open to the public.  Each party shall bear the fees
and  expenses  of its  arbitrator,  counsel,  and  witnesses,  and the  fees and
expenses of the third  arbitrator  shall be shared  equally by the parties.  The
costs of the arbitration,  including the fees of AAA, shall be borne as directed
in the decision of the panel.

     Section 21. Separability. If for any reason, any section or portion of this
Agreement shall be held by a court to be invalid or unenforceable,  it is agreed
that this shall not affect any other section or portion of this Agreement.

     Section 22.  Source of Payments.  All payments  provided in this  Agreement
shall be timely  paid in cash or check from the general  funds of the Bank.  The
Company, however,  guarantees payment and provisions of all amounts and benefits
due  hereunder  to Employee  and, if such amounts and benefits due from the Bank
are not timely paid or provided by the Bank,  such amounts and benefits shall be
paid or provided by the Company.

                  [Remainder of Page Intentionally Left Blank]

                                       10
<PAGE>

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

ATTEST:                                      SOUND FEDERAL SAVINGS

/s/ Anthony J. Fabiano                      /s/ Bruno J. Gioffre
----------------------                      --------------------

WITNESS:                                     EMPLOYEE:

/s/ Anthony J. Fabiano                      /s/ Richard P. McStravick
----------------------                      ---------------------

                                       11

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